Government Enterprises Privatisation
GOVERNMENT ENTERPRISES PRIVATISATION
Matter of Public Importance
Mr ROGAN (East Hills) [3.54]: I move:
There is no doubt that this Government has as its secret agenda the privatisation of significant State Government trading enterprises. Whilst the Government will equivocate, in none of its public responses has it unequivocally ruled out privatisation. I will elaborate on some of these points shortly. The community of New South Wales, which is overwhelmingly in support of the retention of core government businesses, such as electricity, water, health, and transport, will react with horror at the revelations contained in the Cabinet documents referred to during question time today and by the Treasurer in response to a question in this House on Tuesday.
Equally, there is concern among public sector employees, who have given dedicated, conscientious, loyal and efficient service and whose future is in grave doubt as a result of the Government's proposals for privatisation and contracting out of public services that are currently carried out by State Government employees. The Government has this secret agenda because it knows that if at this stage it disclosed its full privatisation and contracting out plans it would invite a very harsh public censure, and indeed disaster at the ballot box. I want to examine some of the public statements on this issue made by Ministers. The first is the Treasurer's reply to a question directed to him on 12th October, to which I have just referred. The Treasurer's reply is clear and I will quote him:
That this House notes as a matter of public importance the serious implications for the New South Wales community and the public sector of plans by the New South Wales Government to privatise government enterprises and contract out government services.
Of course, the Government, not the community, will be the one to say whether it is in the best interests of the community. Clearly, it is laying the ground work for privatisation. The Treasurer also said in his answer on Tuesday:
This Government's privatisation policy is plain and open. It will privatise an asset when it is in the best interests of the community.
I have been around this place for a while and I know that government departments do not prepare these sorts of options and very detailed types of papers unless they have been given to believe - indeed, given a direction by the Government - that privatisation on a scale outlined in those Cabinet documents, which have been released by the Opposition today, is clearly on the agenda.
I have endeavoured in respect of the electricity sector and the power sector to get an unequivocal commitment from the Minister that the privatisation of Pacific Power is simply not on. Indeed, only yesterday in reply to a question on notice, "Does the Government intend to sell Pacific Power?" the Minister for Energy and Minister for Local Government and Co-operatives said, "The answer is the Government currently has no plans to sell Pacific Power".
Again, there is the qualification. Honourable members all know that "currently" means in this term of the Parliament, and during the term of this Government. It cannot come out and say it now because that would disclose the Government's hand but, equally, it knows it could not get away with it now, given the numbers in this House and the likelihood that the non-aligned Independents would support the Opposition in opposing it.
The former Minister for Energy, the Hon. Robert Webster, in an address he gave to the 1992 annual panel seminar of electricity advisers, the Advisory Panel of the Institute of Municipal Management, New South Wales Division, canvassed the options of privatising Pacific Power's generating and transmission activities. He said:
The Government Trading Enterprises Reform Committee was asked to prepare a program of possible privatisations merely for Cabinet consideration.
I will not detail them all but the one of importance is
"In respect of Pacific Powers generation and transmission activities, a range of further views have come forward on such options as - "
The then chairman of the Government's energy committee, the Hon. R. T. M. Bull in another place, said in an article in the Southern News of 3rd August, 1992:
- eventually privatising one or all of Pacific Power's generating units.
The privatisation of the State's major electricity producers was "the way to go", according to Richard Bull. Mr Bull (National Party) is a member of the Legislative Council and chairman of the State Government's Energy Committee.
Mr Bull, from Holbrook, said it was not essential for the government to continue to provide services such as electricity production.
An influential member of the Government laid that out for all to see. I merely reiterate what I said at the outset and refer to Cabinet documents that the Opposition has made public today in which the Government's agenda is clearly laid on the line. The agenda is based upon an ideological, philosophical commitment that has been put forward because this Government's Budget is in a mess. The Olympic Games budget has blown out. The Opposition supports the Olympics, but it would not be an Opposition worth its salt if it did not question the blowout of the expenditure from $1.7 billion to $3 billion. If the Government were to get a majority in its own right at the next State election, all the privatisations I have referred to would be on the agenda for sale because of the Government's ideological commitment and its urgent need for money through the Budget blowout, much of which was caused by the Olympic Games budget. I could go on at length about the privatisation experience in the United Kingdom, which has not been in the public interest because of the lack of service and pricing, but I will quote instead an editorial in the Sydney Morning Herald of 10th May, in which it was said:
According to him, the advantages of the government selling off electricity plants would be the instant revenue which would be raised.
According to business critics, the sluggish move towards a national grid is serving only the inefficient State electricity authorities and bureaucratic vested interests.
That statement comes not from the Opposition but from the Sydney Morning Herald, a paper that does not generally support the retention of government ownership of enterprise. I would like to spend some time going through the contracting out provisions referred to in the other Cabinet document that the Opposition released, but time will not permit. Suffice it to say that in relation to contracting out by the Electricity Commission, the "Electricity Week" newsletter, in dealing with an analysis of a Federal Government report on government trading enterprise performance indicators from 1987-88 to 1991-92, said one of the big surprises of the analysis is that the non-fuel generating, operating and maintenance costs of New South Wales Pacific Power have actually increased in the period under consideration, and they give the figures. [Time expired.]
Mr COLLINS (Willoughby - Treasurer, and Minister for the Arts) [4.4]: The fascinating thing about the motion before the House is that it was not moved by the Leader of the Opposition. The Leader of the Opposition is nowhere near this Chamber. He will not dare show his face during this debate this afternoon. Why not? Earlier today honourable members saw an exercise in nostalgia by the honourable member for Liverpool, who said that on this day two years ago a report had been tabled. Pretty close to this day one year ago the Leader of the Opposition made a speech to the Australian Institute of Company Directors. The Leader of the Opposition put on his best blue pinstripe suit and his best corporate tie and headed off to the big end of town to talk to the Institute of Company Directors. He said he wanted to keep the pace of microeconomic reform cracking in New South Wales. Under his business plan, according to the Sydney Morning Herald report of his address to the directors, coalmines attached to Elcom's power stations should be sold off; the F4 and F5 tollways west of Sydney would be abolished, but private companies would be allowed to take over roadbuilding on the Pacific Highway, financed by tollways; private interests would take over the unfinished rail link at Port Kembla; drinking water and sewage treatment plants could be taken over by private companies; and at least two privately run prisons would be allowed.
That was the good microeconomic reform suggested by the Leader of the Opposition on 1st October last year. That was such good microeconomic reform that the Sydney Morning Herald ran a headline on its editorial entitled, "Carr embraces Greinerism?" The Sydney Morning Herald was stunned and could not believe that the man who represents the Labor Party in New South Wales, the party that wants to see all services delivered through the public sector, the party that shuns privatisation, all of a sudden embraces Greinerism. I will read the conclusion of that editorial straight away, because I think that is really what this exercise is all about this afternoon. The conclusion states:
In the UK, privatisation and deregulation of the electricity sector have produced few gains for anyone apart from lucky shareholders in privatised regional power companies that the Government sold at too low a price. Prices have risen for most users, and the increased competition the Government expected has not materialised.
They spoke a little too quickly at the Sydney Morning Herald, because Mr Carr's opportunism continues to this moment, and it will continue so long as he is Leader of the Opposition. This afternoon the honourable member for East Hills spoke about the evils of privatisation and how a terrible fate is about to befall New South Wales if the Government takes a single step further along this road of privatisation. The Leader of the Opposition is not in the Chamber, and honourable members can bet he has his radio turned off so he does not have to have his conscience, such as it is, troubled by his hypocrisy. The editorial also stated:
But with yesterday's speech Mr Carr has limited his scope for opportunism and made hard decisions a little easier for the Government.
The Leader of the Opposition was not present in the Chamber to hear the speech of the honourable member for East Hills. It is a concession to economic
lunacy for the honourable member for East Hills to preach a doctrine that is the exact opposite of the doctrine that earned the Leader of the Opposition the Sydney Morning Herald editorial in which it was said that perhaps a sense of reality was creeping into the Labor Party. Honourable members are getting a different story this afternoon. What are Opposition members basing the story on? They are basing it on some stolen documents, documents that have not been endorsed by Cabinet. The Leader of the Opposition issued a press release this afternoon and released documents that are the subject of a police investigation. One of those documents sets out the principles of privatisation. While on the subject of principles of privatisation, this Government recognises, and continues to recognise, the extremely wide range of services that have been delivered and continue to be delivered through the public sector in this State and delivered well by hard-working public servants. As I said the other day, the Government is willing to look at alternative means of delivery and to continue to look at an agenda of more efficient government and better value for the taxpayers' dollar. We on this side of the House make no apology whatsoever for being prepared to consider the possibilities. All taxpayers would demand that any member of Parliament have an open mind on the better, more efficient delivery of services to them.
An important process is going on in New South Wales at the moment. The process is both subtle and invisible, but I wish to bring it to the attention of the House. This State's current credit rating is being reviewed by the ratings agencies. Standard and Poor's is already at work to determine whether this State should retain its triple-A rating. Moody's will do the same thing over the next month or so. Those ratings agencies must look at what is happening on the other side of this House. They must fear what would befall this State under a Labor Government. The Labor Party not only has divisions and hypocrisy - what else is new; we are used to that - but it has a complete polarisation of thought, with the honourable member for East Hills dead against privatisation and the Leader of the Opposition saying that the party would privatise a host of things.
The credit ratings agencies must be deeply concerned about what they hear from the Opposition today because it is a real threat to this State. The Government is at least prepared to look through the list of services offered by the public sector and government trading enterprises in this State to work out whether we will need greater efficiency and whether there are other ways to deliver the services. The Government is prepared to go through that list of microeconomic reform issues - that is, attachment B, headed "Draft Strategic Review Program", which has not been endorsed by Cabinet. It is a list of possibilities. The Opposition does not have the guts to think about it; it does not have the courage to look through the alternatives; it is not prepared even to consider the possibilities. That is a matter of extreme concern.
For the Opposition to try to dress this up, saying that it is a strategic review program which has been endorsed, is absolute nonsense. It is a list that any person interested in microeconomic reform could have put together; it is a list of the patently obvious, but it has not been endorsed or considered by the New South Wales Cabinet. Any attempt to misrepresent the Government's intention should be dammed for what it is worth. This motion is one of the most alarming exercises of hypocrisy that honourable members have seen in a House that sees exercises of hypocrisy on a regular basis. I note again the absence of the Leader of the Opposition. I emphasise again the fact that attachment B, the list of possibilities, is nothing more than that: a document prepared by Treasury that has not been considered or endorsed by Cabinet. I thank the House for its indulgence and I firmly reject the motion put forward this afternoon by the Opposition.
Ms ALLAN (Blacktown) [4.13]: It is very obvious that the Treasurer and Minister for the Arts has his mind on other things after that half-hearted attempt to try to defend this Government from the allegations made today by both the Leader of the Opposition and the honourable member for East Hills. The Treasurer has relied on material that is 12 months old to dispute the position that the Opposition is presenting. He has not denied the allegations that have been made this afternoon. The Treasurer waved around a series of Cabinet documents, which he has acknowledged to be Cabinet documents. His only excuse and only defence is that the documents have not yet been considered by Cabinet. The Opposition know what Cabinet has been considering over the last few days: it has been busy considering matters relating to the Treasurer rather than these issues, but I am sure they are on the agenda for a future date.
I have a particular interest in this debate because of the vital involvement of the Sydney Water Board and the Hunter Water Corporation in the Government's specific agenda for privatisation. In January this year the Minister responsible for the Water Board, Mr Webster, announced the Fahey Government's intention to make the Sydney Water Board a candidate for privatisation. Despite some fairly half-hearted attempts since January to retract that statement, all the actions of the responsible Minister and the leadership of the Water Board over the last six months have confirmed the Government's strategy to elevate the Sydney Water Board to being a high priority for privatisation after the next election.
The Water Board has already spent almost $250,000 over the past year on consultancies on Water Board privatisation. These are not consultancies relating to the Hunter Water Corporation but to the Sydney Water Board. These consultancies have looked at community attitudes to privatisation, reviewed tax implications for the board if it is privatised and various models for corporatisation and privatisation. Throughout this period the Government and the Water Board have denied the Parliament and other bodies the opportunity to look at the consultancies.
I am a member of the Joint Select Committee upon the Sydney Water Board. That committee has been trying vigorously to get hold of some of those documents and it has been thwarted at every opportunity by the Government, the Treasury and the Water Board. At the present time the committee is trying to gain access to the Pacific Road consultancy, which was given the job by the Sydney Water Board to devise a plan on how to corporatise and then privatise the board. Despite resolutions of the Joint Select Committee upon the Sydney Water Board to get access to that documentation, that access is being constantly denied. That is simply a symbol of the various secrecies and protective mechanisms in which the Government has tried to cloak its whole strategy of privatisation over the past few years.
We know from our experiences with the Water Board and the electricity bodies that senior officers have already travelled the world extensively to look at models of privatisation in Great Britain and France. Former Ministers responsible for these organisations have also been confirming the Government's strategy, yet honourable members have seen a lame duck defence by the Treasurer this afternoon in an attempt to shift the focus away from the Government's attack. The Opposition believes that in relation to essential services such as water and electricity there are good reasons not to go down the track of privatisation.
The Opposition is backed up in those views by other organisations. For example, the Industry Commission has rejected privatisation of water in Australia. I have had the opportunity to look at the privatisation of water in the United Kingdom. As the honourable member for East Hills has already indicated, in the United Kingdom everyone concerned with respect to the track record of the private water authorities is greatly disappointed. Even the conservative Government in the United Kingdom has had to go down the path of greater regulation since the privatisation of water and, therefore, greater expense. It is now acknowledging that when it privatised water 10 years ago it made the wrong decision. It is an absurd path for this Government to pursue at this particular time, but it is obvious that the documents we presented today hit the mark. The Government's real agenda is to support privatisation, despite the protestations of the Treasurer.
Mr ROGAN (East Hills) [4.18], in reply: In this debate the Government had the opportunity to state its position on privatisation and to move away from the Cabinet documents that have been released today. The Treasurer made a lot of an article from the Sydney Morning Herald that attributed statements to the Leader of the Opposition. He has since stated that the journalist got it wrong. I will not go into the details but it is pathetic that the Government should base its argument on a newspaper article purporting to represent the view of the Leader of the Opposition. The sale of the Elcom coalmines referred to in the article has been opposed by the Opposition. At the end of the day the Government moved away from the sale of the mines, and I think only two or three were sold. The Government's agenda for privatisation is outlined in the Cabinet papers. If privatisation is only an option, as the Treasurer said, why has the Government spent so much Treasury time preparing the documentation? I doubt that the Government would have gone to that trouble unless it intended to have a massive fire sale of government assets after the next election. The Treasurer referred to microeconomic reform. The Leader of the Opposition has spelt out where the Opposition is on microeconomic reform.
Mr Collins: Where are you?
Mr ROGAN: I would love to debate the matter but there is simply not time to do so. Suffice it to say that it will be spelt out. It is in policy documents that have been publicly released. I am sure Treasury officials would have it. The Treasurer referred to the triple-A rating. When Labor was in government that rating was not under challenge. It has come under challenge only since the coalition came to office. The rating is constantly used as an excuse for privatisation. On contracting out, I have said in the House previously that it is ludicrous that 4,000 jobs have been lost in Elcom with many of them simply disappearing from the public sector only to be given to the private sector. I referred to the case of Wallerawang power station, where the employees who were made redundant returned to do the same job as they were doing before but got more money. I referred to the survey the Industry Commission is conducting into the costing of contracting out. "Electricity Week" newsletter stated that savings have not occurred following contracting out of services by the Electricity Commission. If microeconomic reform is required, the Opposition will support it provided it does not involve the wholesale selling off of - [Time expired.]
Motion agreed to.
Mr Carr's speech represents an important concession to economic reality.