There was an excellent article in Saturday’s Courier-Mail, quoting me towards the end of it, by State Political Reporter, Steven Wardill, on the likely impacts of the proposed leasing out of Queensland’s electricity network assets:
This extract from the article contains some very interesting data:
Infrastructure Partnerships Australia chief Brendan Lyon believes privatisation in Queensland would herald lower prices.
“Queensland’s electricity grid is the least efficient in the country, with network costs increasing 140 per cent in the past 17 years,’’ he says.
“Over the same period, network costs in the privately operated Victorian market have fallen by 18 per cent.”
Predicting lower power prices seems a crazy brave call. But Lyon’s view is echoed in an Ernst and Young report commissioned by the New South Wales Government.
It found that since 1996, the average annual Queensland electricity bill had risen by $932 while in the privatised Victorian network the increase was $743.
I’m unsure if I’d bet that prices would fall, but I would expect that the growth rate of electricity prices would be lower under private management than under the status quo.
The article also includes some observations I made about leasing out government-owned assets on ABC radio last week (ABC radio interview on asset leases):
Economist Gene Tunny this week highlighted how regulation around investment levels and workplace relations will play a key role in what price the Newman Government gets for leasing power distribution assets.
“A lot will depend on what that lease looks like,’’ he said.