Poor old Morris. He can’t take a trick. After cunningly switching the introduction of the electricity privatisation bills to the Upper House (to avoid the chance of a symbolic defeat in the House that actually determines government and presumably to unleash the persuasive charm of Michael Costa), now he’s finding to his surprise that his troops in the Liberal Party won’t do his bidding. Wtf? But it’s the logic of NSW state politics at the moment. Confused columnists at The Australian are also decrying the Liberals for doing something which is a political no brainer – going with public opinion rather than propping up Iemma. The “business community” might be unhappy, but on that see this post from Andrew Elder, who I think reads the politics somewhat better than Tim Dunlop does. Dunlop seems to have partially swallowed the “test of O’Farrell’s mettle” theme. I think it’s perfectly sensible, and indeed appropriate, for an opposition to oppose highly unpopular legislation which is misconceived anyway.
Update: A new post on Iemma’s latest move – dispensing with parliamentary democracy altogether.
Seeing that Iemma is drowning O’Farrell has done the only thing he could do. Thrown Morris an anvil. FFS, Iemma or Costa would do the same if the positions were reversed.
Speaking of News Ltd hacks, just yesterday Imre was telling the good people of Sydney via Adam Spencer that O’Farrell would lead the Libs to vote yes.
How do you get one of those jobs were you are paid to be utterly and regularly wrong?
So how do you think this will stand with the highly unpopular view when O’Farrell takes electricity privatisation to the next election, which he has stated is his intention?
So, Kim – if an election results which way would you vote? Iemma or O’Farrell?
Pity also the often-forgotten junior Coalition partner, taken for granted in the supposedly “pro-big business constituency” opposition. Nationals support a monopoly! News at 11.
I think this is a bit more complex than you are acknowledging, particularly since the Labor government can now blame the Liberals for every funding shortfall, every infrastructure problem etc etc, because they’d have the money to fix all these things if the Libs had voted yes. Don’t know how much of it will stick, but it’s a line.
Also it leaves the Libs looking like the directionless fools that they are, a party that stands for nothing other than political expediency.
That’s Costa’s line, adrian, yes.
Andrew, remember that in NSW there’s optional preferential voting.
I was about to say, Andrew, that I’d take opportunity of optional preferential and decline to choose between O’Farrell and Iemma.
On the other hand electricity privatisation is Liberal party policy. Even though they should win the next election, there’s still no guarantee that they’d be able to do this in office, as Labor will oppose and the cross benches in the Upper House will still be against them. So if the Libs think that privatisation is good policy, then they have now missed what may be a once in a generation chance to see it implemented.
Liam,
The agrarian socialist party has been supporting monopolies, tariffs, subsidies and embargos since day one. The only “News at 11″ moment in there is that you seem surprised.
Optional preferential voting, if you do not preference either of the majors, is just your way of voting for whoever was going to win the seat anyway. No real choice there.
When it comes to critical public service monopolies being controlled by the government rather than private sector monopolies it is a no brainer….
…. make Morris do the job or get out there and sell hats.
Andrew, I must remember to be clearer about my banal sarcasm in future. I’m saying that nobody should be surprised at O’Farrell’s decision considering the proclivities of the bumpkins in his Party room. They’re better socialists than most of the trade union movement.
And on your second paragraph, look to Balmain and Marrickville for interesting results, not to mention all of the LA Independents.
Andrew, I must remember to be clearer about my banal sarcasm in future. I’m saying that nobody should be surprised at O’Farrell’s decision considering the proclivities of the bumpkins in his Party room. They’re better socialists than most of the trade union movement.
And on your second paragraph, look to Balmain and Marrickville for interesting results, not to mention all of the LA Independents.
O’Farrell now faces a challenge winning back the CEOs in marginal seats…wait…
The main hypothetical way this could damage the opposition is if the defeat finally brings on a belated Ides of March, bringing forth a government led by anyone but Costa and his Medvedev.
But still, for a party that became obsessed with the bedroom obsessions of a few party power brokers, its heartening to see them trying to appeal to the median voter, and it only too 85% of the population having the same opinion for a party to pander to it! Remarkable!
Also, and this must be said, because it can’t fit in with the totemistic ideology battle being fought by the pages of the Australian and elsewhere (including some left leaning people), that it is perfectly reasonable for a politician to agree with the central tenet of a policy reform whilst quibbling on the details which are poorly thought out or blatant rent seeking.
By the same note, one can agree with the policy of carbon trading, but disagree with a specific policy that entails free permits to well connected polluters, and a supporter who supports the policy as a solution should oppose this until a better version is drawn up; it doesn’t mean that this plan should become a totem to divide those who agree with carbon trading from those who don’t.
Apologies Liam. I will have to increase my banal sarcasm detectors in future. As for socialists in the trade union movement I ould have thought they were almost all gone now. Looking at the unions they seem to be more interested in rent seeking for their members (or their senior officers) than the interests of any wider social class as a whole.
Its quite clear that O’Farrell is not opposed to electricity privatisation per se. He is just opposed to an ALP government doing it now. To suggest that the NSW Opposition has been listening to the voters and taking a principled stand against unpopular ALP privatisation is complete bullshit, Kim. I know you can do better than this. How will you play it if/when an O’Farrell govt. introduces a privatisation bill – as is in their policy?
Good points from everyone re: liberal expediency. Barrel wants to have his cake and eat it too. Iemma should be calling on him to nail his colours to the mast and promise that if they reject this, they won’t implement in the future.
But frankly, I don’t understand why he’s so frigging obsessed about the power sell off. If he thinks it’s going to save the party, he’s been drinking waaaaaaaay too much Kool-Aid. They’re not going to be around to spend most of it, so why bother? (also, that thing called democracy, but there you go).
Liam, Andrew is essentially right about optional preferential, and someone as well informed as you should know better. To use Balmain as an example is a little disingenuous: it would need a landslide of of optional preferentials exhausting to change the representation in that seat – and if it didn’t crack last time, there’s no reason to believe it will change significantly for the next election.
Tim Dunlop is just another white bourgeois male propagandist for the ALP. Like Mark Bahnisch.
Michael Costa and Morris Iemma walk into a restaurant one evening. The waitperson greets them, hands them a menu and, after an appropriate interval, asks what they would like for dinner.
Costa replies: “I’ll have the steak, thanks.”
Waitperson: “Very well, sir. And what about the vegetable?”
Costa glances across at Iemma, and then says to the waitperson: “Oh, he’ll have the steak as well, thanks.”
I agree with this post.
J.Bentham is talking rubbish and mustn’t have read many of the posts by those two bloggers. I’m more familiar with Tim Dunlop’s work and he often criticises Labor. However, I disagree with his take on this subject.
The vote has now been delayed until September.
The Liberals will win the next election, privatise electricity anyway and introduce their social agenda.
To paraphrase the soup nazi on Seinfeld, “No abortions for you!”.
I’m no fan of Iemma and Costa, but you’ve got to realise the full implications of their defeat on this matter.
“This is a joke,” said Mr Costa, whose departure attracted applause from the public gallery.
I reckon electricity privatisation in NSW is in principle a good policy, though I don’t expect most posters on this blog to agree. But it is a rotten time to do it given the state of financial markets, the uncertainty over ETS and the incompetence of this particular goverment in seeing anything through (whether privatisation is a Good Thing or a Bad Thing really does depend on exactly why and how it is done).
O’Farrell would have been nuts not to take this opportunity. No doubt he’ll justify it by saying “I’m in favour of privatisating it, but not now” for the very plausible reasons I just gave, but really it’s an electoral gift no polly could pass up.
Um, is anyone actually positive that electricity privatisation is a bad idea? 4 reports have recommended selling it, the opinion polls are because no one likes privatisation of anything, and punters don’t understand it. Thirdly the deal isn’t to sell generation or transmission, but retail power, which, the theory goes, increases competition etc. Prices are going up anyway (the bill caps them) and every other state in Australia does it.
Fourth, the power system needs 10 billion in investment which is a huge chunk of NSW money, fifth the evidence suggests that the private sector if given the chance to make money will invest in it, sixth carbon trading will not have a huge effect (acc to auditor-general) seventh now we have to pay for it, therefore leaving little to no money for other infrastructure projects.
So why is everyone so sure its a bad idea?
Plus the politics are shit for O’Farrell, he should have voted for it and shown some courage. That gives him way more credibility. He could conceivably lose this election.
“The vote has now been delayed until September.”
No doubt in the hope that O’Farrell can be roundly excoriated as a principles-free zone for another month prior to claiming a much-diminished “victory.”
I’m with DD on privatisation. Most of the electorate’s opposition is based on a general visceral dislike of the government, amped up by the overwrought Sydney media who continually portray the city as some sort of antipodean Mogadishu.
This is undoubtedly a tired government and would have been turfed last year had the Opposition been halfway decent. They weren’t then. They’re not now.
In theory, I have no problems with the idea. But the two issues that swayed public sentiment against privatisation are (1) the current government’s demonstrated incompetence especially in PPP and (2) the decision to make Costa the angry face of electricity privatisation.
It is too early to say what will happen during the 2011. A drover’s dog could win against NSW Labor. But do not underestimate the ability of the NSW Liberal party to find a way to hobble the dog.
Ditto Shaun, but mine was
3) the vote on the floor of ALP Conference.
Chris – the people of South Australia have excellent reasons for knowing privatisation of electricity is a bad thing. In fact, I would have thought that seeing how well the privatisation of Telstra worked would have made anyone realise it wasn’t a good idea.
The four reports that said it was a good idea were doubtless commissioned to come to that result.
The investment NSW requires should be financed by govt loans, just like in the good old days when govts took their obligations seriously.
“the decision to make Costa the angry face of electricity privatisation.”
Costa would turn a diabetic off insulin.
David: the problem with privatizing Telstra was that it was done in a braindead way; the monopoly infrastructure (the copper lines to the home, which are the hard to duplicate bit) was dumped straight into a private company.
That’s not what’s proposed here.
I strongly suspect that “J.Bentham” = John Greenfield.
Kim – shocked. Shocked, I am.
David,
Telstra is a telecommunications company so its hardly a good comparison.
I understand the idea to be that privatisation frees up the market in NSW so that it can be more efficient.
The Owen report, which started it all, is from an academic, and I’m fairly sure Iemma didn’t want to have this fight if he didn’t have to, so its unlikely that was doctored. The Auditor-General is an independent position and he recommended it as well.
Treasury thinks its a good idea.
Admittedly the Labor unions marshalled some expert opinion on their side too, but much of their opposition was and is based on the visceral dislike of any privatisation.
Also the labor Party in government doesn’t really have to follow the rules of state conference, its easier if you do, but governments have to do what they think is best for the state, not the party. The Party if it feels so inclined can disendorse Iemma and anyone else, but thats the extent of its retaliation.
The Eastern Distributor and M5 East aren’t so bad, the Lane Cove Tunnel works, the cross-city tunnel has settled down, the PPP record isn’t that bad.
Check this out from the other thread, FDB:
I wonder whether he’s ever actually gone undetected. You’d think at a certain point a normal person would ask “am I really that predictable and transparent?” and start to feel uncomfortable. At least Jinmaro could be funny, albeit only ever at someone’s expense.
The people of NSW do not deserve extra backpackers and enslaved on their doorstep, every day, fighting them to sign up for an essential service they previously owned that has been largely creamed to watered down milk by stockbrokers, bankers, politicians and various other hangers on.
Chris, Telstra is essential infrastructure, so it is a good comparison.
Robert, I don’t think the fact that the Telstra privatisation was done in a braindead way has much to do with it being a good or bad idea. The thing about Australia is that we are a large but not particularly wealthy country with a widely-dispersed population. We can’t really afford multiple phone companies, electricity grids, water reticulation systems, …
As joe2 implies, it’s all about enriching the spivs at Mac Bank.
Because Telstra was such a fantastic company before privatisaion.
And it’s such a fabulous company now?
The correct comparison shouldn’t be between ossified bureaucratic structures of the 80s and privatised companies now. It might be better to have a look at Australia Post, say, a government owned corporation that does a highly efficient and good job. The only way to produce a well run company is not to privatise it!
David: I disagree on several counts.
We are one of the richest countries on Earth; on per-capita GDP we beat Germany, Japan, France and the United Kingdom. Go and have a look at this list. The places that beat us by significant amounts are either micro-states (Luxembourg), oil states (Qatar), or the United States; even the US’s win is dubious given their even more unevenly distributed income scales than ours.
Distributed population? Most of it is located in the capital cities. The hard infrastructure to build is the “last mile” – the wires that go to your house, not the intercity links.
There might be good reasons not to have sold Telstra, but the ones you raise don’t stand up in my view.
In any case, nobody builds multiple wires to the household, with the exception of the USA (and that’s only because of cable TV). That’s the monopoly bit, and that’s the bit that should probably never have been sold, or if it was, it should have been made separate from Telstra.
When debating electricity privatisation, remember that there are (at least) three seperate elements in the industry that can be privatised, and not all need be.
Generation, with power plants.
Transmission, with power lines
and retail, selling it.
And of course the power lines are the only real natural monopoly here (and they’re not being sold in this plan).
There are plenty of other issues at stake in determining whether any given plan is good policy (and also a plan has more legitimacy when taken to an election of course), but in the interests of debate, we really have to specify which elements of the industry we believe privatisation is good and not good for, especially when making interstate and intercompany comparisons for instance.
Afterall, who would really care if the retail company Telstra was privatised. Shitty service means I can move elsewhere in most aspects, but the wholesale company that was privatised as well, with a natural monopoly on the copper wires. Textbook example of poor privatisation (and I mean that it was a literal textbook example at uni).
Indeed, David@36 What happens if these infrastructure controllers like B and B, Mac Bank go even further down the drain? I would prefer the government to look after essential services like power and water just as the very basics.
Guaranteed communication and public transport would not be bad as well. People who grant themselves 10 million a year in pay may not have the community interest in mind, people.
Chris Says:
The outcome of the Owen report was determined by its terms of reference. The TOR essentially asked the question “How can we get a new power station without paying for it”, and the predictable answer was that you can’t.
It then went on to add that the govt could sell off the existing power stations, in the hope that somebody else would build a power station without the govt having to pay for it.
This line of reasoning is not terribly sound, and it ignores the fact that someone has to pay for it, and it ultimately comes down to a choice between NSW taxpayers and NSW electricity consumers. Since these are by and large the same people, and they’ve observed that prices are higher in the other states where privatisation has occurred, they’ve sensibly come to the conclusion that the whole thing is a scam.
“This line of reasoning is not terribly sound, and it ignores the fact that someone has to pay for it, and it ultimately comes down to a choice between NSW taxpayers and NSW electricity consumers. Since these are by and large the same people, and they’ve observed that prices are higher in the other states where privatisation has occurred, they’ve sensibly come to the conclusion that the whole thing is a scam”
Except that
1) There is still no guarantee that a new power station will be built and 2) The ‘consumers’ will not only have to pay for the cost of building a new station but also for the profits for the private company to even consider doing so. and 3) selling it off is likely to mean an increase prices for exisiting generation capacity because they now have to make a profit on top of their costs to satisfy their shareholders.
Is it any wonder there is a large amount of scepticism about electricity privatisation.
Fishy government paranoia, about going into debt, mixed with circuling sharks not wanting to miss out on their kill is the source of much of this Polly.
It might be better to have a look at Australia Post, say, a government owned corporation that does a highly efficient and good job. The only way to produce a well run company is not to privatise it!
Aus Post does a good job? Not really. Queues can be awful, and they are almost never able to deliver my New Yorker in a decent time frame.
Telstra makes an interesting object study in privatisation in a number of ways. Worth noting is this: those areas where Telstra does face strong and persistent competition – eg, mobile phones – are those areas in which government never really had any control over; the proliferation of mobile phone services in Australia came after the privatisation of Telstra.
“Thirdly the deal isn’t to sell generation or transmission, but retail power, which, the theory goes, increases competition etc.”
In Vic we’ve got generation and retail. In fairness, Stockdale did allow for a lot of competition checks and balances to avoid exploitation by the white shoe brigade, as seemed to occur in Thatcher’s Britain. But it’s still a mess for the average punter. How are we advantaged by being pestered by door-to-door salesmen trying to get us to switch retailers? Offers to save us another 2.5% are pretty meaningless when you have to sign on for two years. What sort of product or service needs door-to-door salesmen anyway? In the old days it was usually something nobody wanted like encyclopedias or insurance, and the methods had to be as dodgy as they are currently.
I try to keep an open mind on privatisation. In Western Vic a private company, West Coast Rail, kept our rail service going on a shoestring with ancient rolling stock. It would have been gutted if left to Kennett or the Public Transport bureaucrats. It is now back in State hands, and run a lot better than the earlier V-Line, but not quite as good as West Coast. On that experience I’m not opposed to privatisation, but … some utilities seem to get greater advantage from economies of scale, and these are probably better in state hands provided there’s a clear level of accountability.
Iemma shouldn’t be leading the party, he doesn’t have the personality. He should be that guy that sits on the platform above the tank of water. Y’know? When you throw balls at the red dot and if you hit it the platform gives and the schmuck goes in the drink?
.
Oh you mean the Labor Party. I see. I thought you were talking about a party party. Well that’s entirely different.
.
In that case we must ensure that there are plenty of sharks in that pool of water and bucketloads of balls all ’round.
At least people now increasingly have the choice of not dealing with Telstra. If it was government run they’d probably still be sitting on ADSL technology milking the better profits from ISDN.
What about the innovation we haven’t had? One simple example – why is it that we still need to register for redirection of mail these days? Why can’t I just have an address thats fixed for the rest of my life and I just tell Australia post when I move – surely pretty much all mail can be sorted electronically these days?
Polly’s comments on electricity privatisation are pretty much my own views. And the best news I heard all day was that Costa was threatening to resign. Other NSW people seem to feel the same way, see here. It is difficult to imagine how unpopular Costa is unless you live here, and it’s mainly due to his faults of character. People aren’t terribly happy with Morris Dilemma, but they hate Costa. Though they may start to hate Dilemma if he persists with his new plan.
“It is difficult to imagine how unpopular Costa is unless you live here, and it’s mainly due to his faults of character.”
We all understand Chookie.
Promise.
Uncle festa is a good guy, even when he sticks the light bulb in his mouth and Costa isn’t.
http://maggieg.files.wordpress.com/2007/10/f_charge.jpg
Chris, I think far too much is made of the supposed initiative to innovation from the market. Particularly with most privatised entities operating in markets which are high cost entry ones.
TimT Says:
Chris Says:
What planet are you two idiots from?
Here on planet earth, I have to queue up at the bank, at the supermarket, etc., and the banks won’t let me transfer automatic account deductions between them.
I’m guessing you’re from the Libertarian fantasy planet, where everything is privately owned, there are no queues, and everyone gets a pony with every transaction.
Adrien Says:
There does seem to be a few more balls around than usual. Fatty O’Barrel has apparently grown a pair of them.
Costa’s grown one as well, but for some reason he’s grown it on top of his neck.
We’ve got 2 1/2 years until the next NSW election. I guess the next step, assuming this plan to ignore Parliament and sell it off anyway falls short, is to get legislation passed requiring Parliament to consent to privatisation. This is probably the only thing that would stop O’Farrell doing it.
New post:
http://larvatusprodeo.net/2008/08/29/privatising-democracy/
“Why can’t I just have an address thats fixed for the rest of my life and I just tell Australia post when I move”
You think it would be a good idea if Australia post had a database of every person in Australia and their addresses?
Beside, that would be an insane step backwards for sorting and utility. You’re adding a wait for a lookup and result to every item before it can be sorted. A transcription error at any point will send a letter to a random destination. Staff and users could no longer simply look at a letter to know where it’s supposed to be delivered. It would increase the cost of the mail and slow down delivery for all users while providing a small benefit for a tiny number of users at any given time.
d
I think there are calls both ways here. Telecom, before its privatisation and rebranding, was known to the internet community as “Telescum” Its service was appalling and its product unreliable and expensive. both those have changed. It was sold for far too cheap a price, given that the copper went with it.
Auspost has really changed its spots, IMHO. It actually operates as a business, while having a community servie obligation. Go to another country where the mails are private, or where no-one has attempted to reengineer the business and you’ll find out about slow queues and poor service.
I think judgements about whether a business is better in public or private hands are therefore highly contextual and specific to the operation itself.
Coming back to NSW power, my take would be to ask “How much will the taxpayer receive (compared to the current dividend stream)?” and “What is your plan for the money (i.e. will the dividend stream be replaced by some NSW version of a Future Fund, will it go into productive investment or will it be blown on current expenditure and election goodies)?”
“You think it would be a good idea if Australia post had a database of every person in Australia and their addresses?”
Darryl, the Australian Electoral Commission has been running an address-based database against the electoral roll for over a decade now, because it enables database matching with other departments and agencies like Australia Post for example, for the purpose of continuously updating and maintaining the integrity of the roll:
http://www.aph.gov.au/Library/pubs/bd/2003-04/04bd136.htm
So you make sure the events are voted down as the Premier said he has no intention of revisiting it then you vote that lot back in. As long as he (the Party) sticks to his word WIN-WIN on this issue
“the Australian Electoral Commission has been running an address-based database against the electoral roll for over a decade now, because it enables database matching with other departments and agencies like Australia Post for example,”
Unless I’ve misunderstood, Australia Post’s National Address File is a mapping of addresses to Delivery Points and geo-coded locations. There isn’t any person data in it.
d
“the Australian Electoral Commission has been running an address-based database against the electoral roll for over a decade now, because it enables database matching with other departments and agencies like Australia Post for example”
“Unless I’ve misunderstood, Australia Post’s National Address File is a mapping of addresses to Delivery Points and geo-coded locations. There isn’t any person data in it.”
Possibly the kind of database matching that is meant is that if someone tries to enrol at an address that is not on the (G-)NAF, then it is flagged for investigation.
No, just for those who want this type of redirection. Hey sell it as an add-on service – no one else can as they have a legislated monopoly over items smaller than a certain size. Most mail is automatically sorted and I’d guess most is electronically labelled now so its not a big step forward. See how your mail gets routed if you put an incorrect postcode in those little squares.
Computers are really amazingly fast these days! Even if you had everyone in there 20 million entries is small fry.
But its only an example. Maybe I’m just bitter at Australia Post because the posties are too lazy to try to deliver packages around here
And they don’t open weekends for package collection!
I think there’s some truth to that especially with high cost of entry markets, and we’ve seen that problem with Telstra. Still even as government monopolies there is a strong temptation to sit on old profitable technology even if there are better solutions out there for customers because these days they’re seen by governments as profit making entities. And with no competition, there is very little incentive to try new things out.
I do remember being very surprised when getting a payment from Telstra when the person connecting the phone didn’t turn up within the 4 hour window. The time previously as Telecom the best estimate they could make was a given day, and even then there was no compensation if they didn’t turn up.