Adam Bandt (Melbourne, Australian Greens) Share this | Hansard source

A report that everyone ought to read, titled Electricity privatisation in Australia: a record of failure, makes crystal clear why this is the case. Once you sell off something, you hand it over to someone who wants to make a profit—and that is fair enough; that is how the private sector works—but the consequence of it is that they will make the profit out of the public. That is the first point. What the private sector then do once they have got it—and we found this, and any objective analysis demonstrates it—is that, because they do not have an interest in investing in capital and maintaining it, they do what every company would do, which is to squeeze the maximum possible profit out of its asset. This means the network gets run down, which is why in Victoria we saw a massive spike in complaints from customers about quality and reliability. We also find that the rate of return from these companies is at Australia-wide highs. The result with the electricity network has been that the owners have made post-tax real rates of return at close to 10 per cent annually since 2006. So the profit is significant and, again, it comes on the back of the consumers.

The last thing—and this is significant—is the reason that prices go up when you privatise roads and you have to pay a toll every time you go on them or when you privatise your electricity network is that it costs a heck of a lot more for the private sector to borrow money to fund its operations than it does for the public sector. What this report found in the case of the electricity network—and I think the figures would broadly apply to transport as well—is that we have had a cost in privatised assets of almost 10 per cent per annum interest on the corporate owner's debt on electricity assets, which compares to government borrowings of closer to three per cent. What does this mean? It means something very simple. If you wanted to build an electricity network or a public transport network at the cheapest cost, you would say that the government should borrow to fund that investment. It would not add to net debt, because you have an asset there to back it up. Most people would say, 'Yes, let's borrow to fund something as long as we are funding a useful asset that is ours.' So you have a choice: should the government borrow at three per cent to fund the asset, or should we get the private sector to borrow at 10 per cent? When this Liberal government says, 'The answer is to hand it over to the private sector,' it is no wonder that electricity bills go up. It is no wonder that the cost of getting on the roads goes up. This is because it costs the private sector more to borrow. If we could get over this obsession with debt and say, 'If you have manageable debt set off against an asset that is there for the public good, it is a sensible thing to do,' the country would be much better off. Most households know this, because people understand that, yes, they are in debt, but it is called a 'mortgage'. They are paying off the cost of their house because they will have an asset there at the end of it. As long as it is manageable, it is okay. As long as there is something there at the end of it, it is okay. The government should adopt a similar approach.

But here we have a slush fund to create a privatised toll road—supposed nirvana—across Australia. It is going to come at the expense of public transport when we need to be investing in public transport, and it is going to come off the back of the public paying more and potentially going into more debt. This government is not getting rid of debt; it is just shifting it across to the public. It is shifting it across to the students in the form of student debt. You will now find with the higher prices here that the public is going to end up paying more. We clearly have an agenda from this government for a privatised toll road network across Australia and also an agenda to support its private backers, and it is all going to come at the expense of the public. This is why we will oppose the bill, and I will move an amendment to it shortly. But Labor now has the opportunity to join with us to kill this bill stone dead.

This is a two-year fund that will last for the duration of this government. If Labor wants to do its own thing, if it wins the next election, then let it; but it should join with us now to stop this legislation. As the member for Grayndler, the shadow spokesperson, said in his contribution:

This asset recycling initiative is a fancy-sounding name for privatisation of state assets and a reduction of Commonwealth spending on infrastructure.

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The fund is an emblem for this government's political cowardice and lack of vision both when it comes to actual investment and to probity standards. The term 'asset recycling' is a different way of saying privatisation: the sale of existing public assets that are owned by the Australian people.

He is right, which is why the Greens will be opposing this bill. But I am not sure that he consulted with his Victorian opposition leader before putting this out, because the Victorian opposition leader, Daniel Andrews, who is going into an election at the end of this year, in his 'Project 10,000 trains, roads and jobs', which comes out under his signature, said:

Asset Recycling Process using the Victorian Transport Building Fund—

which is selling off the Port of Melbourne to fund some projects in Victoria. He continues:

In developing 'asset recycling' concept, Victorian Labor has closely monitored the progress of a similar program undertaken by the State Government in NSW.

He goes on to say:

Victorian Labor believes this approach is a common sense way to get things done without taking on unsustainable levels of debt or compromising investment in other important areas like health and education.

So which is it Labor? Is asset recycling cowardice and an ideological front, or is it your election policy in Victoria right now?

Labor will have an opportunity shortly to decide and to help kill this bill stone dead. To stop this short-term fund being established, which will only benefit this government, I move the following amendment to the motion that the bill be now read a second time:

That all words after “That” be omitted with a view to substituting the following words:

“the bill be withdrawn and redrafted so that it is renamed the Encouraging Privatisation Bill 2014 in order to better reflect:

(1) the true purpose of the bill; and

(2) that the bill aims to encourage state governments to sell off public assets as quickly as possible, in part to make up for the shortfall in Commonwealth funding to state governments arising out of the 2014 Federal Budget.”

We now have a golden opportunity to stop this toll road slush fund stone cold dead, and to put the final nail in the coffin of Prime Minister Tony Abbott's privatisation agenda. Very shortly, in a matter of minutes, and then again in the Senate, probably in a matter of days, the question will be where does Labor stand—is asset recycling, as the member for Grayndler said, political cowardice embodying a lack of vision and a different way of saying privatisation, or is it something that Victorian Labor wants to be elected to implement?

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