Legislative Assembly for the ACT: 1998 Week 8 Hansard (27 October) . . Page.. 2295 ..
MR CORBELL (continuing):
Mr Speaker, let us look at the facts. Let us look at what privatisation has meant in other jurisdictions. I will cite two clear examples. The first is in relation to Victoria. As I am sure all members are aware, Victoria has a privatised electricity retail, distribution and, indeed, generation network. It was privatised by the Kennett Government in around 1994-95. It was a staged process. Mr Speaker, in Victoria the rate of blackouts, power outages and power failures has increased under private ownership. The Office of the Regulator-General, which is the regulatory body in Victoria, has outlined the fact that the average time off supply - that is, during power failures or outages - per customer, per year in Victoria has increased from 207 minutes in 1995 to 218 minutes.
On top of this, Mr Speaker, it is interesting to look at what occurred in Melbourne. In Melbourne there are now three privately-owned power distribution and retail companies. They each share a third of the city of Melbourne. The off-supply averages - that is, the number of power failures, blackouts and times when customers were off supply - of two of the three companies that supply power in the privatised market in Melbourne have increased. They have increased, Mr Speaker, to rates of 112.5 and 170.2 minutes per customer, per year, on average in Melbourne.
What is even more illuminating, Mr Speaker, if you will excuse the pun, is that in 1993, which was the last year of public ownership, the State Electricity Commission of Victoria achieved an off-supply average of 70 minutes per customer, per year. Let us compare those figures. Under public ownership, the average amount of time that any customer in Melbourne was off supply was 70 minutes per year. Under private ownership, the average time a customer was off supply was 112.5 or 170.2 minutes per customer, per year. For a third of the city of Melbourne, the rate of power blackouts was double. In fact, it was over double. It was about 11/2 times more than the rate provided by the publicly-owned State Electricity Commission of Victoria. Those are the facts, Mr Speaker. They speak for themselves and they are uncontested.
Why does this occur? Why is there this difference? We will continue to point out in this debate that the difference is that privatisation leads to one very important factor. It leads to the private owner of an organisation wanting to increase their profit margin. The most obvious way to increase their profit margin, their return on investment - which is what any private sector company is out there to do - is to reduce their overheads. Reducing overheads means reducing staffing levels. Reducing staffing levels means reducing maintenance levels. Is it any wonder that the number of power blackouts in a third of the city of Melbourne has increased 11/2 times?
Mr Speaker, we need only to look at the level of employment in Melbourne under public and private ownership. Prior to privatisation, the State Electricity Commission of Victoria employed approximately 12,000 people. After privatisation, it employed 6,000 - a 50 per cent reduction. Is it any wonder that maintenance goes down? Is it any wonder that the number of blackouts goes up? We are not talking about a service which a lot of us can live without; we are talking about a service that, for a lot of people, is an essential service and needs to be provided in a reliable fashion. That has certainly not occurred in the Melbourne experience.