Friday, January 04, 2008

Costa Spins Electricty Sale

I have previously expressed an opinion about the sale of electricity assets and business by the NSW Government.

Yesterday, Treasurer Micheal Costa continued his and Premier Iemma's media campaign to justify the political decision. An article appeared in the Sydney Morning Herald, and can be viewed here. An analysis of his comments is below.

The statements and arguments he makes reek simply of politics, and there are significant questions that need to be asked of him.

He states that “Professor Tony Owen said … it would cost the Government $15 billion to build … new baseload generators, maintain the … electricity business and (upgrade) existing power stations”. What he didn’t say is that his proposal will shift these costs to the private sector, which will (ultimately) recoup them from higher prices to us consumers.

He further uses emotional blackmail to argue that the $15 billion would mean a reduction in health, education or police spending. His argument is: ‘Do you want electricity, or hospitals?’ – an argument that is not valid. He doesn’t say that it is perfectly responsible for governments to borrow to build long-term infrastructure that lasts for generations. Indeed, there is a strong argument that future generations should contribute to the cost of infrastructure from which they benefit. That occurs when governments borrow to invest in infrastructure. In this respect, Mr Costa has been disingenuous towards the people of NSW.

Mr Costa asserts that spending on this infrastructure would lead to the “loss of our triple-A credit rating”, but presents no evidence that this would be so. Further, is the objective of the NSW Treasurer to responsibly fund services for the people of NSW, or is it to preserve a credit rating. Every non-politician in NSW would argue that Governments exist to provide services to the people.

Mr Costa’s argument that the drought is responsible for price rises of up to 17% in Victoria are only a half-truth. Certainly the Victorian Government has said that “the drought has limited hydro-electricity production, driving up energy costs.” (ABC ) Neither that statement, nor Mr Costa’s, provide evidence that the costs justify a 17% increase. The drought has limited power from hydro-electricity stations, so there is less electricity in the grid. The price rises could be partly due to profiting from demand for reduced supply.

Mr Costa tells us that the Government is “guaranteeing the job of every worker in their present locations” – he did NOT add the “but only for 3 years” part. Again, he has told us a half-truth.

He later launches into an attack on opponents with “the xenophobic undercurrent of claims of a foreign takeover”. This is typical political strategy:- if you don’t like the message, shoot the messenger.

In short, Mr Costa’s article contains omissions, half-truths, ill-directed political objectives and “shoot the messenger” arguments. That is, it is full of political spin.

The people of NSW don't need, or want, that. They want politicians who will act in the best interests of the people of NSW.