Nick Champion (Wakefield, Australian Labor Party) Share this | Hansard source

I was somewhat shocked to hear the member for Deakin say the word—not using the words 'asset recycling'. It slipped out; he could not help it; he could not keep it contained. The word 'privatisation' slipped into Hansard. He wandered off the focus-group tested 'asset recycling', the Orwellian attempt by the Liberal Party's spinmeisters. They thought privatisation sounded bad: 'We'll call it asset recycling.' So we get this Orwellian bill. It does not have one dollar extra in infrastructure. All it does is link what was already in the budget in infrastructure spending—under Labor—to a privatisation scheme.

Of course, Labor is not against the selective privatisation of some assets. Indeed, in the Hawke-Keating years there were some privatisations—Qantas and the federal airports come to mind. We have always taken a selective view, a public interest view, a public good view, of this issue. The problem with those opposite is that they always approach privatisation as a matter of ideology.

Labor's two proposed amendments to this bill are, firstly, to allow Infrastructure Australia assessment of new infrastructure as productivity-enhancing projects, and that includes a published cost-benefit analysis; and, secondly, the tabling of a disallowable instrument for each privatisation and reinvestment transaction. That is for very good reason, because there are sensible privatisations and then there are what the Liberal Party do, which are ideological privatisations.

We see an inability of the language in this bill—and indeed in the language used by this government—to just be honest and talk straight with the Australian people. It is one of their government's problems in terms of the co-payment. We saw the member for Hume getting in a bit of strife today. It is one of the Prime Minister's problems. It is the reason he now has to write to pensioners across the country, presumably to right some wrongs, to fix up some communication issues. This bill is about the encouragement of states to privatise their assets willy-nilly. There is a 15 per cent reward. There is a smaller contribution than states normally put into infrastructure, which is normally either 50 per cent or 80 per cent. The government is putting in a small reward so that some state governments go on a privatisation frenzy—not in the public interest, not selectively looking at assets in the public interest, but simply selling things off willy-nilly.

We know what Liberal state governments do when they get any sort of encouragement in this area. I can tell you what happened in South Australia. In the nineties we saw the Olsen government sell many assets that the state had, willy-nilly. They sold the state TAB for $50 million. That sounds like a good outcome, except that it earned $50 million a year. They sold it to the Queensland TAB. Apparently there is some risk involved in gambling revenue, so they got that one off their books. That privatisation continues to plague the racing industry in my state to this day. To this day it is regretted. It was a foolish privatisation. It was a privatisation which was in no way in the interests of the taxpayers of the state of South Australia. When the ideological test is applied, we get some pretty bad outcomes.

The Olsen government also leased our electricity assets. This was not just unpopular; it also did not live up to the expectations. An article by Tory Shepherd in The Advertiser on 21 February this year carried the headline, 'ETSA sale cost South Australia $2b as prices soar, says damning report on privatisation'. That report was by Professor Quiggin, who is quoted as saying, 'South Australia is really Exhibit A in privatisation leading to higher prices.'

I would just warn those opposite that it is all very well to be a cheer squad for these sorts of privatisations, but I can assure them that often the rhetoric catches up with you when reality hits. There are other reports, such as one by Dr Phillip Toner from the University of Sydney in 2012, in which he noted, 'South Australia, which has a fully privatised electricity industry, has the highest prices of all states.' He also noted, 'New South Wales electricity prices increased largely due to a massive increase in capital expenditure from the mid-2000s.'

It is an interesting point about New South Wales power prices. We know that power prices are a big issue for the public—a very big issue indeed. I would not blame any person across the country for being worried about electricity prices. But most of this is about privatisation or, in the case of state owned assets, in the preparation for their eventual privatisation. In John Quiggin's report Privatisation of Queensland electricity assets: A preliminaryevaluation, he notes:

In South Australia, privatisation was advocated in the 1990s on the basis that it was necessary for participation in the National Electricity Market. Far from reducing prices, the result was to raise them to the highest levels in Australia.

This was due in part to massively increased distribution charges. As the SA Essential Services Minister, Lew Owens noted in an interview with ABC Stateline (2003):

The simple explanation for that is in addition to the wholesale energy price you have to add the network charges for the poles and wire businesses.

They are dearer in SA because the assets were revalued back in 1996 prior to privatisation and locked in by legislation.

That is a very important observation by Lew Owens, who was the Energy Regulator in South Australia. In the run-up to the privatisation of electricity assets, state governments typically fatten the pig before market today. They do that by gold-plating the infrastructure and by raising the prices that consumers pay. That is how South Australia ended up not just with the highest prices in Australia but, as was reported on 21 March 2012 in The Advertiser, 'South Australia's power prices set to become the highest in the world says Energy Users Association of Australia'.

Dr Jensen interjecting—

We hear the member opposite interjecting. They had a pretty fair go in terms of those power prices at the time. They were out there every day beating up on the straw man that was the carbon price, but of course the main culprit in those price rises was network charges; it was the cost of poles and wires being passed on to consumers. That is a direct result of the privatisation of what was a natural monopoly—the poles and wires. This is noted in a more recent report of February 2014, and in another one by Dr John Quiggin, Electricity privatisation in Australia: A record of failure. He notes on page 12:

In some cases, governments have sought to increase the sale price of assets by raising costs to consumers in the lead up to privatisation, or by allowing price increases after privatisation.

You cannot blame the entities that buy these assets for trying to gouge what are natural monopolies. Those opposite come into this chamber and talk about asset recycling; what they really mean is privatisation. They put in place a bill that has not one extra dollar for infrastructure and yet they claim the infrastructure is a result of the privatisation. Then they make all sorts of claims about how these things will benefit taxpayers and consumers, who are one and the same. I can tell you that we have heard these tales before in the South Australian context. We have seen dramatic and detrimental effects on taxpayers and consumers. That is why you cannot be too much of a cheer squad for privatisation; why you cannot be too much of an ideological advocate for privatisation. You have to apply rational thinking to it rather than just charging down a particular path. You have to be selective, when you are dealing with state governments, about what you will reward and what you will not reward. That is the reason for Labor's amendments.

This is an infrastructure con in so many ways. We hear the Prime Minister and others talking about him being the 'Infrastructure Prime Minister'. If you look at my electorate, that is almost certainly not the case. The electrification of the Gawler to Adelaide rail line is a very important project for moving into town commuters who live in the outer suburbs of Adelaide or in the town of Gawler, which is a large regional centre, and many people come in from the Barossa Valley and further up the track, such as wheat belt towns like Mallala and Kapunda, where I grew up. The rail project would be efficient and sensible. It would help people, would take cars off the road rather than putting cars on the road and would give people a far better commute. I lived in Gawler some years ago, and I drove to town every day. I can tell you it is not a pleasant commute; you spend a lot of time in the car. It is much more pleasant to go along on a train where you can read, relax and have a bit of time out and not focus on the traffic. That project was cancelled by the Abbott government. They do not want anything to do with public transport no matter how much sense it makes. That is a blow not just to my state but to jobs in my state and to the northern suburbs of Adelaide, which has been the victim of so many of this government's decisions, especially in terms of the automotive industry. We see the impacts of the Treasurer chasing Holden out of the country—something I talked to the House about once before. Now we see the impact of them cancelling important economic infrastructure for the state of South Australia—

Mr Pasin interjecting—

The member for Barker visited the Barossa Valley recently he cannot work out that the very people who live there use the trains in Gawler. He comes in here and he yells and barks and bleats, but his government—the government he is a part of—has cancelled this important project. I am reliably informed he has told his Liberal Party preselectors that he is going to be a minister within two terms. That is what he has claimed to the good preselectors of Barker. I hope that he fulfils that—perhaps he can knock off the member for Mayo and put this project back on track. He will be a hero to South Australia but, if he cannot, I hope his preselectors come after him. I cannot imagine a more joyous thing to do.

To conclude, this bill is in so many ways a complete con. It does not put an extra dollar into infrastructure. It does not put one single extra bit of tar or roadway down that would not have otherwise been put down. It takes the word 'privatisation' and then substitutes it with 'asset recycling', an Orwellian term that is designed by a Liberal Party focus group. This bill hides the fact that in so many areas this government has turned the clock back, particularly in public infrastructure and particularly in my electorate and in South Australia. Like so many things that this government does, it is a complete and utter sham. Only Labor's amendments can make this bill any better.

See this speech in context