Concluding comments in John Quiggin’s report
After 20 years it is evident to everyone that the electricity reform program that began in the early 1990s has not delivered the promised outcomes. Privatisation corporatisation and the creation of electricity markets were supposed to give consumers lower prices and more choice, to promote efficiency and the reliability in the electricity network and to drive better investment decisions for new generation and improved transmission and distribution networks.
None of these promises have been delivered.
Prices have risen dramatically. ‘Consumer choice’ has meant the removal of the secure low-cost supply consumers previously enjoyed and its replacement with a bewildering array of offers, all at costs inflated by the huge expansion in marketing and managerial costs.
Investment policies first ran down capacity inherited from the statutory authority system, then replaced it at massively higher costs.
In the face of this record of failure, the response of reformers has been to claim that the only option is to push on with yet more privatisation. As has been shown in this report, this argument is baseless. Privatisation has produced no benefits to consumers, but has resulted in large fiscal losses to the public.
It is time to admit that the reform process, as a whole has been a failure, and that a return to a more centralised system, with public ownership of critical infrastructure, is the only sensible response.
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