BOTH major parties have had a hand in electricity privatisation in NSW over the past decade, with a nice pot of money when assets are sold but the loss of an on-going stream of funds in terms of dividends.
At a meeting in Newcastle in 2008 it was then Labor MP for Cessnock Kerry Hickey who criticised his own government for the first round of electricity privatisation.
Read the full report: NSW Government drains extra $100m from Hunter Water
“If you get $15 billion for selling assets, and we lose $24 billion over a 20-year period from lost dividends, then it's a furphy to say we make money on the deal,” Mr Hickey said.
He was followed by the late Greens MP John Kaye, a former university energy lecturer and strong critic of electricity privatisation who said it would cost the state $1 billion per year in lost dividends.
Years later it was the Liberal Party’s turn, when the then Premier Mike Baird championed privatisation of the “poles and wires” rump of the electricity system. There was a pot of money, but more dividend losses.
Labor was quick to blame electricity privatisation this week as a factor in the NSW Government’s quiet attempts to take an additional $100 million from Hunter Water in the form of a dividend. This is despite the government already claiming 70 per cent of after tax profits in 2018-19, adding up to just $44 million.
Huge blowouts in the cost of major Sydney infrastructure projects are also blamed as a reason why the government might be looking around for ready cash – and a government-owned corporation able to take on a little extra debt to help the government’s bottom line.
NSW Treasurer Dominic Perrottet responded to questions about the second government attempt to raid Hunter Water in a year by noting that “dividends from state-owned corporations contribute to the funding of critical services across NSW including health, education, law enforcement and public transport and roads”.
He also insisted there would be “no impact on prices, on services or upon capital investment in Hunter Water from changes to its capital structure”.
But the way the additional $100 million dividend has been handled does not inspire confidence. For an organisation that prides itself on communicating with the community, Hunter Water does not have the Statement of Corporate Intent confirming the dividend plan on its website. The document was “made public” by quietly tabling it in NSW Parliament in late November.
There has always been public suspicion of governments that push the privatisation barrow too loudly, because the benefits often don’t match the claims made.
The NSW Government can argue there will be no impact on prices from the extra dividend, which might be true in the short term, but if you take $100 million out of a corporation that doesn’t have it, the community pays the price in the end.