Wednesday, 11 June 2014

The charge of the Light Brigade !

Big  -  Public   - Essential !     Those three words would sum up a fair description of the New South Wales electricity industry.   It also explains why the electricity unions succeed in getting pay awards and working conditions that would be nothing short of a dream in most other industries.   They hold the power to turn the lights off in New South Wales, and that frightens governments of both political persuasions to accede to their demands.

It looks like the issue of selling off " poles and wires " is fast degenerating into a fight between the state government and the union supportive opposition Labor party.   Labor is controlled by the unions - and they are not going to give up their gravy train without a massive fight.   What is at stake is the inroads into living costs that power bills are imposing on the average family income.

Victoria has privatized it's electricity industry, and costs comparisons reveal that the running costs in Victoria are now less than half those of New South Wales.   If the Victorian costs applied to this state, the average power bill would be $ 256 a year lower.

It is not hard to see why !    NSW electricity runs a 65 car fleet for every 100 people it employs - and employees are permitted to take their car anywhere in Australia when they take their long service leave - with the fuel paid for by a company provided fuel credit card.

This litany of " lurks and perks " includes double pay and shift allowances for night work, four hours minimum pay for each hour worked on call outs, two minutes pay for each kilometre travelled on jobs - and a whopping 15% to 26 % loading on superannuation payments.

This would be completely unsustainable in any industry in a competitive situation, but like most government utilities, electricity makes it's own rules because it is an essential service protected by a government mandate.   No matter how unreasonable it's cost structure, the burden is simply added to each customer's power bill.

It is likely that this will be one of the main agenda items for next March's state election and New South Wales voters will face the usual political bias in the way the issues are presented.   One side will decry the selling off of a state asset.  The other side will point to the savings on power bills.   It is worth remembering that industry also pays for electricity, and if the charge in this state is higher than competition allows, it is a big incentive to move to where power costs less - and that means jobs.

Both sides of politics are capable of producing compelling arguments to reinforce their point of view.   How the cost of producing and distributing electricity is settled will have a major effect on the standard of living and job prospects of this state's residents.   Voters would be wise to reject glib promises - and carefully evaluate all the issues before making a decision !

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