Last week, Maria Hatzakis interviewed me for the Queensland edition of the 7.30 Report, which aired on Friday night:
In understanding why the sale of electricity assets is desirable, the Productivity Commission’s Electricity Network Regulation Inquiry Report from last year is instructive:
While governments have a legitimate role in owning and operating many services in Australia, the rationale for state-ownership of electricity network businesses no longer holds. This reflects the development of sophisticated incentive regulations that function best when the regulated businesses have strong cost-minimising and profit motives… (from page 24)
…There are strong arguments for privatisation of these businesses. There is no evidence that the productivity, reliability, quality or cost performance of private sector electricity network businesses is worse than their public sector equivalents. To the contrary, the evidence in Australia and internationally suggests that such private sector enterprises are more efficient. (from page 25)
Hence, privatisation would most likely result in lower costs and prices for consumers (relative to what they would otherwise be). In my view, there is a strong case for selling Energex and Ergon as well as the generators and Powerlink.