Monday, December 10, 2007

Power to the People, Right On!

The plan to privatize the electricity industry in New South Wales is still a contentious issue. The proposal has a number of features designed to address the main concerns, such as job guarantees, bonus payments, and price caps. But does it all really add up to a better deal for consumers?

Unions are concerned about the threat to jobs and conditions. This has been addressed with a plan to impose a freeze on both for three years. Consumers are concerned that prices will rise, and this has been addressed with price protection until 2013. But despite the fact that these conditions have been imposed, the concerns haven’t gone away. In fact, the need to put them forward in the first place could be seen as an admission that without those protections jobs would go and prices would rise. Otherwise, they wouldn’t be needed would they?

Many people are strongly opposed to the privatization of public infrastructure on the grounds that the taxpayer should continue to own the asset, enjoying the revenue from it, and guaranteeing a level of customer service that is not purely profit driven. Past experience with privatization hasn’t done anything to alleviate that concern.

The privatization of Telstra has seen the reduction of jobs along with a perceived decline in customer service. Along with that, in spite of all the talk about competition, Telstra still maintains a monopoly on most of the physical telecom network. The Telstra experience is proof for many people that the private enterprise approach simply cannot adequately meet the needs of rural and remote Australia, while at the same time serving the interests of shareholders and pursuing a profit.

There are two fundamental problems here. One is the unique nature of Australia which is suffering from the attempt to thrust an American model of economic management onto a place which is not America. The other is a more universal problem which can be summed up with this question: Is the system being made to serve the people, or are the people being made to serve the system?

The idea that democracy is a form of government where sovereignty resides in the people is gradually being undermined by the corporatisation and securitisation of everything the taxpayer owns. In other words, we are becoming tenants in our own homes. A significant slice of the general public is opposed to this privatization, and the government will be ignoring them if it presses ahead with this plan.

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