THE NSW government scheme to lease 49 per cent of electricity poles and wires to commercial operators could spark increased opposition in the election run-up.
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Consumers will note an independent report by the McKell Institute saying privatisation will push up power bills.
The government, to support its leasing plan, quotes other studies saying prices will drop.Price hikes are not the only issue.
McKell said there was no case for privatisation based on the implications for the budget and the efficiency of the system.
The Liberal-National Coalition pledged it would not sell the poles and wires before the 2011 election when it wanted to be in power.
But, in government, it sees nothing wrong with leasing infrastructure. It promises$20 billion ($6 billion for the regions) in infrastructure projects with $13 billion coming from the lease.
It is pork-barrelling on a massive scale.
One issue is overlooked – the potential loss of part of $2 billion in annual budget revenue from the poles and wires.
Deputy Premier Troy Grant says the plan is right for consumers and highlights the cash regions will get. He says “our poles and wires are not for sale”.
But, the government has not ruled out a future sell-off. Higher prices and less government revenue (and perhaps accompanying cuts to services) in exchange for infrastructure that would have to have been built anyway.
Many potential shocks and they could sell it all anyway.
