Electricity privatisation in Australia: A record of failure
Press release from the New South Wales Electrical Trade Union (ETU):
New report lays bare electricity privatisation’s “record of failure”
Posted on 20-2-2014
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;
* resources have been diverted away from operational functions to management and marketing, resulting in higher costs and poorer service;
* reliability has declined across a wide range of measures in Victoria;
* promised increases to investment efficiency have not occurred;
* real labour productivity has reduced as employment and training of tradespeople was gutted and numbers of managerial and sales staff exploded;
* private owners are receiving unjustifiably high rates of return based on the low investment risk; and
* consumers in privatised states bear the cost of approximately 10 per cent per annum interest on private owners’ debt, compared to substantially lower government borrowing
costs of three per cent.
SNIP
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