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Iemma must stand firm on privatisation push: -

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Iemma must stand firm on privatisation push: Kennett

The World Today - Monday, 5 May , 2008 12:10:00

Reporter: Emma Alberici

ELEANOR HALL: Former Victorian Premier Jeff Kennett has warned the New South Wales Premier Morris
Iemma that his determination to push ahead with electricity privatisation will cost him his job.

Mr Kennett faced down unions in his state to push through electricity privatisation there more than
a decade ago and he is urging the NSW Premier to do the same.

But, unlike Mr Kennett, the NSW Premier is from the Labor Party and, while he is remaining defiant,
he will face another showdown from his party tomorrow.

And already one member of the caucus, Upper House MP Ian West, has warned the Mr Iemma to come
prepared to negotiate.

IAN WEST: Any Labor member of Parliament who doesn't pay due respect to the ALP annual conference,
does so at their peril.

MICHAEL JANDA: And with that peril include the possibility of the Premier or the Treasurer being
asked to leave the party?

IAN WEST: As I say, if you just ignore and have disrespect for annual conference decisions, then I
doubt whether you have much future in the party.

ELEANOR HALL: That's Upper House MP Ian West speaking there with Michael Janda.

As we mentioned, the former Victorian Premier Jeff Kennett is no stranger to privatisation battles.
Sixteen years after he pushed through energy privatisation, he says Victoria is flourishing and
that for the sake of NSW, Morris Iemma must not back down.

Jeff Kennett has been speaking to Emma Alberici.

JEFF KENNETT: The benefit is two-fold. One, you get greater competition in terms of pricing, and
that is always good for the consumer. And secondly, you get the opportunity to have the private
sector upgrade a lot of what is clearly decaying infrastructure.

The third plus is an important one for NSW, in that it can raise some money from the assets sold
and that could be applied hopefully to reduce debt or to provide important services, hopefully
services that are measurable, so that is just not about employing more public servants.

EMMA ALBERICI: That's all good in theory and if I can just pick up on your last comment, you can do
all those things by borrowing more money. You don't necessarily need to be selling off the farm?

JEFF KENNETT: No, that's exactly right. But you're not selling off the farm, in this day and age,
these are assets that are got to be utilised for the benefit of the broader community. And to be
quite honest, NSW has adopted a dinosaur approach for some years now.

Bob Carr should have privatised the electricity assets when we did in Victoria. He got rolled by
the unions and left it at that. As a result if you have a look NSW as a state now, it is well
behind the national average; it no longer leads in terms of reform; it's financial position is
fundamentally flawed and finally the basic services that it provides its community are very much at
risk. I'm talking about water, I'm even talking about power, I'm talking about the public
transport, I'm talking about education. So, NSW is very quickly becoming a backwater.

EMMA ALBERICI: All good in theory to suggest the private sector can do a better job of delivering
essential services. Did Victoria actually see better services at better prices when the electricity
grid was indeed privatised?

JEFF KENNETT: No doubt. We got better pricing and people are able to choose their supplier. So, I
now in my residential address have got two or three suppliers I can choose from and I can put
conditions upon that and try and get the best deal possible.

And thirdly, I know as a state, and we had a $32 billion debt, we drove it down to $5 billion. And
the savings on the interest of that benefited every Victorian. And I think you got to get to stage
where you don't subsidise electricity, you encourage the technology to flow, we end up with a
national, proper national grid, and the consumer will be better off.

EMMA ALBERICI: What about the workers? Are they better off?

JEFF KENNETT: Yes, absolutely. In any economy, at any time, there are going to be job losses and
there are going to be job gains. And when we started our reforms in '92 and we laid off about
50,000 public servants, among others, what happened? Employment levels rose. Why? Because we
created a new environment.

Have a look at today. Our unemployment rate is the lowest it's ever been. So don't get stuck in
this myopic view that because of change, it doesn't mean that it isn't associated with growth. I
move around the state and I go up to Queensland often and people come up to me and say, "Jeff
Kennett, I was one of the teachers you sacked and I expect to get a rubbishing (phonetic)." And
they said, "Look, it's the best thing that ever happened." "I went out and did a, started my own
business or I started a Jim's Mowing franchise, and it's changed my life entirely."

Don't think the change can't be a good thing. If you're going to continually be controlled by the
archaic groupings of people, in this case called unions, then believe you me, your state is going
to shrink. Bob Carr started it, Iemma to his credit is trying to break it, but it might actually
come at the cost of his own job, which would be a pity because right now NSW needs some tough
leadership.

You can stay where you are, as a state in cocoon mode, and I can assure you the rest of the country
will go ahead of you. Already Brisbane has gone, Queensland's ahead of you, Western Australia is
ahead of you, Victoria is ahead of you, South Australia will go ahead of you when they open up and
extend Olympic Dam, because it will become one of the three states that are driven by mining
economies.

NSW is unfortunately just going to be squeezed because you have no capacity to address those things
that have to addressed, and at least, by privatising the electricity system, it will give you
resources but I genuinely believe provide a better service.

ELEANOR HALL: That's the former premier of Victoria Jeff Kennett, he was speaking to Emma Alberici.