Prominent 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.’