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Asset Privatisation

Published on: November 2022

Record: HANSARD-1323879322-129057

Asset Privatisation

Mr MICHAEL DALEY (Maroubra) (16:58:10):

I move:

That this House:

(1)Notes that the Premier described privatisation as the "golden key".

(2)Notes that the finance Minister said regarding the New South Wales Government's privatisation agenda that "we have done it successfully, and we will continue to do it successfully".

(3)Notes that the New South Wales Government has sold or privatised $93 billion worth of New South Wales taxpayer assets.

(4)Notes that the New South Wales Government's privatisation agenda has resulted in higher costs, reduced services and undermined the State's balance sheet.

(5)Calls on the Government to rule out the further privatisation of revenue-generating publicly owned assets.

Privatisation is one of the great economic lies of our times, and its greatest exponent is this current Government. It is a guaranteed way to privatise profits and socialise losses. Under this Government's privatisation model—like with all of them—it is the ordinary person who gets clobbered and keeps losing out. All of the burden is placed on ordinary, downtrodden working people and their families. This Government has privatised like none before it. It is the great exponent of this lie and its members are the most successful thieves in the history of this State.

Privatisation proceeds on many lies; for the benefit of members, I will go through some of them. This week members have listened to the Premier during question time trying to defend the indefensible. Privatisation presupposes an endless supply of publicly owned, revenue-generating assets to keep selling. Those opposite have sold a hell of a lot—some $93 billion worth—but I will get to that in a minute. They will run out eventually. The second lie that privatisation proceeds upon is that if you recycle—and what a grand euphemism that is; let us just say "sell" or "flog off"—there is only an upside. The "golden key" unlocks wealth and riches trickle down. When those opposite talk about unlocking assets it suggests that those assets are trapped and unproductive in the first place. That is not true.

Privatisation merely brings forward into net present value all the revenue from the future. It is theft from our children. Trickle-down economics is the greatest lie. In the best of times, the privatisation model of this Government merely moves the economic benefit. In bad times, it deprives ordinary citizens and their children of what is rightfully theirs. In the worst of times, it delivers waste on a grand scale. Make no mistake about it: For 12 long years we have been in—and remain in—the worst of times. This Government has sold $93,551,000,000 worth of productive assets. Those sales have been attended by waste, blow-outs and mismanagement now approaching nearly $25 billion. That is thievery on a grand scale.

Let us look at some of those sales. The Government sold Liddell Power Station, only for AGL to announce that very day it had effectively, in its valuer's eyes, acquired that asset for nothing—for zero dollars. It was gifted to AGL by the New South Wales taxpayer. Then a few years ago we had the Federal and State Liberal parties talking about using taxpayers' money to pay AGL and its successors to keep the power station open for longer. Vales Point sold for $1 million; its private owners sold it for over $200 million. The Government sold Eraring for $50 million and then tried to buy it back for $239 million. It sold off electricity transmission assets only to watch prices skyrocket immediately. It tried to inflate the price of our ports through anti-competitive and illegal secret deals, and our taxpayers will have to pay hundreds of millions of dollars to unwind it—perhaps, because that is not the end of the story.

I do not want to pick on ports, but they are emblematic. In its final year of trading as a government enterprise, Port Botany's revenue was $220 million. The Government sold it for $4.3 billion. Multiply $220 million net revenue a year by 99 years—and what did they get for it? Some $4.3 billion. When the golden key was put into that transaction, what did this beautiful, big, revenue-raising, publicly owned asset of Port Botany translate into? Three-quarters of the $4.3 billion went into a $3 billion light rail. That is absolutely comical. Those opposite have converted a port that was making money into a loss-making, revenue-losing asset: A giant caterpillar that snakes its way into the city. There is no trickle-down, just a loss-making disaster that moves at the pace of a trickle.

The people of the electorates of Maroubra, Coogee, Heffron and those in the Hunter know all about privatisation. We remember the Premier completely ruling out any further privatisation prior to the last election. Within weeks of the election, the buses were going to be sold. We predicted then what would happen when the buses were sold: The services would get worse, the routes would be changed, there would be fewer drivers and their conditions would be denuded. All of that came true. The people of the eastern suburbs, the Hunter and the inner west are living that horror story every day. We used to love our buses before they were privatised, but not now. The only people who are happy about it are the Premier and the Treasurer because they have saved money.

Time expired.

Governments are not here to save money; they are here to deliver services. No-one would have thought that in 2022 the eastern suburbs would have worse bus services than it had a century ago—because the Government sold the services. The people of Australia just got rid of a Prime Minister who people such as Mike Carlton on Twitter used to refer to as Smirko. The current Premier is Smirko version 2, the smiling sorcerer, the smirking sorcerer. He talks about privatisation now because, with an election looming, there is more on the way—hospitals, trains and water. What will be next? []

Mr DAVID ELLIOTT (Baulkham HillsMinister for Transport, Minister for Veterans, and Minister for Western Sydney) (17:05:19):

— The hypocrisy coming from the member for Maroubra is breathtaking. But I congratulate him on his transition. He has changed sides. He is now batting for a different side, and I congratulate him because he did that under the cover of darkness. I remember in 2008 when Premier Morris Iemma put the member for Maroubra and me on a committee to advocate for the privatisation of electricity. The sole responsibility of that committee was to advise a Labor Government on how to best message the electricity privatisation sale. In 2008 the former member for Murrumbidgee said, "The member for Maroubra must have staked his political future on privatisation", not in opposition to it but as a fierce advocate for selling off State assets. That was you, Michael. So much so, that back in August 2008 the member for Maroubra, the very same man who has moved this motion today, was compelled to stand up in this House and congratulate then Labor Premier Morris Iemma on his "willingness to do what is right for the people of NSW". Labor might sit there in Opposition and advocate for public assets and public ownership, but when it is in government it does exactly the opposite. We remember that debate in 2008. Michael Daley, the member for Maroubra, stood up in Parliament and said—

Dr Marjorie O'Neill:

Point of order—

The ASSISTANT SPEAKER:

The Clerk will stop the clock. I will set a precedent and will hear the point of order.

Dr Marjorie O'Neill:

My point of order is that the Minister should refer to members by their correct title and not by their name.

The ASSISTANT SPEAKER:

That is in accordance with the standing orders, as I am sure the Minister knows.

Mr DAVID ELLIOTT:

The member for Maroubra used to advocate, "What is right? Privatisation is right." We have heard hypocrisy from the member for Maroubra today. The member for Maroubra and the Labor Party were fierce advocates for selling State assets. Do not take my word for it. This is what the member for Maroubra said on the topic of asset privatisation: It is "what is right for the people of New South Wales." He also said that it is "necessary to secure the State's future" and "projects are at risk because the Leader of the Opposition, the leaders of the Liberal Party and The Nationals will not support the electricity privatisation legislation". Today he criticises us for supporting electricity privatisation in order to recycle assets. But back then, before his conversion on the road to Damascus, before his transition, he criticised us for not supporting privatisation. He also said—and this is my favourite—"the world will fall apart if the electricity system is not privatised tomorrow". A Liberal Government did it, and we are still here. He is obviously aware that the world did not fall apart because not only did we privatise it, we recycled assets.

What did Labor say about the sale of State assets? It said, "Bring it on". It encouraged us to do it. The member for Maroubra said, "It will secure our economy". He knows deep down in places where he does not want to go that this policy is right for the taxpayers of New South Wales. When the Liberals opposed Labor's bill to sell off the assets, he said it was a dark and disappointing day. He said that the whole world was going to end because we would not privatise these assets. I cannot believe that in 2022, of all the people in the Labor Party, they put up the member for Maroubra in this Chamber, the very man who sat on a committee with me to privatise electricity assets in this State under a Labor Government.

The member for Maroubra complained about private buses in his electorate. This State has had private buses for 100 years and no Labor Government in 100 years has tried to change that. His party has not said to a private bus company, "We will buy you out. We are going to nationalise the buses." I am horrified that the people of New South Wales would even consider the advocacy of those opposite when quite clearly, right now, here today, we have heard nothing more than criticism. And I have not even touched on the Qantas debate and his great mentor Paul Keating. What a great liberal Treasurer he was. Qantas, the Commonwealth Bank, you name it, Federal Labor sold it. They sold it, knowing full well it was right for the people of Australia. It was good value for taxpayers. Now Labor stands condemned for its hypocrisy.

Dr MARJORIE O'NEILL (Coogee) (17:11:01):

I support the motion moved by the member for Maroubra. Paragraph (5) states:

(5)Calls on the Government to rule out further privatisation.

Even if the Government had the guts to support this motion, it cannot be trusted. Just before the last State election, then Premier Gladys Berejiklian said there would be no further privatisation. Butter would not melt in her mouth. But after the election, assets were sold as far as the eye could see and our buses were next. Since the Liberal‑Nationals Government was elected, $96 billion of assets have been sold, with the sale of those revenue‑making assets that fed the coffers of New South Wales now ensuring that New South Wales is in debt. As the member for Maroubra said, every day people are paying the price. We know that every time public assets are privatised, profits come before people, shareholders come before communities, and it is the everyday people who lose out.

Privatisation is bad economics. It is even worse policy, and it undermines our communities and our public services. Privatisation of public assets has reduced our social amenity right across New South Wales. Electricity privatisation has been a nightmare. Turning on lights costs people an arm and a leg. In the western suburbs electricity is so expensive that people ignite fires in their home and almost burn their house down because it costs so much to turn on a heater. It is appalling. In 2012 the Government sold off the desalination plant, privatising water. Water is an asset and a utility that people need every single day in order to live their lives. When we turn on our taps, an overseas teachers' plan gets the money, rather than New South Wales coffers being filled.

More than 60,000 people in the eastern suburb signed petitions against this Government's privatisation of buses. In response, 31 bus routes were removed and over 50 bus stops were ripped out. People are unable to access health care, unable to get to school and unable to access friends and family. Elderly and disabled people are isolated. Not a day goes by when my electorate office is not contacted by people who cannot catch a bus. Buses are cancelled every single day. Bus drivers are leaving their jobs because the employment standards are worse under the private provider than they were when they were working for the State. People have been forced onto the light rail. Their commutes have doubled—and that is if it works. On average, the light rail breaks down at least twice a week. Commutes have lengthened.

Privatisation never works and is never better for our communities because profits come before people, and that is embedded in the Corporations Act. The job of private companies is to put profits before people and our communities lose out. The privatisation of our valuable public assets has reduced our social amenity. Social housing is being sold off and privatised in the eastern suburbs. There is a 15‑year waitlist to get into social housing in my electorate, including for those on priority lists such as women escaping domestic violence, living in their cars, unable to access a home. Rather than investing in social housing, the Government is selling it off and privatising it. But even if it supported social housing, the Government cannot be trusted. Government members would sell their mothers' silver if they could. If the Government is re‑elected next year, more privatisation will come. Will the trains be privatised, or the ferries? Will there be more social housing? We know it is coming.

Mrs MELINDA PAVEY (Oxley) (17:16:10):

The member for Maroubra asked about the benefit of—

Mr Michael Daley:

Don't say the word.

Mrs MELINDA PAVEY:

—leasing Port Botany for 100 years. I did not interject on you. Every year in New South Wales at least 50 people are alive because they were not killed on the Pacific Highway. That is what putting money from privatised assets into infrastructure can achieve. Former Deputy Premier Andrew Stoner did the deal with Premier O'Farrell at a time when we were at risk of stopping work on the Pacific Highway. Privatising one-third of that asset ensured that we could continue working on the Pacific Highway. Back then we had a 50-50 arrangement with the Commonwealth Government and Anthony Albanese as infrastructure Minister, and then in 2013 Warren Truss became Leader of The Nationals and Deputy Prime Minister. Those events have saved at least 50 lives every year on that road. That is what recycling assets does.

The member for Baulkham Hills completely blew the member for Maroubra out of the water. To think this is the best Labor can offer the people of New South Wales in our second last sitting week—rhetoric and lies about what it has or has not done on asset recycling to ensure the future of this State. Today we went through the 2011 budget papers to find out what Labor's infrastructure spending was in its last year in office. Guess what? It was so bad the number was not even in the budget papers. To this year the Government has spent $112 billion on infrastructure. All we had from Labor in government, and it cannot just blame the GFC—

Mr Michael Daley:

It was fairly significant.

Mrs MELINDA PAVEY:

It was an impact, but compare nil investment versus $112 billion. There was a $30 billion backlog. How many projects did Labor cancel and not proceed with? We have leased assets responsibly; they are still owned by the people of New South Wales. But it is better to utilise that income to create more jobs and opportunities. Leasing Port Botany kept the duplication of the Pacific Highway moving at pace. Those works now save 50 lives a year because the highway was duplicated the entire way. We have to build the Coffs Harbour bypass and there is money in the budget to make that happen. We must also build the Hexham bypass and planning is underway. Now we have turned our attention to the Princes Highway, which has a similar fatality rate. We are also improving the Great Western Highway. That is what recycling assets does. It is nothing to be ashamed of, and the member for Maroubra should be honest about that. He supported Premier Morris Iemma in his wish to deliver a better outcome for the people of New South Wales by recycling electricity assets, which the Coalition did later, and that has also benefited the people of New South Wales.

Selling Snowy Hydro to the Commonwealth has provided an incredible boost to regional and southern New South Wales. Some of those proceeds went into the Future Fund. They will continue to help people across the whole of this State, particularly in the regions. The Nationals are strong in the regions because over the past 12 years we have spent a record amount of money to catch up on Labor's 16 years of neglect. I go back long enough to know of our plan in 1995 to make significant investment after the Olympics if we had won government. We had a post-Olympic investment plan for regional New South Wales. What happened? We did not win the election and nothing happened in regional New South Wales. That is a fact. That is what happened and that is why the people of regional New South Wales are grateful. They expect this type of infrastructure. We recognised that there was a lot to catch up on, and constituents in Labor electorates have benefited from that infrastructure. The member for Port Stephens knows it but she never talks about it. There has been significant investment across New South Wales because the Government has recycled assets and treated New South Wales professionally.

Mr RON HOENIG (Heffron) (17:21:22):

The sale of monopoly government assets does not work. It never has worked; it never will work. It is extraordinarily unpopular and the people of New South Wales have worked the Government out. Call it asset recycling or call it the golden key; it does not make any difference. It does not work because, firstly, people do not want their assets sold; secondly, they understand the Government is selling monopoly, revenue‑generating assets; thirdly, they know the Government is foregoing revenue; and fourthly, the Government is handing over super profits to the private sector, which effectively earns far more than the Government. The tragedy is that in 2011 the former leader of the Liberal Party, His Excellency the High Commissioner of India, used a clever political election strategy to sell off as many assets as he could to put money into infrastructure so that he could get two terms in government in a State that he considered to be a Labor State and say, "After 16 long years of Labor, we are getting on and building things in New South Wales."

The problem is that none of the infrastructure projects in which the Government has invested that money work. None of the Government's privatisation proposals work. They were all lemons that resulted in the State being ripped off. They demonstrate what happens when one allows the private sector to run a monopoly. It has been an embarrassment. Who remembers when the Government sold off the desalination plant in 2013 for $2.3 billion? As a result, the New South Wales Government must pay $500,000 a day to keep it on standby. The Government is locked into paying $10 billion over the next 50 years to the owners of the desalination plant just so that it can be made available. Even the minor attempt at privatising Stadium Australia resulted in the Government paying $220 million to buy it back.

Embarrassingly, the Government sold Vales Point for $1 million and the private owners who purchased it onsold it for $200 million. It sold Eraring for $50 million and then tried to buy it back for $239 million. In the sale of the electricity assets that it had a mandate to sell—because Mike Baird did take it to an election—those who acquired those assets were not kept under any control by the State and have made super profits at the expense of the citizens who have to rely upon the supply of those services. WestConnex was sold off—a road initially announced at $10 billion to service Port Botany, has now cost the Government $23 billion and does not go anywhere near the port. The Government has not got back what it paid for it. And because people cannot cop anymore tolls, the Government has recently had to commit $520 million over the next two years to provide toll relief. Effectively, it is providing relief to citizens who are paying the private sector.

The inflated sale price of Port Botany and Port Newcastle was probably the worst example of privatisation in the history of Australia. The deeds of arrangement were kept secret so that not even the Cabinet got to see them. The member for Lake Macquarie is trying to unwind that arrangement with the Port of Newcastle, but the Government has no idea how many billions of dollars the State is going to be liable for in respect of it. The political decision to go through this cash splash is going to bite the Government of New South Wales for decades to come. It is a pretty poor history. If it had been done properly, then at least it could have implemented its philosophy. But the Government has not done that at all.

The ASSISTANT SPEAKER:

Before I call the member for North Shore, I welcome to the gallery a former mayor of Randwick, Chris Bastic. Welcome to the Legislative Assembly for this public interest debate.

Ms FELICITY WILSON (North Shore) (17:26:44):

Every single day across this State people in our community have to figure out how to make tough decisions about funding their needs. Tough decisions about paying for the costs of living, supporting their family, supporting their kids, and trying to get a roof over their head. They have to make tough decisions about where to find the money to put in to their needs. Those are the kinds of things that governments have to do. It is quite disappointing in this House today that we have people on the other side who think that they are ready to take over the chequebook of New South Wales. I do not know to what extent they are capable of managing their own money, but what they demonstrated today is a fundamental lack of understanding about the notion of infrastructure, meeting the needs of communities and how you deliver it.

I think it is quite telling, that three neighbouring MPs from the eastern suburbs of Sydney have come here and criticised the notion of a privatisation agenda. In his reply I would like the member for Maroubra to tell us what those eastern suburbs Labor MPs would like to do? Would they like to can the almost billion dollars of investment into the Prince of Wales and Sydney Children's hospitals? Those hospital upgrades, delivered through asset recycling undertaken by this Government, save lives every single day. Would they like to scrap the light rail? They talk about extending it and loving it sometimes, and hating it at other times Do they want to reduce public transport services for their community? Or—I know this will not be popular with the new member for Coogee but—do they want to scrap Allianz Stadium? That major events and sporting precinct is revitalising Moore Park and we know the member for Coogee likes to enjoy the hospitality there. Maybe her neighbouring members would like to see it scrapped.

Governments have to deliver outcomes for community. We have to deliver economic returns for community. We have to deliver public transport, roads, hospitals, lifesaving and life building infrastructure. Those opposite have never been able to deliver that, which is why they come to this place with hypocrisy and attack the model of financial turnover that we utilise to ensure we are delivering what this community needs. When they can tell us what they want to take away from their own community, then they can reconsider the way in which we manage funds. The big problem here is they do not just want to take away from the eastern suburbs and their own voters, they want to take away from the rest of us.

They went to take away the lifesaving infrastructure the member for Oxley spoke about. The number of lives saved on the Pacific Highway, the investments in the Princes Highway, the investments up and down the New South Wales coast, things that not just change people's lives but save them. They want to take away everything that has been delivered. They want to take away the 200-plus schools that have been upgraded, the billions and billions of dollars in our hospital system, the record number of new and upgraded hospitals from every single voter across New South Wales. That is what happens when you do not manage your money. That is what happens when you elect people like those opposite who do not understand that money has to come from somewhere. Although the member for Coogee wants to talk about selling off her mother's silverware—it is nice that she has enough of a silver spoon that she has silverware to sell off—most of us do not have that capability. We have to find equity to invest.

Those opposite showed us through their 16 years in government that they could not find any equity. They promised over and over again—

The ASSISTANT SPEAKER:

The member for Coogee will come to order.

Ms FELICITY WILSON:

They promised over and over again that they would deliver infrastructure. They promised twelve rail lines and delivered half of one. They lost billions of dollars of the State's money in failed contracts and failed projects—money that could have been put into the type of infrastructure we produce that creates additional revenue and money for us to put equity into new infrastructure projects. Those opposite have clearly run out of ideas. They are coming towards the end of the sitting year and they have repeated the topic from their last public interest debate. They are attacking the notion of privatisation without understanding it is where we get the capital to drive investment for New South Wales.

It is the kind of cheap sloganeering that we get from the Leader of the Opposition all the time, but this is not Twitter. The Parliament of New South Wales is not Twitter. We need to be sensible adults and make tough decisions that deliver outcomes for the people of New South Wales. Our record is proven on this. We have a clear record of a pipeline of more than $100 billion of vital infrastructure—schools, hospitals, roads across the State for the benefit of all people of New South Wales. It is only through the asset recycling program that the Government has been able to undertake the sophisticated economic management that takes the capital that is tied up in these assets and delivers it for future community benefit. We know what they are promising opposite. They are promising more years of failing to deliver for our community.

Mr MICHAEL DALEY (Maroubra) (17:31:52):

In reply: The teals will not have much work to do in North Shore if that speech is any indication. I begin by thanking the member for Oxley, who I enjoyed debating again for maybe one last time.

Mrs Melinda Pavey:

You were not at the Kempsey Cup.

Mr MICHAEL DALEY:

I will be there on the 26th. The member for Oxley is a nice person. She is respected and will be missed. She has a legacy to leave. I wish the member for Oxley well in her retirement. Unlike her colleague the member for Baulkham Hills who lacks all of those features and spent his whole time looking in the rear-vision mirror. Falling apart was the theme of his speech. The only thing that is falling apart is his political career. In four and a bit sitting days' time when we look in the rear-vision mirror, we will see him and it will be a small sight. We will not have to drive very quickly because he does not leave any legacy except comical acts, spite, vitriol and not much else.

Did he offer defence of privatisation? No. Did he deny there had been $25 billion worth of losses due to waste and mismanagement? No. Any evidence that the conversion of Port Botany into a light rail was a good transaction? No. Any evidence that the bus system in our area having been privatised is better? No. Did he offer any evidence that the privatisation of energy supply kept prices down? No. Any evidence that private energy companies making super profits have not benefitted at the expense of families? No. Any denial that Sydney Water is safe? No. Did he offer any guarantee to the people of the Hunter that they would not try and privatise Hunter Water if they get their hands on it if they are re-elected in March of next year? No. Did he offer as a Minister of the Crown any guarantee, any safeguard, any security to the people of the Central Coast that their publicly owned Central Coast water assets would not be thieved, pilfered, pinched and flogged off like other assets that they have flogged off in the last 12 years if they are re-elected in March? No. Was there any guarantee that our currently publicly owned hospitals will be kept wholly and solely publicly owned—remembering as I do, having been a member of this House for quite some time, that this Government tried that one before?

It was some brave whistleblower who leaked the fact before the last election that the Government was planning to privatise five publicly owned hospitals. No, there was no mention of that by the member for Baulkham Hills—or, indeed, by anyone else. The member for Coogee spoke about social housing. The Government says it privatised $93 billion worth of assets and turned them into other assets, but there was not a cent of new money for social housing. Shame on this Government! If the Government gets re-elected, it will be just more of the same.

The ASSISTANT SPEAKER:

The question is that the motion be agreed to.

The House divided.

Ayes35

Noes41

Majority6

Motion negatived.