NSW Labor's electricity privatisation plans

By Owen Richards

From the start, NSW Labor Premier Morris Iemma’s attempt to privatise the state’s electricity industry — “the most important micro-economic reform in this state in decades” — has been marked by hypocrisy from all sides of official politics. Iemma and NSW treasurer Michael Costa are ruthlessly pushing for the sale despite Iemma’s pre-election assurances that he would never privatise electricity, and despite the NSW ALP conference voting 702 to 107 against the privatisation.

Prime Minister Kevin Rudd has given full support for the privatisation. NSW Liberal Party leader Barry O’Farrell strongly supported the privatisation in his 2007 budget reply, but now, with an eye to quick political mileage, feigns concern about the effects of the sale on NSW voters. Labor parliamentarians, angered by Iemma and Costa’s willingness to make deals with the Liberals (thus cutting them out of negotiations), are threatening to cross the floor and vote against Iemma’s bill. Some of them might actually do it, especially if Liberal votes in favour mean their vote isn’t needed to pass it. Meanwhile, Unions NSW has adopted a strategy of sending emails to Iemma and turning protests on and off like a tap.

The farce reached new lows when one of Iemma’s ministers, John Della Bosca, and his wife, federal MP Belinda Neal, were involved in an altercation with staff at the Iguanas Bar in Gosford on June 6. “Iguanagate” had Iemma dithering over whether to discipline his minister, who is one of the key caucus backers of the privatisation plan. Growing media pressure finally forced Iemma to stand down Della Bosca on June 13.
Big business has been desperate for the sale to go ahead quickly. The ABC on June 17 quoted Patricia Forsythe, executive director of the Sydney Chamber of Commerce, as saying, “The eventual privatisation of the sector will send a message that NSW is open for business”. Big business is also telling the Liberals not to “score points” against Iemma by voting against the sale. Transfield Services chairperson Tony Shepherd claims the NSW economy will be set back 20 years if the sale is blocked.

The plan

Iemma’s proposal involves the sale of the power supply retailers Integral Energy, Country Energy and Energy Australia. Power generation — originally planned for outright sale — would now instead be leased to the private sector. The plan was first raised after the Owen Inquiry report, commissioned by Iemma to justify the sale, was released in September 2007.

Iemma claims the expected $15 billion from the sale will fund desperately needed infrastructure projects such as upgrading of rail, water and sewage systems. He has also claimed that the sale would mean the government wouldn’t have to spend the estimated $15 billion required to set up two new baseload generators that the government says will be required by around 2014.

On May 15, Iemma indicated that his Electricity Industry Restructuring Bill 2008 would be introduced into the NSW parliament for the June sitting. However, on June 12 he announced that the government would agree to the Liberals’ demands to give the auditor-general a greater say over the sale and to issue a rural communities impact statement. The bill may now be postponed until the next parliamentary session, beginning September 23.

A Unions NSW survey of more than 1000 NSW voters found that public opposition to the privatisation is as high as 85%. And for good reason. In the context of the global climate crisis brought about by greenhouse gas emissions, handing over electricity utilities to private companies with an interest in raising profits and thereby energy consumption, poses an increased threat to the environment. The profits-first motive of the companies that get their hands on the NSW electricity industry will also drive up prices, slash jobs and orient infrastructure investment and maintenance, not to where it’s needed, but to where it’s most profitable. Services will therefore suffer.

Unions NSW’s phoney war

The Unions NSW “Stop the Sell-Off” campaign, launched in December last year, has followed a line of tightly controlled protest and lobbying. The only “action” advised by the Unions NSW website is, “send Morris Iemma and his MPs an email today”. Like the ACTU’s campaign against the Howard government’s anti-union legislation, Unions NSW is using limited public protests as a way of allowing those opposed to the sale to let off steam while the union officialdom seeks a deal with Iemma and Costa.

A May 27 ABC report revealed that a planned anti-privatisation rally was cancelled by Newcastle Trades Hall Council “to avoid inflaming the issue”. Council secretary Gary Kennedy said: “The negotiations are at a very delicate stage … We don’t want any sort of incidents to jeopardise negotiations. Everyone’s a bit pumped up”.

While it is a refreshing change to see ALP MPs and Laborite union officials criticising a neoliberal outrage by one of their anointed leaders, that should not cause the left, or anyone else, to believe that this is a serious fight against neoliberalism by the Laborite officialdom of the labour movement. And because it is not a serious fight by those “leading” it, the opposition to privatisation will most likely be defeated, in either the short or medium term. If the bill is somehow stopped in parliament this year, it will be back next year or the year after, perhaps presented by a Liberal-led state government.

The left’s ‘official optimism’

Much of the radical left has tended to underestimate what it would take to stop the privatisation. For example, leaders of Solidarity (formerly the International Socialist Organisation, publishers of Socialist Worker) are as aware as anyone of the backroom negotiations between Iemma and Unions NSW. But in an article in the April issue of Solidarity magazine urging Unions NSW to call a protest action outside the NSW Labor Party conference, Kieran Latty claimed that “this kind of pressure can ensure the proposal’s defeat at the [NSW ALP] conference. Such a vote would effectively sink privatisation …” But it wouldn’t and it didn’t.

The same sort of false expectations also seemed to have taken hold of Socialist Alternative. Under the headline “Fight against power privatisation builds momentum”, the May issue of Socialist Alternative magazine argued: “This year the focus [of May Day] will be the Unions NSW protest against electricity privatisation, with the rally being held outside the ALP conference venue. Hopefully this will be a victory celebration.”

A May 7 Green Left Weekly article by Socialist Alliance national convener and Democratic Socialist Perspective (DSP) national executive member Dick Nichols about the May 3 NSW ALP conference vote was a peculiar mixture of realism and nonsense. For example, he fantasised about “deep fractures in the Right and Left factions of the NSW ALP’’. But he also, more realistically, warned that the Stop the Sell-Off campaign should have a “Plan B” to stop the privatisation from going ahead in case Iemma’s bill was passed. However, he then concluded: “In the words of the latest Socialist Alliance leaflet: ‘The only way to stop electricity privatisation dead in its tracks is the combination of industrial action and mass public protest … Unions NSW must commit to organise total union resistance to the sell-off, starting with an industrial campaign of complete non-cooperation with government privatisation plans.’”

What the Socialist Alliance leaflet’s author says Unions NSW “must” do is something it has zero intention of doing. The leaflet might just as well have called on Unions NSW to organise soviets. The leaflet and Nichols’ GLW article pandered to and reinforced the illusions of those who believe that the Laborite careerists who dominate the NSW union movement can lead a serious campaign of mass action on a question like this.
Solidarity, Socialist Alternative and the Democratic Socialist Perspective all claim to be Leninists. Yet their common approach of suggesting that Unions NSW might lead a serious campaign on this issue was an example of what Lenin called “official optimism” — unjustified optimism in the Laborite union officialdom.

The reality is that there cannot be a serious union campaign against the neoliberal policies of a Labor government while the unions remain tied to the pro-capitalist and pro-neoliberal ALP. Suggesting the contrary — that the present Unions NSW can be persuaded or pushed into conducting such a campaign — only covers for the ALP’s deliberate hamstringing of the unions as effective organisations of the defence of workers’ immediate interests.

There can be no relying on Labor or its union officialdom. Some of the loudest supporters of the current privatisation push — Neville Wran, Barrie Unsworth, Bob Carr and Michael Easson, not to mention Iemma and Costa — were themselves officials of the NSW Labor Council (the previous name of Unions NSW). This is a well-trodden career path, on which Labor Party union leaders walk into lucrative parliamentary positions. Once there, they directly serve big business’s interests against the workers they profess to represent.

[Owen Richards is a member of the NSW Teachers’ Federation and the Revolutionary Socialist Party.]