Who wins when states privatise electricity?


Engineer with Laptop Computer

The head of Australia’s retail energy lobby, and former energy advisor to Labor governments, says the public interest is better served by electricity privatisation — and evidence from SA and Victoria supports this.

In two state elections in 2015, those of Queensland and New South Wales, the privatisation of electricity networks has been front and centre in the election campaign. The outcomes differed, but in both cases state Labor parties took a very public stand against privatisation. Some have even claimed that Queensland Labor’s unexpected victory resulted from their clear commitment to ongoing public ownership of electricity networks.

Fact or fallacy, there is no doubt that public opinion was on Labor’s side on the issue, with the same polls which predicted the victory of the Coalition in NSW, also showing public disapproval of their signature electricity privatisation policy. The NSW sales will almost certainly go ahead, but thanks to the compromises the Coalition made pre-election, the regional electricity networks will remain in public hands — absent a change of heart from the National Party — for the long term.

All of this is in spite of clear evidence that the private electricity networks of Victoria and South Australia are more efficient and have contributed less to electricity price rises, than their publicly owned counterparts in NSW and Queensland. Electricity in the privatised states is just as reliable and is regulated in the same way it is in the publicly owned states, with the monopoly networks subject to five year determinations by the Australian Energy Regulator.

It seems that no matter what the evidence, the public has a strong attachment to the notion that an essential service like electricity networks should remain owned by “us”. That doesn’t mean it is right. In these poll driven times, it is to Mike Baird’s credit that he was prepared to use his personal appeal to argue for an initiative that lacked public support.

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