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Fudged figures used in power privatisation pitch to deceive NSW voters into supporting sale

Jun 2, 2014

Claims that the privatisation of the NSW electricity network could deliver $30 billion for infrastructure projects contradict the government’s own figures and are part of a deliberate attempt to trick NSW voters, according to the Stop the Sell Off campaign.

The Daily Telegraph has reported that a sale of the publicly owned poles and wires – possibly through a staged sale or long-term lease arrangement – is expected to be flagged by Premier Mike Baird in the state Budget later this month.

Stop the Sell Off campaign director Adam Kerslake said that the Premier and his fellow proponents of the sale were continuing to use deliberately deceptive figures to convince the public – which is overwhelming opposed to a sale – that it is in their best interest.

“Rather than spin and ideology, we want to see a genuine debate that examines the facts and allows the people of NSW to make an informed decision on the future of the electricity assets that they currently own,” Mr Kerslake said.

“This is about four publicly-owned businesses – Ausgrid, Endeavour Energy, Essential Energy and TransGrid — which own and operate every power line in the state, from the high-tension towers down to the poles and wires slung along suburban streets.

“According to Infrastructure NSW, these four businesses are worth a combined $26 billion dollars, but according to their most recent annual reports these same businesses are currently carrying debts of $19 billion.

“So if the NSW Government’s own figures are correct, the windfall to Treasury from privatisation would be just $6 or $7 billion — and that is before the costs of carrying out the sale are taken into account.

“Considering the North West Rail line has a price tag exceeding $8 billion and the West Connex is priced at $13 billion, the sell-off of the state-wide electricity network would not even fund one of those projects.”

Mr Kerslake said the situation became even more stark once an examination was made of the ongoing income that would be lost once the poles and wires were privatised.

“Many people in the community mistakenly believe the electricity network is a financial burden to the state, but it is actually hugely profitable and provides billions of dollars a year to fund schools, hospitals, roads and other infrastructure,” he said.

“According to the NSW Auditor General, these businesses paid almost a billion dollars in dividends to the State Government last financial year, with the addition of tax equivalents and interest payments taking the total figure to more than $2.5 billion dollars.

“Not only are the electricity network businesses profitable, the revenue they are delivering to the NSW Government has been steadily growing, but once sold that ongoing revenue stream would dry up.

“Under a worst-case scenario, it would take just three years for this budget shortfall to chew through the entire windfall from a power sale.”

The Stop the Sell Off campaign is highlighting the experiences of other Australian states that have privatised their electricity networks, where consumers have been left paying more for their power.

“South Australia now has the highest electricity prices in the country while customer complaints in Victoria have gone from around 5,000 per year before privatisation to more than 56,000 last year,” Mr Kerslake said.

“Premier Mike Baird claims that privatisation will result in lower prices, but the experiences of every Australian state that has tried this — not to mention the findings of the Australian Competition and Consumer Commission — do not support this.

“In March this year the ACCC said that the sale of power stations in the Upper Hunter would result in higher electricity prices, not the lower prices claimed by the Premier.

“Mike Baird is prepared to say or do anything in order to do a deal with his mates in the banking sector.

“The electricity network will not be sold to a charity, it will be sold to big business looking to collect the largest possible profits, which means higher prices, poorer service, and NSW families and small businesses left worse off.”

Mr Kerslake said it was an understanding of those facts that was driving the opposition to a sale in the community.

“Even the latest Galaxy Daily Telegraph poll, which was based on an exaggerated promise that a sale could raise $30 billion for infrastructure projects, still found that just a third of the community supported a sale,” he said.

“Premier Mike Baird needs to listen to the public, put aside his ideologically driven privatisation push, and commit to retaining the electricity poles and wires in public hands.”

Media comment: Adam Kerslake – 0425 231 820

Further information: Paul Lister – 0408 231 858