Barnett starts the privatisation of WA electricity system

Tuesday 24 Mar 2015

The Barnett Government has commenced the privatisation of Western Australia’s electricity system, with the announcement that private companies will be able to retail electricity to consumers.

The Australian Services Union (ASU) and Electrical Trades Union (ETU) joined forces in 2014 to campaign against the privatisation of WA’s electricity network. The two unions believe that privatisation will lead to higher prices, poorer quality services, increased bushfire risk and fewer jobs and apprenticeships.

ETU WA Branch Secretary Les McLaughlan said it was a myth perpetuated by governments that privatisation resulted in lower power prices.

“An examination of the 2013 Residential Electricity Price Trends final report, which was commissioned by the Australian Energy Market Commission, shows that the price of electricity in WA is the lowest of all Australian states,” he said.

“The report also reveals that, the greater the level of private ownership within a state system, the higher the price of electricity.

“In the partially privatised systems of Queensland and New South Wales, the average charge was 25.8 cents and 25.7 cents per kilowatt-hour, respectively. In the almost fully privatised systems of Victoria and South Australia, the average charge was 27.1 cents and 29.6 cents per kilowatt-hour, respectively.

“The Barnett Government says the current charge for electricity in WA is 30 per cent lower than the level it would need to be to cover the cost of producing and distributing electricity.

“Given private companies have to make a profit, you can expect power prices to go up by at least 30 per cent, probably more, as WA’s electricity system is progressively privatised.”

ASU WA Branch Secretary Wayne Wood said allowing private companies to sell electricity to retail customers would represent privatisation by stealth.

“We have been saying for months that the State Government intended to privatise Western Australia’s electricity network in an effort to pay down the massive debt it has accrued since coming to office,” Mr Wood said.

“Having seen what happened to former Queensland Premier Campbell Newman when he proposed to privatise Queensland’s electricity network, it is not a surprise that the Barnett Government has kicked off its privatisation program using an alternative strategy.

“Allowing private companies to retail electricity will see quality jobs lost at Synergy, as private companies take market share.  These call centre, administrative and technical jobs will effectively be transferred to places like India, as the new private retailers seek to maximise profits.

“With the mining boom winding down, you would think the last thing the Barnett Government should be doing is pursuing outcomes that see WA public sector jobs lost to overseas.

“There is also a major question about jobs at Synergy’s power stations, with likely closures as Synergy loses market share to the new private retailers.”

Mr McLaughlan also pointed to the Barnett Government’s transferring of network regulatory powers to an eastern states regulator as further evidence of the government’s privatisation plans.

“WA’s electricity system is currently well regulated by the Independent Market Operator, and the only reason we can see for transferring regulatory powers is if the State Government wishes to align the network with a regulator that is experienced in managing privatised systems.

“There is no doubt in my mind that Colin Barnett intends to fully privatise our publicly owned electricity system if he is re-elected in 2017.”