The NSW Government has been accused of selling out the interests of electricity consumers and taxpayers following the announcement that electricity transmission company TransGrid has been sold to an 80 per cent foreign-owned consortium.
The Electrical Trade Union and United Services Union, which represent workers at TransGrid, have raised serious concerns about the impact on consumers, the loss of long-term tax and dividends, and the corporate history of some of the companies in the winning consortium.
Among the purchasers is Spark Infrastructure, which already owns vast parts of the Victorian and South Australian power networks, where it has been responsible for rising prices, cuts to maintenance, and aggressive tax avoidance.
ETU secretary Steve Butler said research by the Tax Justice Network revealed that Spark had not paid a cent in company tax during the past decade, despite owning highly profitable monopoly assets.
“We don’t need to speculate about what the TransGrid privatisation will mean for tax revenues, because we’ve already seen what Spark have done in Victoria,” Mr Butler said.
“Prices have steadily risen for consumers, investment in infrastructure has crumbled, regional jobs have been slashed, and revenues that previously came to governments have completely dried up as the profits are aggressively shifted offshore.
“This consortium, which is made up of big banks, foreign governments and well-known tax avoiders, have just been handed the keys to the monopoly electricity transmission network that supplies power to the people of NSW.”
Mr Butler said the sale would have a negative impact on the NSW budget over the medium to long term.
“Since 2005, TransGrid have paid $2.4 billion to the NSW Government, money which has been used to fund infrastructure and essential services such as hospitals and schools,” he said.
“This sale puts an end to that sustainable, ongoing revenue stream, for a one off payment that is a fraction of the $10.26 billion price tag the Premier and Treasurer are crowing about today.”
Mr Butler went on to say the net proceeds of the sale would be around $7.3 billion after liabilities and sale costs were taken out leaving a measley net benefit of $1 billion for the people of NSW.
“In their most recent annual report, TransGrid’s regulated asset base alone was valued at $6.19 billion, meaning the state will be a measly $1 billion better off due to this privatisation — or the equivalent of four years of dividend payments,” he said.
“Given TransGrid paid $306.5 million in dividends and tax equivalency payments to the people of NSW last financial year alone, this is an incredibly poor outcome that future generations will pay for in the decades to come.”