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Monday, 18 November 2002
Page: 6666


Senator MARSHALL (10:10 PM) —Tonight I rise to inform the Senate about the Brosnan Centre in Melbourne, which recently celebrated 25 years of service to many disadvantaged young people in Victoria. Amongst those young people it offers assistance to are young people who have committed an offence and are in detention or prison and receive little or no support from anyone else. The staff at the Brosnan Centre make contact and establish a relationship with these young people whilst they are in detention or jail and assist them in identifying the support they will need when they are released.

For many young people in this situation, the staff at the Brosnan Centre operate as an alternative family. They offer guidance in managing funds and resources and assist in working towards further education and training, with the goal of achieving employment for young people released from jail or detention. The centre relies upon the continued support of beneficiaries and donations, which enable the centre to offer support and emergency resources such as food, clothing and short-term accommodation. The Brosnan Centre usually operates in deficit, as one would expect with a community based service organisation. This year, it is facing a funding shortfall of over $300,000.

Last year, the youth centre bought a property in Dawson Street, Brunswick from the City of Moreland and shifted its operations to this site. The Brosnan Centre discovered that CitiPower, formerly a multinational company which had its parent company in the US and which is now owned by the Hong Kong Electric Holdings Co., had an electrical substation on the youth centre's property but, however, was not paying rent for the space that it occupied. The staff at the centre were made aware that Optus have a tower in the car park of that facility and pay rent accordingly for the space that it occupies. It was suggested that the centre approach CitiPower to achieve a similar outcome. The centre attempted to discuss a lease with CitiPower, which failed to answer letters and telephone calls for several months.

After several follow-ups, a response was finally achieved. The response from this privately owned multimillion dollar company was a 30-page contract offering 10c a year for 30 years. Ten cents a year for 30 years is a pretty miserly amount after a 30 page contract, and I suggest that it might be the envy of some of the lawyers opposite, particularly Senator Barnett, who today wanted to deprive half a million Victorian workers of the most basic minimum rights enjoyed by all other Australian workers. I would not be surprised if he is out there trying to preselect this lawyer for a Tasmanian Senate seat. The offer from CitiPower of 10c a year whilst it was receiving in excess of $12,000 a year in power charges from the Brosnan Centre is a demonstration of corporate greed to the extreme.

The corporate greed that the multinational corporation demonstrated and the total disrespect and arrogance it showed towards the Brosnan Centre is a by-product of the Kennett government's $30 billion privatisation of the electricity industry in Victoria. The Kennett theory of privatisation was that if left to the marketplace electricity prices would plummet and service standards would rise. Unfortunately, there appears to be a faulty connection between Kennettism and reality. The Kennett government went on a privatisation spree in Victoria that makes Thatcherism look tame. If it could be sold, it was sold. Nothing was sacred; everything from the State Insurance Organisation to the Port of Geelong was sold as Kennett government ministers aimed to fulfil their dream of achieving some sort of ideological orgasm.

For most of the last century, state ownership of the electricity supplies in Victoria was underpinned by the objective of a universal service obligation. For the benefit of the senators opposite, a universal service obligation meant that every citizen in Victoria was entitled to electricity as a utility at a fair and reasonable price. The Kennett government privatised the electricity industry, implementing a user-pays scheme that did away with the universal service obligation. It is a system that only rewards the very high-use consumers and does nothing to encourage responsible and efficient use of the resource. As 80 per cent of the energy is used by 20 per cent of the customers, small customers are not profitable enough to offer price discounts to. This dismisses the claims of the Kennett government that prices would fall. In the early years of privatisation, industrial power costs dropped 30 per cent. However, even power prices for industrial users are back to those of the pre-deregulated days or higher.

There were two major reasons that the Kennett government used for legitimising the privatisation of the electricity industry. Firstly, the SECV was debt-ridden, as it had an estimated $10 billion worth of debt. Therefore, it was claimed that electricity prices were not as low as they could otherwise be because the electricity prices were servicing debt, theoretically pushing the price of electricity up. What the Kennett government neglected to tell the citizens of Victoria was that the SECV was built up from the 1920s on public debt. Its operation and capital investment never cost the taxpayers a cent. Rather, until it was sold, it paid the state substantial yearly dividends and provided the citizens of Victoria with cheap, reliable electricity. Further, if the claim was that the $10 billion worth of debt was pushing prices up then, using the same logic, surely $30 billion worth of investment by private enterprise would push prices up further.

Secondly, the Kennett government promised lower prices, better customer service and greater reliability of supply. What Victorians have received in return, along with those in South Australia who have also had to endure the privatisation experiment, are the highest electricity prices in Australia. These prices can be attributed to the early days of the privatisation of the electricity industry by the Kennett government. Electricity companies like CitiPower are charging Melbourne customers at a far higher rate than Sydneysiders six years after Jeff Kennett declared that the privatisation experiment would cut Victorian electricity bills. Relative prices in Victoria are higher due to the failure of the generating capacity supply to meet demand. There has been no new base-load generating capacity built in Victoria since 1992. The fact that no person or entity is now responsible for ensuring adequate supply to meet demand has led to lack of investment since the Kennett government privatised the SECV in the mid-1990s.

The problem Victorians now face is that the privatised generating companies actually have a vested interest in supply shortages, as this leads to an increase in the price of electricity sold to the power grid. Due to the generation and retailing businesses being sold to different private companies, the higher prices for wholesale electricity have to be passed on to the retailers and to the consumers. Victorians have been left with a complicated, ineffective and inefficient electricity industry. Victorians have had to pay for it. Unfortunately, they will have to continue paying for it. Had it not been for the Bracks Labor government rejecting the private retailers' bid for increases in the power prices from 16 per cent to 19.8 per cent, the consumer would be paying a whole lot more.

The privatisation experiment that was bestowed upon Victorians in many forms through the sale of many service-providing assets has left Victoria less competitive and its residents are no longer protected by universal service obligations that once formed the boundaries these services operated within. Thankfully, this short-sightedness that Victorians were experiencing under the reign of Jeff Kennett has been replaced by the progressive, responsible, long-term agenda of the Bracks government. For Victoria's sake we on this side of the chamber, at least, hope that this continues.

Whilst the state Labor governments recognise that they have an obligation to their citizens to ensure that vital services are not privatised in the hysterical manner that occurred under the Kennett regime, the Commonwealth merely chooses to express concern about the lack of privatising that is currently occurring in Australia. The federal Minister for Industry, Tourism and Resources told senior executives at a national power industry conference in Melbourne in early September that he was concerned that the states were showing signs of `reform fatigue', as the states were becoming increasingly reluctant to privatise their electricity supply industries.

The example of CitiPower not paying rent to the Brosnan Centre at a fair and reasonable level is a demonstration that multinational companies that are supposed to service Australians with essential services are more interested in sending profits back to their parent companies overseas than meeting the costs of running their businesses in Australia. I implore the government to examine the privatisation experiment in Victoria before it races off to sell one of the biggest service providers in Australia: Telstra.