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sydney alternative media - non-profit community independent trustworthy
Monday, 21 January 2008
NSW Energy privatisation: Trusties on new committee make it a sell off stack?
Mood:  incredulous
Topic: nsw govt

Cartoon via Sydney Morning Herald 2007

Apparently Morris Iemma has been promoting a colour brochure of his effective leadership within the NSW ALP Parliamentary party. This must take the role of spin by the ALP machine to even greater heights:

Premier calls in spin doctors to help power sale bid | The Daily Telegraph  19 Jan 2008

It also suggests Iemma is really quite worried about his $15B privitisation agenda crashing and his leadership with it. Today we read of a new so called committee "to consider the effect of the sale on the state's electricity industry".

Unsworth to head electricity committee 21 Jan 2008

On face value it looks an obvious stack of the committee despite overwhelming public opposition, a numbers game fix beloved of Iemma & Co for a sale, as follows:

A FORMER ALP state premier, Barrie Unsworth, will chair the group established by the State Government to consider the effect of the sale of the state's electricity industry./As a former union official who started his working life as an apprentice at Bunnerong power station, his selection has been endorsed by union representatives on the committee.

Comment: Barrie arguably is a dependent of the Sussex St machine in retirement. He will want to deliver whatever they want in a majority report. Union endorsement suggests they believe Barrie's spirit is still willing on the idealistic front but we still think the flesh will be weak in time honoured ALP back room fashion. Unsworth will try to be an honest broker and mediate a deal for the machine.

Other members include three union representatives - Ben Kruse of the United Services Union, Matt Thistlewaite of Unions NSW and Steve Turner of the Public Service Association

Comment: all three will oppose privitisation unless instructions from the their union membership suddenly change. Unlikely. 

- and two community representatives, UnitingCare's Reverend Harry Herbert ...

Comment: Harry Herbert looking at welfare concerns has a history of constructive collaboration with the NSW ALP. He won't try to oppose the govt on principle but seek to salve his ethical conscience over loss of a natural monopoly/essential service out of public hands by mitigating impacts on the poor. No overt side deals on policy tradeoffs but you never know, like ongoing govt support for the MSIC

 .....and Jeff Angel of the Total Environment Centre.

Comment: An honest representation would have included someone like Professor Stuart White of Institute of Sustainable Futures,  or Dr Mark Diesendorf of the Institute of Environmental Studies UNSW. Both of these are experts on renewable energy and conservation with good credentials as indepedent of politics. Angel, or "Angel of Death" as one cynical Greens local councillor refers to him has a highly controversial record in the broad green movement - inclusive of substantial Green Party with 3 MP's - for gazumping green campaigners with tradeoff deals with this NSW ALP Govt when they are in a tight spot. This well understood aspect of Angel as an ALP trusty keen for a deal is generally not reported by the Big Media fearful or contemptuous of more radical independent voices out of the ALP's grasp but the links provided here remain strong evidence of govt collaboration and we argue demonstrably at the expense of the public interest.

Specifically on energy privatisation we can report this indicative anecdote of 1996 as reported by John Connor then exec officer of NSW Nature Conservation Council (later ALP aligned Climate Institute), with others including Jeff Angel in the foyer of Bob Carr's office for a lobbying meeting: There is a delay. Staff emerge and speak openly to these allies in the tough state election battle the year before: 'We are looking at a $450 million green fund out of the sale of the state's energy assets, like the Telstra $1B Natural Heritage Fund'.  Significantly the ALP advisers were cocksure of support of narrowly focused peak green group reps like Angel they had cut policy tradeoff deals with already and given the nascent Green Party were still no threat to that PR approach. Since 1996 this compromise on public interest policy has been greatly reinforced on such as:


Government representatives are the director-general of the Department of Premier and Cabinet, Robyn Kruk, and David Richmond, the co-ordinator-general of NSW, ....

Comment: Both loyal govt public servants they will seek to deliver the energy industry sell off as instructed by their ministers/Premier.

 ....and two state ALP politicians, Steve Whan and Michael Daley.

Comment: Both right wing Sussex St machine men. We understand Whan was pro Snowy Hydro sale until the wheels fell off in 2007 and will want to manage the politics of that again, otherwise do Iemma's bidding. Daley in Carr's seat in Maroubra is a creature (advisedly) of the Right who we understand has showed concern or at least agnosticism to noisy local branch members but privately stated it should have been sold years ago, and if the sale and similar policies eventually led to an economic crash (like the fear in the USA) then it would be after he's gone (!)

According to this head count above we have 3 against and 2 possibly swinging (Unsworth, Herbert) but arguably for, and 5 for the sale for whatever reason. Worse case scenario for democracy it's a fix at 3 versus 7 despite overwhelming public opposition to the sale.

Postscript #1

This is the biggest govt policy play in town and for a long time too. Not surprisingly there is an update story already here early afternoon:

  • 1:53pm | NSW unions will try to halt power sale
  • Postscript #2

    In our main post above we suggest Diesendorf or White as worthy experts on renewables and conservation policy rather than Angel. On Tuesday 22nd Jan 08 Clive Hamilton of the Australia Institute (to step down sometime) has entered the fray. He is indeed a highly credible expert on resource economics as it relates to greenhouse/climate policy and could also have been added to our list of possibly greater reliability to Jeff Angel to tell it straight, no side deals. Maybe or maybe not, because like Angel, Hamilton is also very connected in the ALP. Arguably even better than influential Jeff Angel, having once been head of research for the Hawke inspired Resource Assessment Commission.

    We wonder if the against case within the ALP Family have already moved to annexe Clive's expertise by either lobbying or employing him to do his "independent" report much like one lawyer in a stoush retaining experts to the exclusion of the rivals? A scan of Clive's paper suggests a non financial motive of getting square with "climate sceptic" NSW Treasurer Michael Costa: Clive would reject outright he is a gun for hire, or even if so that it might affect the integrity of his research & analysis, and there is no doubting his commitment to the view climate change is the over arching environmental problem (he lambasts opponents of wind farms for not getting the gravity of the threat). We do tend to trust him.

    In any case Clive is a top academic and must be taken seriously. He effectively gazumps Jeff Angel which we find quite ironic. Always a bigger fish as they say. Here's the link to Clive's presser (a samll PDF), and full paper (a 5 page PDF) and to a Herald report on this important turn of events, and notice the very big sting in the tail [bold added]:

    Taxpayers face $15b power sale sting Sydney Morning Herald Date: January 22 2008

    Andrew West and Brian Robins


    NSW taxpayers could be forced to pay more than $15 billion to indemnify private companies bidding for the state's power assets, a report has found.

    The indemnities - against losses that privatised coal-fired power stations would face under a new national carbon trading scheme - would wipe out the $15 billion revenue boost the Iemma Government expects to gain from the privatisation.

    An analysis by the independent think tank the Australia Institute has revealed the carbon trading scheme the Federal Government intends to introduce to combat global warming would dramatically reduce the value of coal-fired generators.

    According to the author of the report, economist and institute director Clive Hamilton, the cost of the indemnity could reach $15.4 billion.

    "This amount would be the cost borne by NSW citizens if the NSW Government indemnifies private buyers against future carbon liabilities," he concludes.

    Under the proposed national emissions trading scheme, scheduled for 2010, all electricity generators and other producers of carbon will need permits to cover their greenhouse gas emission. The scheme aims to impose a cost on electricity generated through fossil fuels and remove the price advantage that coal enjoys over gas and other renewable energy.

    The State Government has challenged the institute's findings. Alison Hill, a spokeswoman for the Premier, Morris Iemma, told the Herald last night: "There will not be an indemnity."

    But the Iemma Government has set a precedent by indemnifying Bluescope Steel for the next 25 years to ensure new investment in its Port Kembla steelworks.

    "The Government has form on this issue," Dr Hamilton said. "And they will come under even greater pressure from potential buyers to offer them indemnities, too. There is nothing to say the Government could not, and would not, do this in secret, using all sorts of commercial-in-confidence provisions, and the public may know nothing about it for 20 years."

    The NSW Government said last night the indemnity given to Bluescope did not apply if a carbon trading regime was introduced.

    The Rudd Government is yet to clarify the details of its trading scheme, adding to doubts raised by the institute about the liability NSW taxpayers face.

    "It's a bad time to be selling electricity assets when there is so much uncertainty about the carbon liability of coal-fired power plants," Dr Hamilton said.

    The institute's report warns that no prudent investor would commit to major expenditure in such a risky commercial environment, predicting that "carbon liability and the indemnity issue will dominate negotiations in the sale process".

    The electricity industry is asking the Federal Government to grant carbon permits to offset the immediate financial penalty operators of coal-fired power stations would face from a carbon trading scheme.

    "We would seek a one-off allocation of permits to generators so that their position would be preserved, so they would be willing to consider investing in new generation technology," the executive director of the National Generators Forum, John Boshier, said.

    Dr Hamilton doubts the Federal Government will agree to the electricity industry demands because such permits would undermine its carbon trading system.


    Posted by editor at 12:12 PM EADT
    Updated: Wednesday, 23 January 2008 6:46 AM EADT

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