News State QLD News Power sell-offs pushed up prices, report says

Power sell-offs pushed up prices, report says

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Electricity privatisation during the past two decades has been a failure, a report says.

Power price rises have been the steepest in Victoria and South Australia where electricity assets were sold off during the 1990s, the study commissioned by the Electrical Trades Union (ETU) found.

With federal Treasurer Joe Hockey calling on the states to consider asset sales, report author John Quiggin said complaints against power companies had increased after privatisation.

“Prices have risen dramatically,” Prof Quiggin, an economist, said.

“My research comprehensively finds that the free-market based reform process in energy has been a failure.”

Privatisation had seen funds diverted away from operational costs to management and marketing, with consumers also paying higher interest rates on private sector debt, the report said.

Reliability had also declined in Victoria.

But Queensland Energy Minister Mark McArdle hit back at the ETU, describing it as “a senior member of the Labor Party family”.

He said the government would not sell CS Energy or Stanwell Corporation without an election mandate.

“The Newman Government will have a mature, disciplined discussion with Queenslanders in 2014 about… the sale of some government owned businesses to fund improved services and infrastructure,” he said.

The report comes as Mr Hockey asks the states and territories to sell assets as a way of funding infrastructure.

He will push that idea at a meeting of G20 finance ministers this weekend.

The ETU’s Queensland secretary Peter Simpson says consumers and those employed in the energy sector have suffered in Victoria under privatisation.

“This research provides a factual basis to drive decision making, rather than a reliance on free market ideology,” he said.

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