Thursday, December 23, 2010

NSW Suspends Democracy

The NSW Premier, Kristina Keneally, has effectively sidestepped democracy. The NSW Governor, Marie Bashir, has prorogued (suspended) Parliament at the Premier’s request. It was not scheduled to be prorogued till late February. Writs for the election are scheduled for about the 4th March, 2011. The NSW Parliament will not now sit until April 2011, after the election. However, because the government is not in caretaker mode , the Premier is still free to make major policy announcements.

The move means that any meetings and deliberations by a Legislative Council inquiry, from today, are unlikely to be recognised. The inquiry was to examine the sale, the involvement of individuals and possibly the legality/ethics of the sale. By suspending Parliament two months early, Premier Keneally and others hope to avoid official public and Parliamentary scrutiny of their actions.

The last few months have seen the NSW Government, led by Treasurer Eric Roozendaal, move to sell NSW taxpayer electricity assets.

Following are some of the facts that are known:
  • Treasurer Eric Roozendaal, and some Treasury officials, are known to ”treasure” the state’s AAA credit rating, and have been reluctant to invest in electricity infrastructure for many years.
  • NSW Treasury expects to gain more than $5 Billion form the sale of taxpayer-owned assets.
  • The transactions are expected to take over 2 years.
  • 11 board members of Eraring and Delta Electricity resigned, believing the sales of their trading rights were not in the interests of the NSW state-owned companies.
  • NSW Treasurer Roozendaal replaced the 11 board members at night with political yes-men.
  • Tony Maher, who resigned from the Board of Eraring on 14-December has described the sale as “a mad dash for cash”.
  • The NSW Government is creating privately-owned companies that will form an oligopoly of electricity suppliers.
  • Origin energy gains Country Energy and Integral Energy (retail suppliers) and the output from Eraring (power generation)
  • TRUenergy, a Hong Kong company, gets EnergyAustralia, and the output from Delta West and some smaller generators
  • Elizabeth Knight, writing for the Sydney Morning Herald on 16-Dec, wrote that “the purchase of the long-term supply contracts with gentraders Eraring (acquired by Origin) and Delta Electricity (bought by TRUenergy) went for bargain-basement prices”
  • The Sydney Morning Herald reported, 16-Dec-2010, “A UBS analyst, David Leitch, said: "NSW households are in for higher electricity tariffs and more people at their front door, trying to get them to change electricity supplier." Note: he said more people, not more suppliers.
Speaking to the ABC about the 11 directors who resigned, Roozendaal said “They were not looking at the public policy objectives of the government. They were not looking at the benefits to the taxpayers; they were looking narrowly at what they believed was interpreting the responsibilities for their organisations." But aren’t company directors supposed to act in the interests of the company, and shareholders?
ASIC sets out the duties of directors thus:
  1. be honest and careful in your dealings at all times
  2. know what your company is doing
  3. take extra care if your company is operating a business because you may be handling other people’s money
  4. make sure that your company can pay its debts on time
  5. see that your company keeps proper financial records
  6. act in the company’s best interests, even if this may not be in your own interests, and even though you may have set up the company just for personal or taxation reasons, and
  7. use any information you get through your position properly and in the best interests of the company.
Given the above, especially point 6, there might well be serious questions asked of the directors so hastily appointed by Eric Roozendaal, whose only task, it seems, was to act in the political interests of the Treasurer, and Treasury.

The Legislative Council inquiry, so swiftly sidestepped by Premier Keneally, might well be the public inquiry we need to have.