On electricity privatisation

Alastair Grieve writes: Re. “Hypocritical Labor punishes consumers on electricity” (yesterday). I think that Bernard Keane may have overcooked his analysis of the case for privatising electricity networks by ignoring aspects of the anti-privatisation argument that don’t suit his position. Specifically he disregards the returns to government from owning and operating what the Grattan Institute in their report regarded as a natural monopoly and considerable the benefits to taxpayers (i.e. consumers) of this through improved budget revenue. The 2012 Grattan report to which he refers estimates around $100 per year savings per customer from better regulation which would reduce excessive charges by network owners, although they do not estimate the consumer benefits of privatising the networks which presumably should include the costs to the state budget of foregoing this revenue stream. Bernard seems to be arguing the case for a natural monopoly being transferred into private hands without supplying the evidence that the overall benefits to the State would be improved by doing so. Instead of banging on about featherbedding and “strange” alliances between unions and the Greens, and berating the irrationality of voters he should be making a more coherent and sober argument for the sale of a public asset built up over generations.

Stuart Bruce writes: Bernard Keane makes an important contribution to the privatisation debate. I think his point about electricity pricing being “all to do with the inadequate regulatory structures governments have put in place, not whether distributors are government- or privately owned”, needs to be emphasised much more by other commentators if the paradigms are to be shifted. Ownership is indeed a distraction from the central concern, which should be whether we have democratic oversight of key systems in our society — in one way a kind of public ownership still. Our democratic structures (operating through government) need to be able to effectively intervene and re-regulate systems if they go bad and maybe privatisation precludes this. What Labor have probably done, for the sake of political expediency, is shamelessly over-simplify the contest in order to commandeer the feeling amongst the public that privatisation equates to losing all control over systems, where they can never be recovered democratically should they need to be. Indeed, the questions of power and politics around whether ownership of former-public asset inevitably leads to losing democratic control (as power accumulates for the private owner(s)/investors and politicians are pressured to remove regulations), is still an open question and requires greater scrutiny before selling off the little that remains of our publicly-owned assets. I therefore side against privatisation.

The need for mercy

Anne Findlay writes: “Rundle: what we can do now to save Chan and Sukumaran” (yesterday). Thank you for a clear and very persuasive piece. Appealing for clemency government to government has not and (I fear) will not work as the atmosphere has become so toxic. An appeal of the kind — people to people — you describe perhaps could work. And at this stage, we should try everything and keep the government out of it.

Peter Fray

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