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Issue 574, 5 October 2007 - All unions should back the Greens

Greens must act to stop NSW power sell-off

UNIONS HAVE reacted with anger to plans by the NSW Labor government to privatise the state's power industry. This comes after an inquiry into future electricity supply recommended that the government withdraw from the power industry entirely and put it in the hands of the national energy market.

The unions, especially the Electrical Trades Union (ETU), are rightly dismayed.

John Robertson, secretary of Unions NSW said, "I don't think the private sector is in a position to deliver electricity in NSW without having an impact on workers and on price." In the contest of the federal election, Robertson warned, "I think it goes into the mix".

Although Premier Iemma has stated he will not sell the power stations or the actual grid, he is not averse to selling the retail energy business. The retailers are overjoyed.

Everyone else is horrified. Even the National Party is worried by the prospect of privatisation's impact on country areas already hammered by the worst drought on record.

The Greens condemned the Owen inquiry for recommending nothing to curb electricity demand or to reduce greenhouse gas emissions. His report does not mention solar power or any other strategy for reducing energy demand.

The inquiry, headed by energy economist Professor Owen, delivered the result that Treasury and the Premier's department wanted: privatisation and removal of government responsibility for power provision and greenhouse gas emissions.

Between meeting greenhouse gas emission targets and increasing energy demand, Owen predicted the need for substantial investment in the power industry.

But Treasury wants to get that cost out of the state budget. It argues that the extra cash from the sale of retail businesses can be used to spend on schools and hospitals.

A glance at the crumbling services in our hospitals and lack of classroom facilities for teachers and students tells us that this is a joke.

Market madness

The state government sees selling the retail businesses as the means of starting divestment of the whole power industry.

Pressure to integrate the sectors of the industry would be hard to resist because the state energy market is too small to sustain multiple power retailers separate from generation.

The stated aim for Owen (and Treasury) is not combating greenhouse emissions but preserving the AAA credit rating for the state.

The report's obsession with the market as the only means of delivering cost-effective electricity prevents any serious consideration of how to lower electricity use. This is because neither wholesalers nor retailers of energy have an interest in reducing demand for the product they are selling.

Most people are opposed to privatisation because job losses and higher prices have invariably resulted in other instances-for example, the cost of Compulsory Third Party motor insurance.

So the Greens should not hold back from criticising this report's reliance on the market. This includes criticising the myth that carbon emissions can be regulated by allowing the private sector to trade in them for profit.

Instead, the Greens should argue that the cost of reducing carbon emissions in new energy infrastructure should be borne by the industrial users.

Households already pay ten times more for power than, for example, aluminium smelters do. This will drive improving energy efficiency more effectively than any carbon emissions market because it follows the principle that polluters should pay.

We also need other means of reducing high demand in summer, such as housing insulation and use of photo voltaic cells. These measures can be taken now, subsidised by the government, instead of funding expensive "clean coal" technology.

This would create new jobs in the place of those lost when dirty coal-fired power stations are (inevitably) de-commissioned.

If we force the hand of governments to respond to global warming with these measures as well as mandatory emission reduction targets, and regulation of necessities like energy and water, we should be able to prevent uncontrollable global warming.

Halting privatisation

The Greens and the unions are right to condemn Owen's report. But, so far, there has been little public discussion about doing anything in response.

Ten years ago the Carr government's attempt to privatise the industry were defeated on the floor of the Labor Party conference.

Carr's plans were thwarted by the combination of open union hostility from the ETU, its allies on the union right and the opposition of the left of the parliamentary caucus and the party.

This time round rural jobs and the environmental impact are even bigger questions. This is a real opportunity for the Greens to put themselves at the centre of opposition to the privatisation-to protect unionists' jobs and country centres, and to combat global warming.

The Walk Against Warming planned for two weeks before the federal election will be a great place to bring unionists and Green supporters together against selling off the states' electricity businesses.

The Greens need to be at the centre of the response to Labor's plans. The Greens have a critical role to play by linking up with like-minded people in the community, the unions and the Labor Party and to spark the kind of response that can stop the government's plans.

By Anne Picot