Power struggle: The Leader asks treasurer and shadow treasurers questions on the pivotal election issue

Mike Baird’s plan to privatise 49 per cent of the state’s electricity network to fund infrastructure projects is central to the state election in less than two weeks. The Leader sought to help voters decide by questioning Treasurer Andrew Constance and Shadow Treasurer Michael Daley on the pivotal election issue.

MICHAEL DALEY - NSW Shadow Treasurer

Q: Why should voters oppose the Coalition plan?

A: The plan is a dud deal for the people of NSW. It will push up family power bills and will result in more than $1 billion being ripped out of schools and hospitals. Labor has a fully-funded infrastructure plan that invests in the right priorities and keeps our electricity network in public hands.

Q: If dividends from the network are declining, isn't it better to "cash in" now?

A: The publicly-owned electricity network contributed $1.7 billion in dividends in each of the last two years, paying for teachers, nurses, police, schools and hospitals. NSW Treasury has underestimated dividends year after year.

Q: The government says it can guarantee lower prices?

A: A private company does not spend billions of dollars buying our electricity network to cut power bills. Families don't pay part of a bill called network charges; they pay a retail power bill. Mike Baird has deregulated retail prices so power companies can now charge their customers any price.

The Australian Energy Regulator put out a draft determination that would cut network charges in power bills but Mike Baird opposed it - he wants to fatten the pig for market to get a bigger price.

Q: What happened after privatisationin other states?

A: South Australia privatised their network 20 years ago and now pay the highest retail prices in Australia, according to the independent Australian Energy Regulator. That same report says NSW and Victorian residents pay about the same in power bills but Victoria also has a bigger retail profit margin than in NSW.

Q: What will be the impact on jobs?

A: A private company that has just spent billions of dollars buying our electricity network will be wanting to make a profit and that means cutting staff and comprising on reliability of the power grid.

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ANDREW CONSTANCE - NSW TREASURER

Q: Why should voters support the plan?

A: Rebuilding NSW is about fixing congestion. A new train system and new roads will fix bottlenecks, grow the economy, create hundreds of thousands of jobs and a better quality of life. The plan unlocks billions of dollars of value locked in an ageing asset to be spent on new assets.

Q: Isn’t it better to receive an annual divided than one jackpot? 

A: Labor’s claim about dividends from the network is wrong.  Returns are declining, and are set to drop to just $407 million in a few years. The independent national regulator plans to reduce power prices by about 10 per cent, meaning returns to the government will fall also. 

Q: Can you guarantee power prices won’t rise?

A: Prices are set by the national regulator. No matter who runs the electricity network, they cannot charge more than is set by the governing body.  

Q: What happened after privatisation in other states?

A: The cost of getting power to your home through the “poles and wires” is about 50 per cent of your bill. It’s been proven transmission charges have fallen in states where the power grid is run by a more efficient private operator. Network charges dropped 18 per cent in real terms in Victoria and 17 per cent in South Australia.

Q: How many jobs will be lost?

A: No matter who runs the power grid, prices are set by the Independent national regulator, which is reducing prices in July. Businesses will need to reduce their costs while maintaining high levels of reliability required by law. The Australian Energy Regulator has said government-run grids are inefficient and the network is overstaffed by about 4600 employees. It won’t be known how many employees will not be needed until a final ruling by the regulator in April.

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