Australia: Labor strikes deal with Liberals to push through NSW power privatisation

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WSWS : News & Analysis : Australia & South Pacific

Australia: Labor strikes deal with Liberals to push through NSW power privatisation

By Noel Holt
19 June 2008

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New South Wales Premier Morris Iemma announced this week that his government had finalised a deal with the Liberal-National Coalition to allow the $15 billion privatisation of the state’s electricity generating industry.

The deal ends weeks of speculation that the enabling bills for the sale were facing rejection because a number of Labor MPs had threatened to cross the floor of parliament.

The Coalition had previously endorsed the privatisation proposals in principle but had called for an auditor-general’s review of the structure and timing of the sale, including the impact of the global financial crisis on the quality of the bids expected from major companies.

A bill allowing the auditor-general’s inquiry to proceed will now go to parliament before it rises for a winter recess on June 26, and a report is due to be finalised by September, together with a report on the impact of privatisation on rural consumers.

Iemma and Treasurer Michael Costa triumphantly declared that the government’s privatisation timetable remained on track, with the assets expected to be on the market by the end of the year. Costa asserted that Liberal-National backing for the privatisation had been inevitable all along, because of the Coalition’s support for private enterprise. “This was always the way it was going to proceed,” he crowed.

Seeking to placate deep-going concerns within the National Party’s rural-based constituency over the impact of privatisation on prices and services in regional and rural areas, Coalition leader Barry O’Farrell played down the deal, describing it as “an agreement to put the public interest first”. In reality it has nothing to do with “public interest”. Both O’Farrell and Iemma have been under increasing pressure from big business to push the sale through as quickly as possible.

Brendan Lyon, a spokesman for Infrastructure Partners Australia, a lobby group for major privatising and contracting companies, immediately welcomed the agreement. He called for “a well structured and speedy resolution” in order to “harness billions in private investment” and “reform the energy market as soon as possible”. Lyon added: “Further delay would be unwelcome.”

The bipartisan deal has revealed the utter political bankruptcy of the so-called anti-privatisation campaign of Unions NSW, the state’s peak union body, and the Labor “lefts”. For months, union and Labor officials have been urging electricity industry and other workers to hold off industrial action on the basis that the sale would be blocked by dissident MPs.

Responding to Iemma’s announcement, Lynda Voltz, one of the upper house MPs publicly claiming she will vote against the legislation, told the Australian Financial Review: “If Morris [Iemma] wants to make deals with the Liberals, that’s up to Morris.” In other words, there will be no move against either the premier or the treasurer for striking a pact with the Coalition, even in defiance of an overwhelming vote at the Labor Party’s own state conference on May 3 to reject the privatisation.

Ever since Iemma announced the power sell-off last December, Unions NSW has worked to contain the widespread public opposition to the sale within the framework of limited protests to pressure MPs to vote against it.

The unions have been preoccupied with preventing a broad industrial and political movement of working people that would inevitably come into open conflict not only with the Iemma government but also the federal Rudd government, which supports the electricity sell off as part of the new wave of free-market restructuring it has pledged to big business.

The unions have kept industrial action by power workers to a bare minimum, claiming that if “the lights went out” they would lose public support, even though opinion polls have recorded 85 percent of the state’s population opposed to the privatisation. The unions hoped to use this opposition as leverage in negotiations with the government to secure their own future in any privatised set up.

Iemma and Costa, however, made clear they would press ahead regardless of either popular sentiment or the 702-107 vote at Labor’s conference explicitly rejecting the sale. Negotiations with the unions and Labor Party officials to avoid a confrontation eventually broke down.

Responding to Iemma’s deal with the Coalition, Unions NSW secretary John Robertson declared: “They’ve (Iemma and Costa) demonstrated how desperate they are to sell electricity by negotiating with the opposition,” adding, “It’s a very sad day when we’ve reached the point when Morris Iemma is more inclined to negotiate with the Coalition.”

Robertson’s “anger” is completely manufactured. Just days before, Unions NSW and the power unions had hastily convened a meeting of power workers on the NSW Central Coast where a bevy of National and Liberal MPs sat alongside so-called dissident Labor MPs and union officials on the platform.

One by one, the MPs were handed the microphone to declare their opposition to the power sell off, with one calling on workers to “keep the pressure on the other members of parliament,” while another said, “Your campaign is working, keep the emails coming and the pressure on.”

At the meeting, Unions NSW assistant secretary Matt Thistlethwaite claimed that the unions’ pressure campaign had succeeded in securing the support of the Coalition and numbers of Labor MPs, and the bills would therefore be defeated.

To ensure the lowest possible attendance, workers were informed of the rally just one day beforehand and only around 400 out of more than 1,700 power workers turned up. They were also not told that the real purpose of the gathering was to vote on a union motion to lift overtime bans, which had been imposed just weeks earlier at mass meetings.

The overtime bans were just beginning to bite. According to one media report, the state’s power industry “stood on the edge of a crisis” and some “electricity generators stood idle, unable to be repaired because of anti-privatisation overtime bans”. The report claimed that one-third of the state’s peak power was being supplied from interstate.

On June 5, Unions NSW spokesman Peter McPherson told a hearing of the Industrial Relations Commission (IRC) in Newcastle that Delta Electricity’s Vales Point and Munmorah power stations were shut [due to bans], while one of two units at Wallerawang near Lithgow had broken down.

McPherson told the IRC that union officials had visited power stations but workers had refused to “even consider” lifting the bans. IRC deputy president Rod Harrison then “strongly recommended” the lifting of the bans at the affected power stations and “directed” workers at other stations “to consider” lifting them.

Before ramming through the union’s recommendation to end the bans, Thistlethwaite told the Central Coast meeting that, having won the support of the politicians, workers should not “jeopardise” this backing by taking industrial action. Even so, the vote was close, demonstrating not only the extent of hostility to politicians of all stripes but a growing distrust of the unions’ campaign.

This sordid charade demonstrates once again that the unions and Labor “lefts” are neither willing nor able to lead any genuine campaign against privatisation or any of the other attacks being prepared against the working class. The unions are totally committed to heading off any movement against the Iemma and Rudd governments, even as these governments carry out ever more open pro-business policies in partnership with the Liberals and Nationals.

Power workers and all working people need to draw political lessons from these experiences. The time has come to break decisively with the moribund pro-business unions and begin to organise a broad political and industrial campaign, not only to stop the power sell off but to challenge the entire pro-market agenda of the state and federal Labor governments.

Such a campaign requires a socialist perspective, aimed at the complete reorganisation of society in the interests of working people, instead of the private profits of the corporate elite. The government-controlled public utilities, which are essential to meet the needs of masses of people in a complex, modern society, must be placed under the democratic control of those who work in them and of the working class as a whole.

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Australia: Labor strikes deal with Liberals to push through NSW power privatisation

By Noel Holt 19 June 2008

By Noel Holt
19 June 2008