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sydney alternative media - non-profit community independent trustworthy
Monday, 17 March 2008
Gittins damns Iemma's Costanomics with faint praise for public energy asset sale plan
Mood:  down
Topic: nsw govt
Late last Friday we took the cudgels to carpet bagger Jeff Angel for doing the ALP Right's bidding on the energy sale plan. 
Now we notice the great and good Ross Gittins, Herald economics editor has a significant article today in the Herald trying his best to push a credible Fairfax line on this dodgy plan of privatisation of some $15B in public assets. He argues the plan is economically sound but really his article is damning for its faint praise:
with Gittins conceding that economists Nicholas Gruen and Prof John Quiggin have blown the NSW govt economic arguments on AAA rating and investment out of the water. He might also have mentioned academic accounting professor Bob Walker

Then Gittins tries some other angles which don't really work like claiming his superior sense of the political economic landscape.
We are no economist but even we can see from our avid reading of the mainstream press on this issue that:

- Though Gittins argues the power assets are not a natural monopoly 'because the govt is keeping the distribution (poles and wires) network' (which is a natural monopoly) but this is disingenuous - the poles and wires are the high maintenance cost element, low return. That's why industry doesn't want to buy these. But you need the profitable retailers and generators revenue to cover the maintenance (and future investment) in distribution. So it's socialise the cost of part, privatise the profit of the other. It's sleazy disaggregation.

- then Mr G argues we have 'a national market for energy generation/competition', so the NSW sector doesn't need to be govt anymore, govt should stick to core govt business and let industry do it's thing. But this ignores the fact we do need govt control to restructure the industry for environmental purposes given climate change imperatives. Leaving it to a competitive market which itself has failed to address dangerous climate is suicidal. It would be like leaving the market to fight WW2 and sort out totalitarian Nazism, or Stalinism: Dangerous climate is just as much an existential threat to Australia as those with 100s of millions of refugees likely on the move this next 20 years. And corporations are quite fascist selfish driven ideologies themselves to be wary of. No, govt must be in this industry sector big time, as JK Galbraith showed controlling business in US in WW2. Gittins is still talking 20C mindset pre ecological limits to the market.

- Gittins reveals a systemic bias to bad infrastructure projects referred to as "opportunity costs" by saying we need the money from the sale - Iemma has promised a $5B truck tunnel for expanded Port Botany under Sydney - great gravy for ALP developer mates. But Gittins omits to mention this 'political economic' motive. The income of the sale won't even be hypothecated into renewable energy infrastructure which is what orthodox good governance would normally demand. Curious omission of that principle by Mr G too.

- Then the big G leaves right till last his concern over 'the public sector union control over the govt' as the "most important" reason for a sale to cut their ties as "one of the great obstacles to greater efficiency at state level". Only it's the union movement that has embraced dangerous climate change as a reality threatening their members and society (just like asbestos, just like Work Choices) as a whole while market economists have continued to promote an 'in denial' growth fetish. And big business generally have an enclave approach to dangerous climate of winners (survivors) and losers (drowned, cooked, dead from thirst). On the contrary we will need the social capital of the union movement alot more than the money/profit motive to effectively restructure the economy to clean safe energy and reach that safe shore as a civilisation.

You mark my words.
Meanwhile another chip at esteemed Jeff Angel's threadbare capacity to represent the green movement has arrived thus:
Sent: Sunday, March 16, 2008 1:00 PM
Subject: [chipstop] Where is TEC on forests?

Hi chipstoppers
You may recall that a number of green groups made a submission to the Unsworth Committee asking that a condition of sale of NSW electricity retailers, if it goes ahead, should be that biomass from native forest be excluded. On NSW Stateline on Friday night, Jeff Angel  of the Total Environment Centre set out his (+Harry Herbert's) conditions for agreeing to the sale of the electricity retailers (as members of the Unsworth committee). All very worthy, but no mention of native forest biomass. 

Transcript extract:
In a letter faxed to Premier on Wednesday and released exclusively to Stateline, the Reverend Harry Herbert and Jeff Angel insist their support was predicated on the implementation of Unsworth recommendations which could lead to:

* no new coal fired power stations to be commissioned in NSW
* off-peak electric hot water systems to be phased out, dramatically reducing current baseload demand
* laws to enable householders to feed-in rooftop solar power to the State grid
* inefficient coal fired stations to be closed down as soon as practicable

In return for their signatures on the Unsworth/ALP approval certificate, the two independent delegates are demanding that Morris Iemma and the New South Wales Labor Government must turn green.

Posted by editor at 1:23 PM NZT
Updated: Monday, 17 March 2008 2:56 PM NZT

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