EDITORIAL: Baird’s sell-off program – Newcastle Herald

NSW Liberal Premier Mike Baird says he won’t be frightened by the Queensland election result into backing away from his own government’s asset sales program.

That seems a reasonable stance, given the differences in the political climate in the two states.

In Queensland, Campbell Newman put the Coalition on the nose as much with his style and his broken promises as with his privatisation program.

By contrast, Mr Baird inherited the premiership from moderate Barry O’Farrell who created a climate of calm government, not overtly driven by the kind of rash ideological brain-snaps so characteristic of the Coalition at the federal level.

Mr  Baird hasn’t yet rocked the boat that Mr O’Farrell set on such a stable course, and voters appear inclined to regard him as generally benign.

Even the scandal uncovered by the Independent Commission Against Corruption – that engulfed so many senior Liberals – doesn’t seem to have marred Mr Baird’s personal standing.

The worst his critics can say is that his government appears  beholden to the coal industry.

And that his approach to maximising the sale price of public assets may ultimately result in pain for consumers in the form of price-gouging by newly minted private oligopolies.

Indeed, Mr Baird does seem disturbingly one-eyed when it comes to perceiving competition issues.

Perhaps it’s his banker background that makes the Premier appear highly sensitive to the importance of having multiple bidders to drive up the sale price of assets. He seems, however, far less sensitive to the importance of having multiple suppliers to hold down the price of products sold into a marketplace.

Consider the government’s approval, against the advice and warnings of the Australian Competition and Consumer Commission, of AGL’s purchase of Macquarie Generation.

Consider too, the government’s secretive imposition of a contractual penalty clause on the Port of Newcastle, designed to prevent it competing with Sydney in container handling.

Helping create extreme market advantages for would-be asset buyers is a risky business. It will certainly help maximise the upfront, one-off sale price, but the downside is loss of competition  after the sale, almost in perpetuity.

Mr Baird’s next planned sale is part of the state’s electricity distribution network. Knowledge that this privatisation is looming is hardly creating waves among voters who, for the most part, seem cautiously willing to accept it.

But if, in his eager pursuit of the best possible price, the Premier keeps creating preconditions for future price gouging by the new owners of formerly public assets, he must realise that a political reckoning will inevitably come.