Victorian bushfires highlight the folly of electricity privatisation

Jeff Sparrow, editor of Overland writes (for crikey.com.au):

Arsonists, says Kevin Rudd, should rot in prison. But who will be punished if the pending law suits find private power companies liable for the fires in Kilmore East, Horsham, Mudgegonga and Dederang?

Why, you will, dear reader -- thanks to the terms that state governments negotiated when they sold off our public assets. Consider the case of SP AusNet, the subject of a class action for negligence around the Kilmore fires.

The Insurance Council of Australia has estimated the damage of those fires at about $500 million. But SP AusNet's legal liability has been capped at $100 million under a deal struck by the former Kennett government with private utility operators, when the former State Electricity Commission was privatised in 1995. Legal sources said this
meant the Brumby Government could be forced to cover a shortfall of hundreds of millions of dollars.

The recent heatwave highlighted some other results of the great privatization binge carried out a decade or so ago.

Connex, the group that seized Victoria's rail network, recently excused the 2300 services it cancelled last month on the basis of ... wait for it ... the weather. Its trains can't, you see, function in weather warmer than thirty-five degrees. Given that each year there's this phenomenon called "summer" (you may have heard of it), operators of a transport system designed for the benefit of the public -- most of whom, strangely enough, still have to work on hot days -- might conclude that cool-weather-only trains simply don't cut it.

But Connex, of course, is a private company, and makes its decisions on the basis of an entirely different calculus. That's why, though Melbournians would clearly prefer to buy their fares from a conductor, we're stuck instead with dysfunctional ticketing machines, unable in most cases even to provide change. Not surprisingly, there's now a widespread culture of fare evasion, which the private owners attempt to counter with hectoring advertisements and roving gangs of thuggish inspectors.

But there's a bigger issue relating to climate change. Now, we don't have to believe in global warming. The science is complex and most of us don't fully understand it. But many of us are also sufficiently mathematically challenged as to not follow the process by which Eratosthenes of Cyrene first calculated the circumference of the planet. But we don't therefore sign up with the Flat Earth Society, since we possess sufficient common sense to accept the consensus of the scientific world.

If we adopt that methodology with climate change -- aligning ourselves with the vast majority of scientists rather than the small but shrill denialist faction of oil-company flacks, shock jocks and the tabloid journalists who are professionally wrong about everything -- certain things follow. We can expect a small but real increase in average temperatures, and that means bushfires will become more likely and more devastating. No, you can't ascribe the blame to climate change for any particular fire, just as you can't definitively link your heart attack to your pack-a-day habit. Heart problems kill non-smokers, too -- but only a fool would conclude that means you can puff away without risks.

In other words, if we don't do something, we can expect more tragedies like the one we've just endured.

But that brings us directly back to privatisation. It's not only that the process by which we swapped our public assets for a bag of magic beans has led to an appreciable degradation in services, it's also disarmed us in the fight against the causes and consequences of climate change.

How is the private company that makes money from selling you electricity -- and thus becomes more profitable the more of it you use -- going to foster energy efficiency?

The short answer is that it will do so about as effectively as, say, a pub campaigning for sobriety, a casino against problem gambling -- or, to use a more apposite example -- the private utility in charge of our taps for water efficiency.

The world financial crisis has already exposed many of the ideologues behind the neo-liberal excesses of the last decades as at best charlatans and at worst overt fraudsters. By all means, prosecute the arsonists. But let's also have some genuine accountability about the policy makers who got us into the mess we're now in.