Watts going on?

There is this major Australian political party that claims in it’s constitution to be in favour of the “socialisation of Industry, Production, Distribution and Exchange”. And yet the NSW branch of that party sets itself on a course to privatise the state electricity industry. It does this with support from the federal wing of the party.

Then there is this other major political party that says it is in favour of free enterprise. It’s NSW wing decides to block the privatisation in the state upper house.

So I say “watts going on?”

Clearly the slogans and philosophical claims of these two parties need to be taken with a large pinch of salt.

41 thoughts on “Watts going on?

  1. Clearly the slogans and philosophical claims of these two parties need to be taken with a large pinch of salt.

    I don’t think we needed any recent developments to know we should be doing that.

  2. Iemma and Costa have now said they are going to privatise the retailers and development sites without legislation. They claim they have the support of Cabinet and Caucus, so it looks like the union bovver boys and their new Liberal mates will lose anyway. Good, good.

    They’ll end up the pinup boys of history like Hawke and Keating at this rate. The pressure they are under is enormous.

    The next NSW election is not until March 2011. That’s a long time for the Liberals to be reminded of their socialist underbelly.

  3. Mr O’Farrell said this morning there was too much “current uncertainty in the energy sector” to justify a sale.

    “There is currently a lack of clarity and details about the federal government’s emissions trading scheme and the prevailing market conditions are not favourable,” he said.


    DavidL – I’m not sure Costa and Iemma will win this battle but time will tell. They have certainly been a lot more gutsy than the Liberals and have played a high stake game.

    Barry O’Farrell thinks uncertainty in the energy sector means this is a bad time to sell. If so then why not simply go ahead with privatisation and if the people of NSW agree with him they will have the chance to buy. Why not give people the freedom to choose for themselves like adults?

  4. Why should O’Farrell support the privatization when he/we know(s) the ALP will waste the money by showering their constituency with goodies?

    I don’t blame O’Farrell here and it’s short sightedness and disingenuous to suggest that because he doesn’t want the money in the hands of incompetents he’s therefore against the privatization. I wouldn’t support it either and I’d sell the government toilets if I had a chance.

    O’farrell is doing the right thing.

    Furthermore with the ETS coming up why would you expect anyone to bid at the best possible price when you would have to bid on a worst case scenario.

    Libertarianism is about being dumb.

  5. O’farrell is doing the right thing.

    No he isn’t. He is doing the pragmatic and political thing which is opposing an unpopular reform. The right thing would be to support the privatisation with caviats. If the concern is that the government would wasting the money he could say he supports it as long as NSW electricity consumers are gifted the vast bulk of the shares. Or any number of other things that give Iemma the freedom to get the job done without the freedom to waste the money. Market uncertainty is not a good reason to block electricity privatisation.

  6. Why should he support the privatization if he thinks those bozos are going to misspend the funds? Which they will of course.

    And don’t be silly, no government from these parties is going to gift the shares to the public. Furthermore you’re holding him to a higher standard than you expect from these trogs as they would never gift the shares in a million years. And why are you doing that I wonder.

    Why should he support the privatization with caveats that he has no way of ensuring they will keep their promise? There’s no way Iemma would hold to those caveats.

  7. And why are you doing that I wonder.

    There is no holding of O’Farrell to a higher standard. Iemma is supporting privatisation. O’Farrell is opposing it. So on this issue Iemma is right and O’Farrell is wrong. Why are you holding O’Farrell to such a low standard?

  8. There is no holding of O’Farrell to a higher standard.

    You are by stating earlier that O’Farrell could suggest gifting the shares. I didn’t see you suggesting this for Iemma.

    We all know governments waste money. However if that was a good reason for opposing privatisation then I doubt we ever would have had any.

    yes, but some are worse than others. It’s clear that the reason labor is trying to move ahead with the privatization is to ge the money to spend it on it potential constituency. You obviously think this is ok?

  9. I didn’t see you suggesting this for Iemma

    Simply because you never suggested that Iemma lacked faith in the spending wisdom of the Iemma government.

  10. JC, I profoundly disagree with you. The issue is not about the proceeds and whether Labor would waste them more than the Liberals or even if the price is less them optimum. I find it hard to believe there’s any difference between Labor and Liberal, but even if you are right it makes no difference.

    Whatever happens to the proceeds, Governments are not good at running a business and should get out of the way. NSW needs an electricity service based on commercial principles, not union-driven feather-bedding. It also badly needs major investment in generating capacity, which it’s not going to get so long as there are publicly owned generators run by the union bovver boys.

    Victoria’s privately owned electricity generators are likely to end up selling expensive power to NSW because no company will build a generator in NSW. I don’t mind the interstate aspect, but it wouldn’t happen if it was simply commercial principles driving it.

    O’Farrell has abandoned any right to lead NSW. He’s exposed as a political opportunist of the worst kind.

  11. No David, not all government are as bad as the last one. Iemma’s is quite possibly the worst ever and it would be ruinous if the ended up with the loot.

    Even Keating himself has said that he supports the privatization because the state could then use the money to assist in welfare. Terrific idea! Not.

    No, it’s better to wait two years and the other guys sell it and hope the money will be used wisely. The last thing you want is this crowd with 10 billion dollars in their pocket looking to win an election. It will be gone in 5 minutes.

  12. DavidL – It is a while since I looked in detail but the interconnectors between NSW and Victoria and also to Queensland put some signficant constraints on the volume of power we (NSW) can import. We should look at the other states more as peaking capacity rather than as a substitute for baseload.

    JC – I’d rather have Iemma in the road building business than in the electricity business. And your blind faith in O’Farrell in terms of small government credentials would seem misplaced given that the guy just demonstrated that he isn’t even in favour of free enterprise.

  13. Oh Nonsense Terje. I don’t have blind faith in O’Farrell. That’s just you making that silly claim. The fact is that this is government is about the worst most incompetent government in history. Give them a dollar and they will misspend it. Give them 10 billion and they’ll find a way to dole it out to their buddies in the union movement or elsewhere.

    And it’s not as though they would spend it well either. The money will simply go into union devised rorts.

    Naa. It’s better if the other guy privatize.

  14. it’s better to wait two years and the other guys sell it and hope the money will be used wisely.

    It’s better to sell it as soon as possible so that the market for electricity can operate in NSW like it already does in Victoria and SA.

    Standard and Poors have also made it clear that the state’s credit rating will be reduced if it’s not sold. The capital works budget is screwed.

    There isn’t an election for nearly 3 years anyway. Even if they win in 2011, the Libs won’t have control of the upper house. It’s very questionable whether they’d get it through.

    The fact is that this is government is about the worst most incompetent government in history.

    That’s not correct. The Unsworth government was worse. In fact, Iemma is an improvement on Carr.

    The money will simply go into union devised rorts.

    Absolutely not, especially now. The unions and the government are at war. They’re not even on spitting terms, believe me. In economic terms, Costa is a born again libertarian.

    You’re in Victoria aren’t you? The Liberals were the ones to privatise electricity there. In NSW they’re the ones opposing it. It’s an utter disgrace and any Liberal supporter should be reconsidering his/her position.

  15. – Labor now won’t have as much cash to spend on the next state election,
    – Costa and Iemma might be demoted,
    – The ETS will have to be watered down or it will hurt NSW economically,
    – The unions won’t get the favourable working conditions mandated as part of the sale conditions,
    – Gas prices are to set for a big hike soon and Labor are sounding out the public to go nuclear,
    – The clock is ticking, Federal Labor have to get the ETS in with stamp duty on transactions before the public realise it’s not actually getting any hotter,

    I’m not surprised they blocked it, pure politics, but there you are.

    I would expect a Libertarian party to sell it all and deregulate on principle regardless, pointing out which taxes are being cut with the proceeds.

  16. David:

    It is not as though the money is going to be returned to the people. As far as I can see they are simply going to plough it back into crap like the railways etc. (which is also government run) and to plug the spending deficit. So they are doing the best they can not to cut spending.

    I simply prefer not to see these guys who get their hands on the money.

    I read about Costa morphing is a libertarian, but I ask why is with that party?

  17. JC – I don’t see the relevance of your last question. Why are you so particular about the party colours that are being flown if the job gets done. If the socialist alliance was privatising electricity then yippee. The more social democrats and socialists that start thinking and acting like libertarians the better. They can travel under the banner of new age communists as far as I’m concerned. I have never expected that many people would adopt the label of libertarian but who cares so long as they appropriate the ideas.

    And if Costa and Iemma spend part of the proceeds on railways then hopefully they will untangle the overlap between the existing Sydney lines and put them on a footing for individual line privatisation in the next decade.

  18. Terje:

    Do you understand that the money is going to be pissed against a drain? Does that worry you in the least?

    As I said your behaving like a spouse that allows a partner to sell the house to finance a gambling habit.

  19. agreed mark. That’s the real mcCoy of privatization. don’t sell it give it away to the state citizens in the form of stock.

  20. Do you understand that the money is going to be pissed against a drain? Does that worry you in the least?

    The best thing they could do with the money is to hand it back to the citizens of NSW (or perhaps the electricity users of NSW) via cash payments or a series of tax holidays. I suppose pissing it against a drain entails something different. In practice I suspect they will spend it on new road and rail infrastructure, neither of which worries me in the scheme of things.

  21. Well honestly terje, are you the privatization guru or something? Who gives a rats if it ‘worries’ you or not? These wankers need to cut their spending. Period.

  22. JC,

    You believe the liberals will not waste the money either?

    John Howard wasted money Federally like a decadent private schoolboy living off a trust.

  23. No, I think the liberals did waste money on stupid things but I think Iemma is worse.

    Iemma is looking to run a deficit during a time when we have experienced the longest expansion in history. They are simply no good and need to go. Meanwhile they need to be starved of cash.

    I would 110% welcome your idea of the privatization though by gifting it away.

  24. I think the liberals did waste money on stupid things but I think Iemma is worse.

    JC, you sound like a religious zealot on this. Facts don’t seem to be making any impression on you. Are you aiming for Liberal pre-selection or something?

    The proceeds of the sale of the electricity assets were intended for capital works: a new metro railway to the north-west suburbs, a new freeway linking the north and south of the city, etc. The private sector won’t build them, but they will build electricity generators if the government gets out of the way.

    The main pissing it away that goes on is the funding of police, nurses, other health workers etc. That’s a problem of over-manning and lack of efficiency, as the wages themselves are comparable to Victoria. It’s a national problem.

    And I repeat – in 2 years time Labor will still be in power. How the fuck will things be different? And if the Libs win in 2011, they won’t have control of the upper house anyway. So it’s now or never. Read the editorial in the Australian yesterday.

  25. JC,

    You asked if I was worried and I said “not really”. You then say “who gives a rats” if it worries me or not. Did you ask my opinion merely to throw it back in my face? Are you just trying to be rude?

    As for Iemma and deficits. I’m not going to defend every piece of Iemma expenditure. However there is nothing inheriently wrong with deficits. Lots of companies incure debt whilst making strong profits. Many people borrow whilst making good income. Deficits should be judged by what they are spent on rather than the economic climate in which they are incurred.

  26. I am religious zealot when it comes to this, David. Libertarians also need to watch the spending side of the government. I rate privatization as a big fat rotten zero here in oz since the time of Keating. The reason is that all major privatizations have basically funded further spending.

    So no I am not a big fan of privatizations in the way they have been conducted in the past and continue to be.

    Privatizations could have easily been done in such a way where the bulk of the population backed them. What should have happened is that the stock ought have been gifted to the citizens instead of the funds going to the government coffers.

    The way they have been conducted has only produced more government spending and bigger government. As I see it, longer term, privatizations have possibly been a net negative with public opinion mostly against when they would have supported them if the stock had been gifted..

    Look I want to starve the government of funds. The government has no business getting involved in the railways or energy production.
    I don’t trust these guys as I am very worried about what they would do with the money.

    Holding off does two things. It forces the bastards to think their spending priorities and may cause the Libs to rethink the way it ought to be handled such as gifting.

    I hope this clarifies my position.

  27. Terje:

    Please don’t give me a lesson on deficit spending. There is nothing inherently good about ANY part of Iemma’s deficits. It’s caused primarily by a huge spending increases in areas that support labor’s own constituencies and it’s recurring as well.

    Fuck the railways! Let Costa find another way of finding the money (to fund the trains) by firing large parts of the public service as he has now threatened to do if they can’t get the money from the sale.

    There is some good coming out of this. Costa is now threatening to fire staff. Good. Let them reduce the enormous head count they have created and then we talk about privatization.

  28. David:

    Please explain to me one thing. I presume you supported the sale of telstra, right? I did too at the time by the way.

    the government sold telstra and socked the cash away in the ” Future Fund”. Now please explain to me how that sale and the subsequent the movement of cash supports libertarian ideals because it doesn’t look that way to me at all.

    All i see is the government moving out of one area with a huge fee structure for the investment bankers etc. and the creation of an enormous slush fund they can use in the capital markets to either threaten, cajole the business world or help out their mates (which won’t be blatant).

    What have we seen of late supporting my argument?

    Rudd recently announced a 20% increase in the salaries of public servants. Now I am not saying the sale of Telstra helped fund that decision in a direct way but it did help seeing that the future fund is supposed assist the government in funding the public servants generous super entitlements. And a large rise like that has a ripple effect on super entitlements. Additionally the large surplus has the effect of making these pricks feel expansive compared to times when they’re struggling for cash.

    So I believe the libertarians position should be that privatizations should only be done through gifting and we shouldn’t support them otherwise. We’re better off in the end.

  29. Opposing privatisation unless it is done exactly the way we might prefer would make the socialists out there love us a lot more. Or maybe like us a little more. Or possibly hate us slighly less. Other than that modest gain it seems like a form of idealism that ensures no serious structural reform ever happens.

    I do agree that gifting shares would probably be more popular and more sound. I understand that when New Zealand privatised the electricity providers this was the approach taken.

  30. Have you totally missed he point Terje? The current method simply creates bigger government so what so great about that?

  31. The current method simply creates bigger government so what so great about that?

    That’s not true JC. Once the business is in private hands, the government shrinks, the business runs better and the economy benefits.

    Even if the proceeds from privatisation were stolen by politicians and public servants to pay for their mistresses and yachts, it would still be worth it. Russian is evidence of that.

    Think Qantas, CSL, TAA, Commonwealth Bank, OTC/Optus, Telstra. The proceeds could have been used to buy heroin for all I know or care.

    If you don’t believe governments should be running businesses, there is no such thing as the right time. As soon as possible is the only time.

  32. David:

    Privatization in this country is a dirty word with the public because they see for what it is: a cute way for the government to raise cash and continue along they way it has been.

    That’s what i am saying. You can’t just look at the sale without looking at what’s happening to the cash.

    Don’t get me wrong as I said earlier if it were up to me I would sell the government toilets.

    The bastards should never be allowed to get their hands on the cash.

  33. Yes Mark, But I’m not saying it shouldn’t be sold.

    Sure the money is used once however it usually ratchets up the recurring cost of government.

  34. You need to explain to me why a Future Fund is better than holding the government holding Telstra stock.

    Because the Future Fund is one of many equity shareholders and has an independent board. It can only buy or sell shares and moan. When the government owned Telstra, it could (and did) direct it.

    The good thing about the Future Fund is that it knows what it’s there for – to fund Commonwealth superannuation obligations. No “corporate social responsibility” or “ethical investing” garbage.

    The bad thing is that it exists at all. I’d prefer Commonwealth superannuation was entirely privatised. I look forward to the day when the Future Fund is privatised, and I won’t give a fuck whether it’s the Liberals or Labor running the show. And I certainly won’t oppose it just because I think they’ll piss the money away.

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