Business

Calls for states to privatise electricity networks

Business Council of Australia president Tony Shepherd said the calls for privatisation were consistent with the council’s view that the networks would run better, and cheaper, if owned by private enterprise.
Business Council of Australia president Tony Shepherd said the calls for privatisation were consistent with the council’s view that the networks would run better, and cheaper, if owned by private enterprise. John Farmer

THE nation's peak business body has called on state governments to privatise electricity networks after two major reports urging the sale of state-owned poles and wires this week.

The Productivity Commission released a report recommending the sale of the electricity transmission networks on Thursday, the same day Infrastructure Australia also made the same recommendation in a separate report.

Business Council of Australia president Tony Shepherd said the calls for privatisation were consistent with the council's view that the networks would run better, and cheaper, if owned by private enterprise.

Mr Shepherd said a shortfall in government funding putting more pressure on governments to sell the networks.

While Victoria already has a privatised electricity network, both Queensland and New South Wales still own the networks in those states.

"Government no longer needs to own infrastructure businesses where the private sector is capable of owning and operating businesses in a competitive or well-regulated environment," Mr Shepherd said.

"With the appropriate regulatory oversight the private sector can achieve efficiencies and bring innovative ideas to the table and this will ultimately mean better services and reduced costs to consumers over time.

"Asset sales would also provide government owners with a significant cash injection that can be used to clear the transport and social infrastructure backlog in our cities and regions."

Infrastructure Australia national infrastructure coordinator Michael Deegan said governments needed to explore new finance opportunities and to improve productivity.

"If we are to build on and sustain the living standards of all Australians, governments need to recognise that they cannot bridge the current funding gap," he said.

And despite community concern about privatising such public assets, Mr Deegan said such concerns could be addressed through regulation, despite many of the current problems in the electricity network arising out of problems in regulation.

Reader poll

Should electricity networks be privatised?

This poll ended on 19 October 2013.

Yes - 13%

No - 86%

This is not a scientific poll. The results reflect only the opinions of those who chose to participate.

Topics:  business council of australia, electricity infrastructure, privitisation, productivity commission


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