In December 2013, Treasurer Joe Hockey actively promoted a policy to encourage state governments to sell electricity networks, ports, and other public assets at the Council of Australian Governments meeting [1].
The claim that evidence showed privatisation did not lower power bills is supported by research from The Australia Institute, which found that since Victoria privatised electricity in the 1990s, electricity prices rose by 170% compared to a 60% increase in the Consumer Price Index [2].
The study also identified a productivity slump in the electricity sector, with output per worker declining by 24.9% from June 1995, while all other Australian industries saw productivity increases of 33.6% [2].
However, ABC Fact Check conducted a comprehensive analysis in March 2015 and found "no consistent correlation between higher bills and privatisation" [3].
Their analysis showed that while South Australia (privatised) had the highest bills among eastern states, Victoria (fully privatised) had slightly lower bills than NSW, Queensland and Tasmania (all with government-owned networks) [3].
Research by energy economist Lynne Chester found that electricity prices actually increased more in non-privatised states (NSW 115%, Queensland 126%) compared to privatised states (Victoria 103%, South Australia 91%) between 2007-2014 [3].
The claim omits several critical contextual factors:
**Federal vs State Responsibility**: The Coalition Government was a federal government advocating for state-level privatisation.
The Coalition could not directly privatise these assets - they could only encourage states to do so [1].
**Mixed Evidence**: While some studies showed price increases post-privatisation, expert analysis from the Grattan Institute and ABC Fact Check found that the relationship between ownership and prices is complex.
The primary driver of price increases was identified as network investment costs regulated by the Australian Energy Regulator (AER), which applies regardless of ownership [3].
**Historical Precedent**: The major Australian electricity privatisations were undertaken by state Liberal governments before the Coalition's federal term:
- Victoria privatised under Liberal Premier Jeff Kennett in the mid-1990s [2]
- South Australia privatised under Liberal government in 1999 [3]
- ACT established a public-private joint venture in 2000 [3]
**Policy Rationale**: The Coalition's argument was that privatisation would fund infrastructure investment while maintaining regulatory oversight.
Their report found productivity declines and price increases post-privatisation, but these findings should be considered alongside contradictory evidence from other sources [2].
**Newcastle Herald Article**: This is explicitly labeled as an **opinion piece** by Allen Hicks, National Secretary of the Electrical Trades Union [1].
As a union official representing electricity workers, Hicks has a clear conflict of interest regarding privatisation, which typically results in workforce reductions.
The piece presents strong anti-privatisation arguments but is not neutral journalism.
**ABC Fact Check**: ABC's Fact Check unit is generally regarded as authoritative and non-partisan.
Their analysis cited multiple independent experts and regulatory data, reaching a more nuanced conclusion that challenges the simple narrative that privatisation necessarily increases prices [3].
**Did Labor do something similar?**
Search conducted: "Labor government electricity privatisation history Australia"
**Finding: Labor governments have also pursued or attempted electricity privatisation:**
**Queensland (2009-2012)**: Anna Bligh's Labor government implemented a significant privatisation program after the 2009 state election, selling assets including Queensland Rail and port assets.
* * * *
According to former WA Labor Premier Geoff Gallop, this decision "signed up for almost certain defeat" and contributed to Labor's catastrophic loss in 2012 where they won just 7 of 89 seats [4].
**New South Wales (1997-2008)**: Bob Carr's NSW Labor government attempted to privatise the electricity industry in 1997 but was blocked by the union movement and ALP State Conference.
This was rejected by the ALP State Conference by a 7-to-1 vote, leading to Iemma's resignation as Premier [5].
**Conclusion**: Both major parties have supported privatisation at various times.
The Coalition's advocacy was consistent with their ideological position, but Labor governments have also pursued privatisation when in power, particularly in Queensland.
While The Australia Institute's research showed price increases following Victorian privatisation, independent analysis from ABC Fact Check and the Grattan Institute found no consistent correlation between ownership structure and consumer prices [2][3].
The key driver of electricity price increases across all jurisdictions (both public and privately owned) was identified as network investment costs - replacing aging infrastructure, meeting higher reliability standards, and responding to peak demand growth [3].
Critics argue that privatisation leads to:
- Loss of public accountability for essential services [1]
- Reduced workforce productivity due to fragmentation [2]
- Loss of ongoing government revenue from dividends [1]
- Higher managerial overhead costs [2]
Proponents argue that privatisation delivers:
- Capital for infrastructure investment without debt [3]
- Greater operational efficiency through competition
- Reduced risk to taxpayers from asset ownership
- Access to private sector expertise
**Key context**: This is NOT unique to the Coalition.
The claim that the Coalition called for electricity privatisation is accurate, and there is evidence supporting the assertion that privatisation did not deliver lower power bills as promised.
However, the claim omits critical context: (1) the Coalition was a federal government advocating for state-level action, not implementing privatisation directly; (2) the evidence on privatisation and prices is mixed, with authoritative sources like ABC Fact Check finding no consistent correlation; and (3) most significantly, Labor governments have also pursued electricity privatisation (Queensland 2009-2012, NSW attempted 1997 and 2007-2008), making this a bipartisan issue rather than a unique Coalition policy position.
The claim that the Coalition called for electricity privatisation is accurate, and there is evidence supporting the assertion that privatisation did not deliver lower power bills as promised.
However, the claim omits critical context: (1) the Coalition was a federal government advocating for state-level action, not implementing privatisation directly; (2) the evidence on privatisation and prices is mixed, with authoritative sources like ABC Fact Check finding no consistent correlation; and (3) most significantly, Labor governments have also pursued electricity privatisation (Queensland 2009-2012, NSW attempted 1997 and 2007-2008), making this a bipartisan issue rather than a unique Coalition policy position.