Poles and Wires - Hansard

I speak against the Electricity Network Assets (Authorised Transactions) Bill 2015 and its cognate bill, the Electricity Retained Interest Corporations Bill 2015. I do so having been recently elected as the member for Charlestown on a policy of retaining the electricity networks in government hands. The Hunter knows all too well the importance of a reliable and dependable electricity network. A little over a month ago the most destructive storms to ever hit the Hunter region knocked out the electricity network and plunged every second household into darkness. Some people had their power restored after a day but many were left waiting for more than a week to be reconnected—a week without refrigeration, a week without heating and a week without being able to cook. Having endured these prolonged periods without power, the people of the Hunter do not take their electricity network for granted.

In the days following the Hunter's destructive storms, 225,000 Ausgrid connections were without power. Ausgrid received 250,000 calls to its contact centres and logged over 11,000 reports of hazards such as fallen powerlines. One Hunter resident, former police superintendent Rick Kane, shared his story of coping without power. Rick was a Hunter police chief in the 1990s and was on duty during similar large storms in that time. The frustrations many people felt were reflected by Mr Kane when he said, "I think this is absolutely"—and I will not use the actual word in this place so I will use "codswallop"—"I'm used to disasters and I cannot believe it would hit last Tuesday and we still find ourselves without power or hot water."

Since the storms there has been a considerable amount of talk in the community about the impact of the changes such as those proposed by this bill on safety and amenity in times of emergency. While there has been some frustration that it took many days to restore power to some areas, as Mr Kane said, there is also concern about how we would have fared under a privatised system. In a complete understatement, even the Premier has been forced to concede that a privatised system would have been no faster in responding to this natural disaster.

The people of the Hunter do not trust that a private provider will maintain the poles and wires as well as Ausgrid currently does. The lack of maintenance by private owners was identified by the 2009 Victorian Royal Commission into the Black Saturday bushfires as contributing to the ignition of a number of fires which resulted in significant loss of life and property.

We need only look at the Victorian electricity network sell-off to see that this bill is bad news for New South Wales. Following the sale of Victoria's transmission network, complaints to the regulator rose almost 1,000 per cent. After adjusting for population differences, Victoria's complaint rate is 250 per cent of New South Wales' rate. Many of the Victorian complaints were about poor maintenance of a system, which is why there was a 32 per cent increase in blackouts following privatisation. A private operator wants to make a profit and one easy way to cut the bottom line and maximise profit is to do less maintenance. It requires no stretch of the imagination to see that this could happen with a privatised distribution network.

A McKell Institute report on the effect of privatisation of the distribution networks in other jurisdictions found that "Publicly owned transition and distribution networks appear more willing to engage in long-term planning when undertaking capital expenditure". The report also identified that "Privately owned networks have experienced significantly faster growth in "overheads" over the past eight years".

The people of the Hunter also do not have confidence that a private network operator would respond as quickly in emergencies, such as the destructive storms we recently experienced. I have spoken before in this place about the dedication of Ausgrid crews from across the State who came in to assist in restoring power to the Hunter. These crews worked long hours and were housed away from home for weeks until the job was done. Would a private operator have been willing to wear the cost of sending employees across the State to restore power to one section of the network? Would a private operator wear the cost of accommodation, food and overtime for the crews needed to get the job done?

The views of people in the Hunter match those of people across the State. A recent poll said that 80 per cent of people in New South Wales believed that the electricity network should be owned by the public and operated by the Government to benefit the community. The people of the Hunter rejected this Government's proposals at the March election, but it is the Hunter's network that will be sold off.

National Party members opposite knew that this was a bad plan and they were willing to protect their communities from it, while letting regional areas in the Hunter face a sell-off. National Party members knew it was a bad idea because they looked at the facts. These State-owned corporations currently return $1.7 billion a year to the New South Wales Government. This Government cannot claim serious economic credentials while it has no plan to replace that revenue. This lost revenue could fund 21,000 nurses, teachers or firefighters, or pay for 7,000 hospital beds to be open, but this Government has no plan to fix the ongoing income black hole in its budget caused by this sale.

Even the National Party members know this is a dud deal and they know that it is regional schools and regional hospitals that feel the pressure first when budgets get tight. They did a deal with the Liberal Party to protect their regional network—Essential Energy—while selling off everyone else's network—the ultimate in nimbyism.

Even the alleged benefits do not stack up. The Government has said it expects the sale of the grid to generate $20 billion, or around 12 years worth of the income it would receive from the grid, but of this $20 billion figure, $5 billion is expected to come from banking the proceeds of the sale and hoping they can get an interest rate that can turn $15 billion into $20 billion. I am sure most self-funded retirees would love to earn this kind of interest rate on their investments. Maybe those self-funded retirees might like to give the Government some advice on realistic investment.

We are in an era of immense change in the energy market. The Hunter region has long been at the forefront of energy production in this State and during this period of transition we are seeing the Hunter's role in energy production expanding. The Hunter is becoming a leader in clean energy production. Our region has been, and continues to be, incredibly innovative in energy production through the use of solar and wind energies. We in the Hunter and in this State need a transmission and distribution network that is flexible in this changing environment, not one that is motivated solely by profit.

In the past four years this Government has sold off $5 billion worth of New South Wales' public assets including ports, power stations, the desalination plant, Sydney Ferries, countless public buildings and public land. The pro-privatisation ideology of this Government is plain. This ideology and desire for a short-term, limited-life cash grab is being put before the long-term wellbeing of this State. There is simply no way that the sale of the electricity network is good for the people of my electorate of Charlestown, the Hunter region or the people of New South Wales. This is a dud, secretive bill which just does not stack up.