I have a piece in the Courier Mail today urging the Queensland Government to move as early as possible to privatize their electricity system.
The networks are particularly valuable and seem to be run relatively inefficiently – costs are over 50 per cent higher than in the privatised Victorian and South Australian systems. The over-staffing causing this is one reason why the power sector unions are desperate to avoid the discipline of privatisation.
One difficulty not addressed in the article is the complex arrangements in place for financing community service obligations between the different entities – a privatised Ergon network that increased its revenues might lead to higher government payments. Another complication is the disastrous retail tariff freeze which needs to be worked through.
As well as the networks the Government still owns chunks of the generation businesses, in fact more than half the output. The generation is coal fuelled and might be difficult to sell this side of an Abbott victory, and even then given all the penalties heaped on coal it may need some assurances that the government will indemnify new owners from measures that devalue the stations’ worth through carbon taxes, promoting renewable energy and so on.
All these issues are resolvable and all the time that privatisation is deferred is a cost to the taxpayer as well as a drain on the state’s productivity