Asset sales dominate NSW and QLD elections

Asset sales and leases: selling the farm?

Newly-sworn in Queensland Premier Annastacia Palaszczuk has said that her first act as Premier will be to put “a clear stop to any work to do with asset sales” while reassuring Queensland’s public servants that their “jobs are safe”.

The sale and lease of public assets played a defining role in the downfall of Liberal Premier Campbell Newman last month, as did his hacking of 14,000 public sector jobs after the 2012 election, despite giving assurances to the contrary beforehand.

Mr Newman had initially pushed hard for asset sales during his election campaign but he switched to talking about 99-year leases when sales became unpalatable to many voters.

Plans included leasing electricity networks and retailers, ports and water pipelines to raise $37 billion for major infrastructure projects and to pay off some of the state’s debt.

Labor’s election campaign promises, in contrast, offered only a modest spending spree while arguing that retaining assets would bring in $2 billion a year.

Interestingly, at the beginning of the campaign the public had pegged asset sales as the fifth most important issue, behind economic management, jobs, health and education but after an edict from the ALP Campaign Director to focus on asset sales the issue had moved up to second by the end of the campaign.

It is a lesson the Labor party had to learn the hard way after former Queensland Labor Premier Anna Bligh was ousted in 2012, following her shock $15 billion fire-sale of state-owned rail, port and forestry.

Ms Bligh caused an angry public backlash after announcing surprise asset sales in her 2009 June budget just three months after coming to power.

Secretary of the Electrical Trades Union Peter Simpson, whose union spearheaded the Not4Sale Campaign, said asset sales and leases were pivotal to Mr Newman’s defeat.

Mr Simpson said many Queenslanders lived outside the capital so that fair and equitable service provision, like electricity, was a priority.

“The government’s proposal to sell electricity, port and rail assets was met with the same scepticism and as the government’s agenda took shape with its use of taxpayers’ money to the tune of at least $12 million to ram asset sales/hybrid 49 per cent sales and finally long-term leasing down the throats of Queenslanders through its StrongChoices PR campaign, Queenslanders got angry,” Mr Simpson said.

He added that the LNP showed “total reliance” on the sales to fund their election commitments, despite the public’s objections to asset sales and leasing running around the 65 per cent mark.

“Another factor which impacted on the LNP’s Privatisation agenda was their refusal to reveal the details of the leasing arrangements before the election. Queenslanders became increasingly distrusting about the LNPs motives and its agenda,” he said.

Mr Simpson said that ETU analysis showed that asset leasing/sales issue was a major factor in the huge swings in Ipswich, outer suburban Brisbane, Wide Bay, Far North Queensland, Townsville and Central Queensland.

During the election campaign Ms Palaszczuk incensed Mr Newman and his team by constantly referring to the Premier’s Strong Choices plan as a push for asset sales.

Former Newman Treasurer Tim Nicholls retorted that it was not the same as selling them.

“If you lease your house out for a year, you get it back at the end of the day,” he said.

“It’s the same with these businesses as well. The underlying control will always sit with Queenslanders through the Queensland government and we’ll be able to, as you do with all leases, see those assets returned back to the people of Queensland at the conclusion of the lease.”

But unhappily for Mr Nicholls he is on the record as previously calling 99-year leases proposed by the Labor government a “furphy”.

“As anyone would know if they had observed the privatisation of assets, a 99-year lease is as good as giving away the farm,” he said on March 23, 2010.

With the NSW fast approaching on March 28, asset sales and leases are once again likely to be the subject of a fierce battle for the hearts and minds of voters.

NSW Premier Mike Baird has announced that if he is re-elected on March 28 he will privatise transmission company Transgrid and 50.4 per cent of distribution businesses Ausgrid and Endeavour Energy with a 99-year lease to fund $20 billion worth of infrastructure projects.

While Mr Baird is substantially more popular than Mr Newman was, the premier’s team will be concerned that public support for the partial privatisation of poles and wires appears to be falling away.

A Fairfax/Ipsos poll in February put public opposition to partial privatisation at 67 per cent, up three per cent since November last year. Fewer than one in four voters – or 23 per cent – support the partial privatisation of the electricity poles and wires.

Mr Simpson said asset privatisation would definitely be an issue in the NSW election, particularly in regional areas.

“It could be crucial in throwing up some extraordinary results as regional communities become more aware about what is at stake,” Mr Simpson said.

“Given the Queensland experience you would have to say anything can happen and people might register a protest vote and (like Queensland), number every square and put the Liberals and Nats last, thus starving the government of preferences, this particular strategy cost the Queensland Government about nine seats where they were ahead on primary votes but lost after preferences.

“Given NSW also has the Upper House to contend with, which requires a much smaller swing away from the government to deliver seats to anti-privatisation minor parties, opposition to asset leasing could well be a determinant in the upcoming election. While it may not bring down the government it could well halt the agenda. ”

NSW Labor leader Luke Foley has already stated that he is not ideologically opposed to some privatisation, for example for some ports, although he has come out against Mr Baird’s plans for poles and wires.

The Not4Sale campaign argued that past evidence showed that following electricity privatisation prices went up, there were more power failures, services suffered and jobs were lost. They also argued that profits flowed overseas.




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2 thoughts on “Asset sales dominate NSW and QLD elections

  1. There are some additional explanation (details) needed to understand the term “99 year lease”. Does the leased facility simply fall back into ‘Public Hand” at end of term, or are any ‘Compensation’ payable by the Government for – say- improvements done by the Lessee at handover ?

  2. NSW voters are only just starting to pick up on privatisation fears and the exorbitant costs they will bring. Poles and power aside, the NSW Government is surging ahead with privatising its entire IT Infrastructure. As privatisation and outsourcing are dirty, expensive words, the Cloud is a much better name for the waste of taxpayers dollars. Clouds are fluffy, pretty in the sky and out of the way. On the ground for IT the Cloud is a VERY expensive, drip-priced, vendor-controlled system that I’m aghast as to why there is not much more noise about it. IT personnel will ultimately lose their jobs while the NSW taxpayer will fork out millions of dollars going to overseas multi-nationals to host the personal records of the people.

    When you’re trying to lodge a DA, search for your unclaimed money or using a mobile app and it’s unavailable, today it’s a matter of a business member to walk around the the IT people and get it sorted together. Soon it will have to be a phone call, then a ticket raised, then more information, etc etc. Get ready for an expensive loss in efficiency. Had your license renewed lately? The card used to be issued on the spot. The card printing was outsourced. The Government cited efficiency for something that now takes a week.

    The Government will have you think that the privatisation of its data centres into two, ie Unanderra and Silverwater, and then getting non-Government entities to host operating systems and applications from there will be an exercise in saving money. This can happen ONLY via an economy of scale and ONLY in the short term. Problem is, once the data is in the “Cloud”, it VERY expensive to get it down again. Ah, who am I kidding; it’s VERY expensive to get up there. Millions of dollars already in the planning. It’s the old business trick. Spout massive money savings to create the interest, identify the need and once the client is truly embedded, hit him with every charge that you can get away with. If the NSW Government cannot see this, they must not be in power. I’m a NSW taxpayer and I’m bloody annoyed as to the upcoming waste of money the Cloud will bring.

    Lastly for all you budding extremists, if you wish to take the NSW economy and bring the state to its knees, you have to look only at two sites.

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