Presenting at hearings in Perth for the People’s Inquiry into Privatisation, UnionsWA has highlighted the risk to our economy, jobs and household costs of living resulting from further privatisation, such as Western Power.
Meredith Hammat, Secretary UnionsWA said:
“Privatisation both weakens governments and diminishes services to the public. Privatised companies have to deliver a profit for their owners, which means either reduced costs or increased prices – or both. There is strong evidence that higher prices have resulted from privatised electricity providers in other states. A recent NSW Parliamentary Inquiry into electricity privatisation heard from Prof John Quiggin, quote:
“…the lowest prices were in Queensland, under public ownership, and the highest in South Australia under privatisation. It is important not to overstate the significance of these differences. The overwhelming factor driving higher electricity prices in Australia has not been privatisation per se but the failure of the National Electricity Market. However, the designers of the market relied heavily on the assumption that the process of ‘reform’ would eventually culminate in privatisation, and that competition between private firms would drive prices down. Of course the opposite has happened.”
"Such increased costs to the public are driven by private ownership and the compulsion of companies to deliver profits to shareholders. Job losses in utilities frequently occur prior to a sale in order to boost a sale price, and after sale, in order for a new owner to increase profits. In the rush for cash, too little attention is given to longer-term needs for system maintenance or investment.
"We have seen in WA with bushfires and South Australia with its recent power shut down, that poor maintenance of electricity systems can be harmful to people’s livelihood. Ironically, Premier Barnett has also pointed to one of the hidden costs of privatisation, the cost to our economy and jobs.
"In 2013, in the lead-up to the state election that year, Barnett said, quote:
“The reason that you would retain the energy utilities in government hands is the energy utilities are the major engines of economic growth in this State and only through ownership of utilities can you guarantee supply and reliability of supply.”*
"Another leading economic role traditionally performed by publicly owned utilities has been that of taking on apprentices. Privatisation puts at risk this important role in building our skills base. Our vocational education and training sector is itself suffering from privatisation. Part of this has been recent, very large increases in TAFE fees of over 300% and a resulting fall in enrolments.
"This is all taking place in WA as unemployment is rising – at the worst possible time.
Recent comments from Australian Competition and Consumer Commission's chair, Rod Sims have criticised privatisations as costing consumers and that, quote:
“I am now at the point of almost opposing privatisation.”
"Many prominent West Australians and Australians have voiced their criticism privatisation. It is great that the People’s Inquiry into Privatisation can hear from many more people and have as its’ focus, the impact of privatisation on people.”
Additional Information:
The People’s Inquiry into Privatisation is sponsored by Public Services International, affiliates of which are public sector unions. See the website for more details and submissions.
The UnionWA submission to the Inquiry is available here.
*The quote attributed to Premier Barnett is cited from The West Australian (‘Labor’s poll ploy pole-axed’, 20/10/16, p. 17) by Gareth Parker.