12.5 C
Byron Shire
May 15, 2021

Economist slams electricity privatisation’s ‘record of failure’

Latest News

Bluesfest announces October dates for 2021 festival

After two disappointing cancelations of their event, Bluesfest has announced that they will hold the 2021 festival over the...

Other News

Lismore City Council declares housing emergency, wants more units

A Lismore City Council housing survey had shown more than 60 per cent of residents were living by themselves or with one other person, Cr Ekins said, prompting ‘a real need for smaller housing or units’.

Filming of Byron Baes begins with no indigenous consultation

Filming of the Netflix series Byron Baes has reportedly commenced without any effort made by the show's production company – Eureka Productions – to consult with local indigenous groups or the local Council.

Eating vegan is no longer like Mac Vs PC

Remember back in the bad old days when you used either a PC or Mac? Those were your choices, and never the twain could meet. They were so many miles apart in operations that they were like different countries with different languages and appearances

Free mental health workshop for Byron businesses

Business owners in Byron Shire are invited to attend a free 'Healthy Mindset' workshop aimed at providing them with resources and tools to improve mental health and wellbeing, as well as the opportunity to connect with other business owners.

A grubby business

Cr Cate Coorey, Byron Shire Council Among the reasons Simon Richardson gave for his retirement from the mayoralty was the...

Byron Comedy Festival launched with a laugh

At a hilarious sold-out launch of the Byron Comedy Festival, Dr Karl Kruszelnicki had the entire Byron Bay Surf Club giggling last night

ElectricityPrivitisationInAusProminent Australian economist Professor John Quiggin has launched a scathing attack on energy sector privatisation, concluding that it has failed to deliver promised benefits for consumers.

Professor Quiggin examined 20 years of pro-privatisation reform in his report, Electricity Privatisation in Australia: A Record of Failure, which included a detailed economic examination of the outcomes of power sales in Victoria and South Australia.

His research has revealed that many of the claimed benefits of privatisation have not been supported, with key findings including: price rises have been highest in states with privatised electricity networks; customer dissatisfaction jumped, with complaints to the energy ombudsman in privatised states leaping from 500 to over 50,000 per annum; and real labour productivity has reduced as employment and training of tradespeople was gutted and numbers of managerial and sales staff exploded.

‘Privatisation, corporatisation and the creation of competitive electricity markets were supposed to give consumers lower prices and more choice, promote efficiency and reliability, and drive better investment decisions,’ Professor Quiggan said.

‘But after twenty years the evidence is that none of these promised improvements has been delivered.

‘After a marked fall in real electricity prices across Australia from the 1950s until the mid-1990s under public ownership, privatisation and the introduction of the National Electricity Market led to a reversal of that trend.

‘Prices have risen dramatically. A secure low-cost supply has been replaced with a bewildering array of offers, all at costs inflated by a huge expansion in marketing.

‘Reforms have failed to deliver a competitive market that benefits consumers. The evidence is there that public ownership of critical energy infrastructure is the only sensible response.’

Previous articleGinger Pig
Next articleNSW police launch RBT blitz

Support The Echo

Keeping the community together and the community voice loud and clear is what The Echo is about. More than ever we need your help to keep this voice alive and thriving in the community.

Like all businesses we are struggling to keep food on the table of all our local and hard working journalists, artists, sales, delivery and drudges who keep the news coming out to you both in the newspaper and online. If you can spare a few dollars a week – or maybe more – we would appreciate all the support you are able to give to keep the voice of independent, local journalism alive.

4 COMMENTS

  1. Finally some of the truth is publicly revealed, we must NATIONALISE OUR ESSENTIAL SERVICES AND ENERGY UTILITIES NOW, with the privatised multinational gas companies threatening massive price hikes we the people must demand the nationalisation of our essential energy services.

  2. Common sense dictates that handing over a public utility to private interests will put into action cartel behaviour, not free competition. Consumers do not really have a choice of sources of power. They have a power grid with a choice of biller. As the demand for power eases through efficiency, the privateers will try to maintain their revenue by any means – not necessarily honest. The folly of handing over infrastructure on which manufacturing industry and, indeed, defence depends, has never occurred to the “free market fundamentalists”, or if it has, they plan to live “off the grid” in Uruguay or some-place safe.

  3. Professor John Quiggin is a self-described social-democrat, and because of this, it should be of no surprise to anyone that he would pen an anti-privatisation rant. Indeed, this is Quiggen’s thing – his ‘anti-privatisation’ (and anti-capitalism) articles are everywhere.

    It’s annoying to me that the Echo (and other papers) place his title ‘economist’ ahead of his true title (socialist) because it lends the reader to place undue credulity to the article.

    Throughout his career Quiggin has repeatedly betrayed his economic ignorance through his myriad attacks on Austrian business cycle theory. In each instance his case can only ever be made because of his failed comprehension of basic economic fundamentals. I liken his stuff to the argument that the sun doesn’t rise in the East – you begin by expecting some amazing new insight into the solar system and planetary movements but quickly sink into disappointment and frustration as you discover his assertion is built on nothing more than a lack of understanding of the points of a compass.

    Electricity privatisation in Australia has become a pastiche of genuine privatisation in much the same way as it did with the ‘privatisation’ of British railways. Far from minimising state control and allowing true market forces to come into effect for the betterment of everyone, under state manipulated/directed ‘privatisation’ the level of government interference has actually increased instead.

    Taxpayer subsidies for renewable energy schemes have exploded and these have contributed to massively higher costs imposed on the electricity wholesalers and retailers, which have been naturally passed onto consumers. Higher costs have also to a large extent been the result of the fragmentation of the electricity industry. What was before a vertically integrated industry has now been split up, with different firms managing the infrastructure and running the grid, different firms involved in distribution and others again in retail supply. As a result, transaction costs have mushroomed.

    To say that this fragmentation is the result of ‘privatisation’ per se is nonsense. The government has imposed an artificial structure on the electricity industry from above. Moreover, the regulations imposed on the ‘private’ electricity market operators – as a result of political pointscoring – made it virtually impossible for some of these operators to close loss-making sections, effectively forcing them to continue running uneconomic services, which is only sustainable for a business if it can be passed onto consumers. Genuine ‘privatisation’ would allow operators the freedom to close uneconomic areas of operation and to cancel loss-making services. With so many quasi-government departments continuing to ‘advise’ the government on pricing, even blind Freddy can see that electricity in Australia is not truly ‘private’.

    Under genuine ‘privatisation’ operators would be freed from government price controls and allowed to set prices to address over-consumption, under-utilisation, aging infrastructure and a myriad of other issues including the competitive rise of alternative energy sources.

    A truly private electricity industry would be efficient, innovative, responsive to consumer preferences and would not require taxpayer support. It is time critics such as Quiggen stopped blaming privatisation for problems caused by government intervention, manipulation, meddling and intrusion.

  4. Scott, Typical Liberal/national rant … For anyone to promote privatisation of such essential services as electrical supply is really opening the door to foreign takeover, I shudder to think what follows……………………..

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Power outage in Byron Shire

Power supply company Essential Energy says that approximately 1,780 homes and businesses were without supply this morning.

Filming of Byron Baes begins with no indigenous consultation

Filming of the Netflix series Byron Baes has reportedly commenced without any effort made by the show's production company – Eureka Productions – to consult with local indigenous groups or the local Council.

Byron Comedy Festival launched with a laugh

At a hilarious sold-out launch of the Byron Comedy Festival, Dr Karl Kruszelnicki had the entire Byron Bay Surf Club giggling last night

School Strike for Climate next Friday

Next Friday from 10am Byron Shire students will be demanding political action on the climate emergency in what they and their supporters say is our present, future and reality.