Last night I had the honour of being invited by Gosford City Councillor Vicki Scott to speak in support of her motion to reject the privitisation of the Poles & Wires infrastructure in NSW and in particular Gosford city. I am glad to tell you that Vickis motion was upheld! Well done Vicki! Here is what I told council... Certainty V Uncertainty... When faced with the choice of committing to a project or not committing to it, as part of my decision process, I will always look at the Certainties V the Uncertainties. As I see it the Certainties are as follows. It is certain that the infrastructure that is the “poles & wires” in NSW have been targeted with massive investment over the past few years. The phrase “Gold Plating” would be familiar to all here tonight. So the projected expenses attributable to this infrastructure should be minimal and the service should be reliable, owning the Poles and Wires also gives a certain guarantee that services will be as continuous as possible. The 2013 financial return from the Electricity Network [on the figures from Essential Energy, Ausgrid, Endeavour Energy and TransGrid] is in the order of $3billion. The State owned Electricity Network Businesses carry in total around $18.5 Billion in debt. The Uncertainties: The federal governments “infrastructure recycling program” is yet to pass through both houses and therefore is not guaranteed to go ahead. This possibly reduces funds available for expenditure on infrastructure. The Government says they will clear $20 bil in proceeds from the sale but this is impossible, I refer you to an article in the SMH smh.au/comment/nsw-electricity-privatision-is-a-question-of-why-not-how-20140619-zsdd5.html dated June 23, 2014 by the emeritus professor of accounting at Uni of Syd, Dr Bob Walker and his collaborator Dr Betty Con Walker an economist and former Treasury official. QUOTE: From “NSW electricity privatision is a question of why, not how” “It is claimed that the sell-off will liberate $20 billion to invest in new infrastructure. But the numbers just don’t add up. The $20 billion is supposedly made up of • a net $13 billion proceeds, • plus $2 billion from the federal government under the asset sales incentive program, • and $5 billion in interest earned from investing the sale proceeds over 10 years. • There are issues with all three components, including the $5 billion interest over 10 years when the funds are to be invested by 2019 to secure the federal funds – more like over two years. • This alone would leave the claimed $20 billion bucket of money short by about $4 billion. In any case, wouldn’t it be better to use the money to retire short-term borrowings as more expensive forms of debt fall due? Yet a full bucket of $20 billion would not pay for all the promised new projects, even accepting current cost estimates (which are probably conservative). The Baird government claims that the proceeds would be invested in public transport, roads, water, hospitals, schools and other projects that improve services, increase opportunity and grow the economy. Nice sounding words. The list comprises • A second Syd Harbour tunnel for rail and linking networks, $10 billion; • Regional Roads Fund, $6 billion; • Regional Water Fund, $1 billion; • Schools and Hospitals Building Fund, $2 billion; • Sports and Cultural Fund, at least $500 million. Add in proposed arterial roads across Sydney, estimated by commentators at $10 billion (a figure not yet denied) and all that totals $29.5 billion – or more than double the expected net sale proceeds.” END QUOTE… So, really no infrastructure for the Central Coast and the infrastructure that has been promised is more than $20b. Unreliable service? When the grid was privatized in Victoria in the mid 1990’s customer complaints where at around 5,000 per annum, they now stand at 56,000 per annum. Jobs we have 181 people employed by Ausgrid in the City of Gosford and a further 216 for a total of 397 Central Coast jobs will be at risk. Time prohibits me from outlining all the reasons why this policy is poor policy, but if Gosford City Council was to do anything other than reject the sale of this asset of the people then it would be negligent in its duty to its ratepayers.
Posted on: Wed, 25 Jun 2014 01:42:51 +0000
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