Friday, May 30, 2008

Game Over In Power Struggle?

It appears that the way is now clear for the privatization of the electricity industry in New South Wales to go ahead. Treasurer Michael Costa has announced that the government will meet all of the opposition’s demands for the sale to go ahead. That means there is no need for the government to seek the support of the Greens or the independents, but can press ahead with the process. This, despite the fact that the unions and many within the Labor Party are still firmly opposed to the idea.

But is it really all over? Not yet. Chief among the demands made by the opposition is the requirement for the sale to be assessed by the Auditor General in reference to the price, the timing, and the consumer guarantees. Other demands include the preparation of a rural and communities impact statement, independent monitoring of the use of the proceeds, and parliamentary oversight of the clean energy requirements. These add up to a series of hoops that may yet scupper the deal.

If the opposition was bluffing with its demands, then the treasurer has just called them. But the fact is that the Auditor General may well find some deficiency in the sale arrangements and that would be enough for the opposition to withdraw their support. If the assessment does have an unfavourable result, then the real test will be what the opposition decides to do.

Will they oppose it and win the support of the 80 per cent of voters who are against privatization? Or will they continue to support it because they believe in the principle of the privatization if not the detail?

In this case, it aint over until Barry O’Farrel sings.

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