Monday, May 5, 2008

Privatisation Process Will Proceed, One Way Or Another

The debate over the privatization of the power industry in New South Wales became high drama at the weekend’s A.L.P. conference, along with just a little farce. While it was no surprise that more than 700 delegates opposed the plan, the heated nature of the debate has begun to distract from the actual issue itself. In particular, Treasurer Michael Costa has been lambasted for his bombastic style, described by some as a childish tantrum.

The Premier, meanwhile, has remained resolute in his commitment to the sale, while at the same time offering the prospect of further discussion encompassing the possibility of a compromise position. It appears likely that some sort of joint venture partial public float will eventually be agreed, but there is a great deal of negotiating yet to be done before that happens, if it ever does.

What is clear however is that unless the Premier is actually dumped by his own party, some sort of privatization will go ahead. In fact, even if he is dumped, it’s still only a matter of time before privatization occurs. What people don’t seem to realize is that the current compromise position may be the best deal they ever get.

Despite the genuine concerns many people have about privatization, it’s no longer a question of will we or won’t we. After decades of failure to reinvest dividends into the infrastructure, it’s now a question of how. If this privatization fails to proceed, I suspect that a future coalition government will sell the lot, without the concessions and safeguards attached to the current plan.

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