Publication Details

Beder, S. (2011). State of NSW: Weighing the cost of the privatisation of power. The Conversation, (24 March)

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The Conversation


Successive governments in NSW, of both political persuasions, have tried to privatise electricity despite strong and consistent citizen opposition. Citizen opposition is based on the desire to maintain public control of an essential service as well as awareness that around the world privatisation has led to higher electricity prices and lower reliability of electricity supply.

Nonetheless governments have been pressured to privatise electricity by businesses and banks as well as the federal government. They have also been attracted to the lure of an influx of funds in the short-term to spend on other government priorities, such as urban infrastructure projects, even though government finances will suffer in the long-term from the loss of dividends.

In 1999 the NSW Liberal Party campaigned on a platform of electricity privatisation, promising every ratepayer $1100 worth of shares or $1000 cash if they were elected and privatisation went ahead. Despite the bribe, the Liberal Party lost (with a 7 percent swing to Labor) because electricity privatisation was so unpopular. A subsequent NSW Liberal leader, Peter Debnam, referred to any efforts to privatise electricity as ‘political suicide’.

The current NSW Labor Government seems to think that it is immune from such an electoral backlash, despite the union and ALP opposition that contributed to the downfall of Morris Iemma as Premier in 2008 when he tried to privatise the state’s electricity. That year a Sun-Herald/Taverner Research poll found that 79% of people surveyed were opposed to the government’s plans for electricity privatisation even though they were told that it would result in more spending on other infrastructure.