The epic fight over the greyhound racing ban will mar departing New South Wales Premier Mike Baird’s legacy, but one of his greatest triumphs was turning one of the most controversial issues in NSW politics for more than a decade into a nonevent. When Baird sold off another significant chunk of the NSW electricity network at the end of last year, this time to industry super funds, it drew barely a comment from either NSW Labor or the Electrical Trades Union — despite being the issue Labor tore itself apart over, and lost party leaders for, at various points since the Bob Carr era.
It’s quite a contrast from the hysterical, racist campaign Labor and the unions waged against privatisation before the 2015 election, with the CFMEU complaining about selling “our” electricity network to China and Labor telling blatant lies about the impact of privatisation on electricity prices. This was far from being an irrational resistance to privatisation: Labor and the unions were out to protect union jobs in the industry, putting the benefits to consumers of privatisation in a distant second place. The CFMEU is a major donor to NSW Labor, and so, too, is the Electrical Trades Union, which gave over $81,000 to Labor in the lead-up to the 2015 election.
But in responding to the Ausgrid sale by the Baird government, Labor leader and nonentity Luke Foley could only bring himself to complain that the government could have got a better deal if it had waited longer and shopped the assets around more. At least that time Foley offered a coherent response; his response to Baird’s previous sale, of Transgrid (to foreign investors), was to tenuously link it to the WestConnex project so disliked by some of Sydney’s inner-city types. More interesting was the response from the ETU, which declared “as private owners go — we could do worse than an Australian Super fund.”
The non-reaction illustrates that governments looking to sell assets are often taking on two political problems, not just one: selling assets is disliked by the electorate, and foreign ownership is also regarded with hostility. The Keating and Howard government dealt with this by putting in place foreign ownership limits of one kind or another for Qantas, the CBA and Telstra. Scott Morrison’s ham-fisted intervention in the Ausgrid sale to block Asian investors accomplished something similar.
But that it wasn’t just Australian super funds but industry super funds that ended up purchasing the half-stake in Augrid appears to have also been important. Neither foreign nor, strictly, private sector, industry super funds are ostensibly a more benign entity to take control of a piece of infrastructure and its employees. It’s an illusion, of course; super funds of any stripe will seek managers who will run assets as efficiently and cheaply as possible and extract maximum revenue, just like a private corporation. And most super funds — industry, retail and corporate — invest in privatised entities like Telstra, Qantas and the Commonwealth Bank. Most Australian workers, therefore, have a long-term stake in privatised companies, but don’t necessarily associate themselves with the “shareholders” that they perceive as benefiting from the misdeeds of such companies.
The ideal way forward would be for politicians and business leaders to explain to voters the benefits of foreign investment and of properly regulated privatisation (where governments don’t structure the sale to minimise competition for the asset and thus maximise their return). But with no one either willing or, it seems, capable of doing that, super funds seem to offer an effective political cheat code for politicians dealing with truculent, privatisation-averse electorates.