nsw politics
5 May 2008
Introducing PowerChoices
Plans to privatise NSW's electricity assets have at least one thing in common with WorkChoices — no one's willing to put their money where Costa's mouth is, writes Andrew Elder
At this weekend's NSW ALP Conference, Premier Morris Iemma demonstrated three reasons why he can't be trusted with the State's electricity assets.Firstly, he lacks the courage of his convictions. Secondly, everyone who stood by Iemma looks like a goose today. Thirdly, it's the sweeteners that will kill this deal and cramp the reform of NSW's electricity system for years into the future.
It is standard practice within the ALP that politicians who vote contrary to a caucus resolution to lose the Party's endorsement. Before the weekend, an email to Labor MPs from NSW ALP President Bernie Riordan - to the effect that those who chose to vote to retain public ownership of electricity assets need not fear loss of their preselection - was leaked to the press. The weekend's vote of 107 in favour of privatisation, 702 against, means that the tables are now turned: those Labor MPs who stand by their Premier and vote for privatisation could find themselves like turkeys voting for Christmas.
The behaviour of Michael Costa, the strongest proponent of privatisation, did not help. He shook his fist at delegates and baited hecklers, leading Bernie Riordan to complain that Costa deliberately wanted the ALP to look like a rabble. Any Labor MP who supports electricity privatisation now looks reckless, and the dupe of a maniac.
Iemma said on the weekend that the money from the sale and lease would go to schools, hospitals and public transport. These facilities always need extra money, but Iemma set delegates up for disappointment. Public assets never return as much as they promise (the State Bank of NSW was sold for one third of the amount its purchaser valued it at), and an uncertain economic environment - in which previously strong companies find themselves on the ropes or scrambling to avoid capital shortfall - does not promise a strong return for assets.
What's more, NSW's electricity infrastructure needs investment, meaning that any purchaser will not only have to pay for assets valued more highly than their condition would warrant, but will also have to reinvest in newer, more efficient and environmentally sustainable equipment. This double price has not been considered by privatisation spruikers, but those approached to buy the assets know it full well and baulk at the prospect.
If there was a keen purchaser out there, you can bet that Iemma and Costa would have wheeled them out by now. In the same way that supporters of the Howard Government's WorkChoices legislation failed to put their money where Howard's mouth was, so too supporters of electricity privatisation are waiting for the sweeteners before they will go anywhere near PowerChoices.
NSW ALP Secretary Karl Bitar and Assistant Secretary Luke Foley, from the Party's Right and Left respectively, thought they pulled off a coup in deferring a final decision for 72 hours to save face for Iemma and Costa. In doing so, they have put too high a price on these two individuals and too low a price on the Conference resolving issues in a manner befitting a democratic party.
And so Iemma and Costa plough on, their supporters embarrassed and diminished and their opponents encouraged and strengthened. NSW, meanwhile, faces a looming power supply crunch that no new technology - not solar, not "clean coal" nor even the Faustian bargain of nuclear power - can realistically avert.
NSW needs an electricity supply that provides maximum output for minimum input and distribution loss, and doesn't ravage its environment. For the NSW Government, the only solace is that the Opposition has no answers either; but people knew that already, and nobody's better off for it.
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What union puts up with Costa as a member? For that matter, what unions do all the MPs belong to. Might be time for a true grassroots revolt. Kick them out of the union movement.
I don’t think Costa and his henchmen are through yet. This guy is the ultimate Machavellian. I would not be suprised if he has created this mess for Iemma to slip up on, and he can take the reigns. Lets not forget Cost was never elected into Parliament the first time (the second time he was in a safe seat so he could have pissed on his constituents and he would have won).
Costa was the old president of the NSW Labour Council. When Bob Carr and Della Bosca decided to screw workers with their workcover reforms, The NSW Labour Council with many larger unions such as CFMEU, TWU, MUA etc were set to do major stikes and cause big problemfor Carr’s govt (and Carr had no problem crossing the picket line at the protests either…like a true scab he is!).
Now Mr Costa had the cards in his hands as President of the Trades hall. What did he do? A big fat deal for himself. he annoucne3d they would accept the Carr govt workcover proposals, and pretty soon he was given his parliament seat, and withing a month he had his forst ministerial position. This man has no morals, no shame and no heart. Just the type of creature to make it to the top of the shit pile which was once labour.
The Unions should show some real convictions, and kcik themselves out of the Labour movement. Leave the labor party in NSW, give their funds to independants or the Greens, take the senate and then deal with the NSW govt. cause at the moment the workers of this sdtate are paying money to get spat in the face by professional bludgers and carpet baggers like Costa.
But see the unions are full of wannabe Costas waiting for their turn to at the trough so i can see a whole bunch of backhanded, backroom deals being done.
Is this the Enron model that NSW is after.
If the Labor governments would just stop wasting billions on administration and start focussing on producing useful outcomes, with an efficient infrastructure, we might start making progress.
We’ve got more regulations than you can poke a stick at, bureaucrats devoted to ‘social engineering’ and resentful unionists who don’t know how to organise for success and we wonder why things are falling apart.
To understand the problems in NSW, it’s instructive to see how the Soviet Union collapsed under the weight of its own incompetent bureaucracy.
I hear Jeff Kennett bleating on in support of ‘Dilemma’, Carr and Costa
today on ABC Radio. Very strange bedfellows, and yet not so strange.
All thugs, all Right Wing Ratbags. Privatization of Public assets stinks, so do PPPs. They are all designed to transfer profits to the Markets, big profits for lawyers, Corporations making millions by sucking the life-blood out of consumers. And they always seem to pay back the Pollies who give them what they want by giving them lucrative Directorships or such like when they leave politics. Just look at Carr.
Wonder what Costa has lined up, because I read that he was on his way to getting out of politics. Maybe if he does not deliver on this Privatization deal, he may miss out on a good after-politics job.
He sure looks and sounds frantic, and very, very nasty.
Desperation?
‘Dilemma’ is, as usual, as weak as p**s. Plus damned dumb!
Dazza.
Good story, actually according to electrical engineer with Phd, Dr John Kaye MP (Greens) there is a view that major roll out of conservation measures (don’t glaze those eyes) can easily avert a power shortage. Really.
Presumably like metering which is big in some other countries so people can see where their usage is and how much. Intuitively it sounds right to knock 25% of most peoples power bills. If you don’t directly measure you can’t know. But this is contrary to the endless growth as long as you pay $ philosophy which is actually hitting the wall, and real hard like at the ALP conference. If unionists understand one thing I reckon it is this: Little people are treated like cannon fodder. In the dangerous climate change reality we are moving into that means rich folks quarrantine themselves and the rest are … well, cannonfodder.
We may be witnessing the first blow back in the shifting political economy away from 20C endless growth to a more sustainability based frame of mind. I sure do hope so. 6-9 billion lives probably depend on it. That’s the point with Costa’s maniacal rant - he seem to have a big denial neurosis that endless growth economy like a $5B construction project Port Botany to a new M4 East where much of the sale revenue will go (and before schools and hospitals would be my view) is still okay.
But if you really believe in what the best scientists are saying about 350 ppm CO2 is safe and we are already way beyond that, and I do believe them with my own science degree to guide me, then we are really in for some big changes in attitude and politics. Iemma said a few months back in head shaking reality - there is no environment without the economy. Just dwell on that incredulous brainwashed intellectual mediocrity. I’m first to agree a functioning economy is useful (corporate law degree too) but hey it’s out of the environment not the other way round. Just look at the Aral ‘Sea’.
Morris might be a good bloke but a leader for the 21C he is not I’m afraid. And Costa never came close.
On another tack I’ve checking the main media today on this: lots of talk about how the ‘elected Iemma Premiership’ is versus ‘the traditional union influences’ over the ‘reform’ of public energy into private hands. ABC 702 had ex hacks like Hewson and John Brown and Carr has been everywhere never declaring his financial conflict of interest with Macquarie Bank (is that a basic journalistic rule, except when it suddenly becomes optional?).
Veteran Alex Mitchell now at crikey.com.au has ripped into the daily press in Sydney along similar lines today for their mediocre editorialising amongst the straight reportage. Hardly a union stitch up at the ALP conference when 75-85% of the branch delegates and broad public agree with them. And it’s true there have been some decent balancers on ABC like Emma Griffiths on tv, and Adam Spencer ran Robertson of Unions NSW earlier in the day though I missed it.
But overall the conclusion has to be that the ABC is quite controlled by the big industry and big govt conservative agendas. It’s why the independence and free thinking of such as New Matilda remains highly relevant and valuable. We are going to need a new media that moves from the philosophy of a sustainability economy not a growth economy to make folks in investment banks richer at the expense of little people.
Surdo fabulam narras,
(I hope you know some Latin! If not, ask the pope when he comes out here soon)
Is it opus dei Catholicism or good night Irene?
Both sides of politics have their fair share of paid up card carrying, whip flagellating members.
We need more Liberal opposition leaders attempting to commit suicide, or sniffing their female colleagues chairs (was she actually sitting in it at the time?)
Maybe the Mac bank or the witch bank can appoint all these has beens to lucrative consultative posts with all their insider knowledge.
Meanwhile our pollies whilst looking dumb and dumber continue somehow to screw us further and further.
I can only agree with the above comrades Dazza and surdo et al, my sworn enemies on other postings, whilst the "brightest boys in the room… Whatever are they doing in there?" try to sell off the ruins of our electricity power stations.
Carr left them (and us) in this predicament, maybe Costa can broker a deal for a loan to make the necessary patch uprepairs necessary to keep the thing trundling along until after the next election. Maybe the foreign review board will allow China to buy whatever is left of the place by then.
I would’nt cry too much for the diddled unions either.
They are only as good as the employees who elect them.
And we all have got the governments we deserve.
So what’s everyone complaining about?
Ah I hear you say, democracy does’nt work ya mug!
So here we go round the mulberry bush again.
Latest update blog post this real time evolving story to NSW Caucus this morning:
6 May 2008
Public energy: Keating, Easson fail to declare financial conflict in Big Media, ABC today?
Mood: down
Topic: nsw govt
http://www.sydneyalternativemedia.com/blog/index.blog/1811533/public-ene…
Electricity inquiries show no spark, Betty Con Walker and Bob Walker
March 26, 2008
http://www.smh.com.au/news/opinion/electricity-inquiries-show-no-spark/2…
"Betty Con Walker is a former Treasury official and runs Centennial Consultancy. Bob Walker is Professor of Accounting at the University of Sydney. They are the authors of Privatisation: Sell Off Or Sell Out? The Australian Experience."
…….
As best we can tell Paul Keating has failed to adequately declare his direct financial conflict of interest in the public energy sale plan going to NSW caucus, as has the Sydney Morning Herald generally in his opinion piece today about public energy assets. This guy and Michael Easson are talking their corporate book. It’s an outrageous breach of journalistic standards to downplay this reality:
Stephen Mayne has the story, as did the AFR previous to him: [bold, text sizing added]:
Crikey - Conflicts aplenty in NSW power privatisation debate …
at
http://www.crikey.com.au/Politics/20080429-Conflicts-aplenty-in-NSW-powe…
Tuesday, 29 April 2008
Stephen Mayne writes:
Alex Mitchell has been keeping Crikey readers up to date about the remarkable stand-off inside the NSW ALP over the vexed issue of power privatisation, which will probably see Premier Morris Iemma and Treasurer Michael Costa defeated at Saturday’s special ALP conference.
However, no one has yet mentioned the conflicts of interest involved, especially for key players such as Paul Keating and Bernie Riordan.
Riordan has a double act as ALP President in NSW and secretary of the Electrical Trades Union. He’s the Dean Mighell of NSW but rather than being expelled by the ALP he’s President of the whole show.
Tuesday, 29 April 2008
Stephen Mayne writes:
Alex Mitchell has been keeping Crikey readers up to date about the remarkable stand-off inside the NSW ALP over the vexed issue of power privatisation, which will probably see Premier Morris Iemma and Treasurer Michael Costa defeated at Saturday’s special ALP conference.
However, no one has yet mentioned the conflicts of interest involved, especially for key players such as Paul Keating and Bernie Riordan.
Riordan has a double act as ALP President in NSW and secretary of the Electrical Trades Union. He’s the Dean Mighell of NSW but rather than being expelled by the ALP he’s President of the whole show.
Riordan is a solid lefty who has led the campaign against energy privatisation. But how can a bloke who represents a special interest group known as electricity workers dictate the policies of government as they relate to those same workers?
Riordan’s conflicts go to the very heart of the ALP’s gerrymandered structure which guarantees unions 50% of the votes at party forums, irrespective of how many members the unions or the party has.
The heavily conflicted Riordan is exploiting that gerrymander for all it’s worth right now when surely the ALP would have a code of conduct that prevents individual union leaders influencing party policies that relate directly to their industry.
Such a conflict would raise plenty of eyebrows in the corporate world. Then again, this is NSW and Riordan’s left wing supporters point to conflicts amongst his right wing pro-privatisation critics.
The biggest is this: Should Paul Keating be holding meetings with Unions NSW secretary John Robertson and Riordan when he is the international chairman of Lazard Carnegie Wylie, the advisory house which landed the lucrative energy privatisation gig with the NSW Government?
John Wylie is Australia’s leading energy privatisation exponent, as you can see from this list of power deals over the past 15 years.
He led the $30 billion worth of energy sector privatisations for Jeff Kennett and his old firm CS First Boston collected more than $100 million in fees. Wylie’s share is thought to have been well over $20 million.
Wylie left CS First Boston to establish the boutique adviser Carnegie Wylie with his old Oxford mate Mark Carnegie shortly after Kennett lost office. They then came together with Lazard last year which was led in Australia by Paul Keating’s long-time mate Mark Burrows.
If Keating stands to personally profit from NSW belatedly following Jeff Kennett’s lead, then surely he shouldn’t be using his ALP connections to get involved in the lobbying ahead of Saturday’s conference.
In the interests of full disclosure, perhaps the parties should place all the cards on the table. What is the nature of Lazard Carnegie Wylie’s contract with the NSW Government and what is the nature of Paul Keating’s contract with Lazard Carnegie Wylie?
Send your tips to boss@crikey.com.au, submit them anonymously here or SMS tips and photos to 0427 TIP OFF.
…………..
Here is Michael Easson - a long time out of the NSW union movement - and deeply in the construction and property side of the industry, none of this declared on ABC 702 morning show at 7.15 am, or a letter published in the Herald today:
http://www.pentaclefunds.com/directors.asp
Mr. Michael Easson, Non-executive Director
Michael has professional experience across a broad range of industries, is the founder and chairman of the EG Property Group as well as currently a business consultant to Allens Arthur Robinson Lawyers. Michael’s directorships include ING Real Estate, InTech, Stadium Australia Management Limited, ACT Electricity and Water (where he is deputy chairman). Michael is a former director of Macquarie Infrastructure Investment Management Limited, the managers of the Macquarie Infrastructure Group.
Kaye MP media release is pretty right here, corroborated by Andrew Main, currently business editor of The Australian, formerly Australian Financial Review (re 1/2 industry, 1/2 value point by Kaye below). Main was not hammering this point, just a throw away line on Deb Cameron 702 this morning, and what a line it is. Back to Kaye here (with Phd in electrical engineering too):
Keating confused on power sell-off facts
Media Release: 6 May 2008
Former Prime Minister Paul Keating’s attempt at defending the privatisation of NSW’s electricity industry is based on a number of incorrect and misleading assertions, according to Greens NSW MP John Kaye.
Dr Kaye said: "Labor MPs should not be intimidated by Mr Keating’s self-confidence or his use of colourful epithets.
"He has displayed a remarkable level of ignorance of the NSW power sector.
"Writing in today’s Sydney Morning Herald, Mr Keating asserts that value of the power stations was $35 billion in 1997 when former Premier Carr and his Treasurer Michael Egan tried to privatise them.
"In fact this was the estimated income from the sale of the entire industry, including the wires and poles of the distributors and the transmission system.
"Comparing this to the alleged $15 billion price tag for the current proposal which does not include any of the transmission or distribution hardware is deeply misleading.
"Mr Keating has conveniently ignored the billions of dollars in the low and high voltage network that then Premier Carr wanted to sell off and was included in the $35 billion price tag.
"He has wiped out the value of 12,440 km of high voltage transmission lines owned by Transgrid.
"He has written down to zero the $10.9 billion assets of the state’s electricity distributors, including 2.2 million power poles and the 169 thousand substations.
"The former Prime Minister also alleges that much of NSW electricity is provided by private generation in other states.
"Again he is woefully ignorant of reality. The total import was just over 10% of the state’s needs in the last financial year.
"Paul Keating might well resort to name calling and personal denigration of those he does not agree with, but he should check his facts first.
"Mr Keating’s fundamental errors are cause for concern given his role with Lazard Carnegie Wylie who are supplying advice to the Iemma government on the sell-off," Dr Kaye said.
For more information: John Kaye 0407 …. ….
I really do think that the pertinent point here is that about 85% of the Public of NSW say NO to the privatization of the Electrical Industry. In fact, support for Privatizations and PPPs is dropping markedly, as they see that in the end it always ends up costing the Taxpayer a lot more, and the Free Marketeers make billions. Far too many pollies and ex-pollies stand to make money out of Privatizations. Far too many pollies and ex-pollies have vested interests in flogging off Publicly Owned Assets. With ‘our’ Mass Media owned by Big Business, we are never going to be allowed to see what is happening, if they can help it. The ABC (still operated by Howard Govt. people) is woeful in their coverage of this fiasco, bleating the Big Business line, with no coverage of the fact that no Corporation, local or external, is going to be interested in buying these Assets unless the Taxpayer of NSW coughs up lots of monetary sweeteners, like billions of them. Such sweeteners would be covered up, disguised, but they will have to be there for anyone to come into this. No buyer is going to be interested in providing the finances for all the new Coal fired infrastructure that supposedly will be required, (but in actuality will NOT be necessary). All these pro-sale players know this full well, but do not want the general public to know.
Also, the supposed run-down of generated electricity in the next five years or so, necessitating new generation infrastructure to be provided by Private Enterprise (but paid for with taxpayer dollars), can be alleviated or even perhaps negated by better usage of power, and as Tom McLaughlin says above, more focus on the reduction of consumerism and wastage. The ‘Dilemma’ Government is living in the past, and unless they or their successors quickly wake up to the fact that such policies can not continue, they and NSW are doomed. Coal mining and burning MUST be curtailed, and more money put into sustainable energy generation, such as Solar, Wave, Thermal, Hot Rock, Wind, if the world is to survive. Unfortunately, Governments in Victoria, NSW, Queensland are so dependent on the income from coal mining and transport (Rail in Queensland) that they can not see over the coal pile on the wharves. The latest leak from the federal budget, suggesting that Swan is about to give the coal Mines more millions to waste on ‘Clean’ coal technology, indicates that Rudd and Co. can not see over the coal pile also. Or maybe all of them are getting sweeteners from the Coal Industry and the Coal Power Industry to continue down this insane path.
This bloody mess sure has seen the ‘interested players’ such as Keating, Kennett, Carr and all the rest come out from behind the screens and bleat their self-serving garbage, undoubtedly seeing their future earnings of millions of dollars of taxpayers money being threatened. Just wish we had some decent media, besides New Matilda and perhaps Crikey on occasion, to tell it like it is.
But the ABC and SBS are not going to fill this gaping gap until their management and Boards are ‘pushed out’, and their places filled by people with no Howard Right-Wing Agenda, or any Labour Right-Wing agenda, for that matter.
Dazza.