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Kevin MacDonald says govt should pass electricity privatisation

28 August, 2008

Our politicians would be wise to take heed of the Auditor General’s report into the privatisation of the state’s electricity assets. Source: Kevin MacDonald.

Not only does the report give the proposed sale a clean bill of health, it also calls on the parliament to act without delay to maximise the return for the people of NSW.

Business wholeheartedly supports the sale of the state’s electricity assets and the NSW Business Chamber has strongly supported. For too long NSW has failed to effectively manage its major assets. Government has either held on to assets with declining values for too long or refused to privatise assets that could be better run by the private sector. It makes little sense to hold on to assets with a declining value, whilst at the same time the State can’t afford to buy or build other high priority assets.

A fortnight ago, the Rural Communities Impact Statement found privatisation would actually increase jobs in rural areas and services would not be affected. The Owen Inquiry and the Unsworth Review both found the Government’s restructure to be in the best interests of the people of NSW. Now, with Auditor General Peter Achterstraat’s report all the hurdles have been cleared and the pathway to privatisation is clear.

These reforms are too important to NSW’s future to be opposed. Failure to reform the sector now could stifle investment in critical infrastructure and threaten NSW of adequate supply. This will hurt jobs, businesses and consumers.

Often the reason for holding on to these assets is either trade union opposition to their sale or a perceived sentimental attachment by the community to some public assets. The best example is electricity where the entire network was estimated to be worth $25 billion a decade ago – and it is estimated that the entire network is worth half that amount.

The privatisation of Government assets when done effectively can help deliver essential services to the state’s ratepayers. Funding should be put aside for a multi billion infrastructure fund – a fund that is used to invest in key infrastructure across the state such as water, roads, public transport and port upgrades. This helps move away from the old idea of selling government assets and exclusively retiring debt, to a more balanced one that is about privatising old assets so that economic infrastructure can be built”.

Without massive investment, NSW risks running out electricity in the next decade. Privatisation can help deliver that investment and that’s why the NSW Business Chamber along with other leading business groups formed the Alliance for NSW Future. Put simply, we want to bring the focus back to what matters - providing the best, most reliable and environmentally sustainable power for the most competitive price.

Members of the Alliance represent more than 1 million jobs in NSW. Reform of the sector will ensure continued investment in NSW and that’s good for consumers, business and jobs. Without reform, it’s hard to see how the State can deliver major projects such as Pacific Highway upgrade, the M4 East and F6 extensions and the rest of the metro system, while protecting the State’s budget.

And it won’t just be transport infrastructure. With the NSW budget under increasing pressure, the sale of the state’s electricity assets will allow for a much needed and overdue capital injection into our hospitals.

There is no long-term benefit from blocking the sale. Short-term politics must not be allowed to win over what’s in the best interests of NSW, its people and its future.

It’s now time to get on with the job.

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