Electricity Privatisation

The Science Party, known as the Future Party during the 2015 NSW election, endorsed the following policy:

For those people who have read the Future Party's Federal Policy platform, it is not a surprise that the Future Party stands opposed to the electricity privatisation proposed by the Liberal Party. Our policy (6.3) reads "The Future Party stands opposed to corporate monopolies, particularly government created or endorsed monopolies acting as private entities. Where government monopolies are privatised, sufficient provisions should be enacted to allow competition in that sector."

The proposal to privatise the electricity network will create a private monopoly over transmission of electricity in public space. If the company decides to charge excessive amounts of money for substandard service, there will be no other way to get the electricity to your home. This is a scary proposition. Electricity is fundamental to modern life. It is not an optional product, but with no other option to receive electricity, we will be forced to pay whatever the company asks of us. In addition to this, the assets transferred to this company (in particular poles) are still extremely important for the telecommunication industry, and hence this privatisation could see a limitation of services provided and an increase in the costs of those services. 

The argument that the company will be half government-owned and hence will not greatly increase prices ignores the responsibility of directors of a company. In particular, it is the legal responsibility of the directors of a company to maximise shareholder return within the bounds of the law. Failure to do so may see the directors sued by the shareholders, irrespective of who owns the majority of shares. 

If the electricity network is privatised, we can expect to see a company that, like any other company, tries to maximise its earnings. The difference in this case is it won't have any competitors to keep it in line. 

We aren't wholesale against the government privatising assets, especially where there are private competitors that can provide a similar service. We believe electricity generation can be privatised, because consumers can choose which generator provides them with electricity. In the case of electricity transmission, however, the state should maintain ownership until competition for transmission (particularly to individual residences) can be assured. 

"High Voltage Lines in Washington State" by JGkatz|Jeffrey G. Katz

Licensed under CC BY-SA 3.0 via Wikimedia Commons