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The good old days … when we could afford electricity

By Bob Rafto

One thing about the good old days is that if you remember them you are getting long in the tooth. (Now that’s a term you don’t hear much of these days and I suppose it belongs to the era of the good old days).

The good old days for me is the late sixties to the late seventies when I was young and reckless and trying to drown myself in decadence on the weekends (but that’s another story).

The good old days that I’m referring to are those days that the politicians are trying to drag us back to.

I would define the good old days as the post war era right up to the ’91 recession (we had to have) and again during the Howard years – with all the handouts and the property boom.

And I agree that we should go back to the good old days. They were prosperous, jobs were easy to get even at an unemployment rate of 8% which was about the norm (and didn’t Premier Peter Beattie get howled down when he stated he will get the Queensland unemployment rate down to 5% and he did achieve it … as did the rest of Australia).

The question that has to be asked is; “What underpinned the good old days which made them good?”

A complex question to be sure and I’m not qualified to give a definitive answer, however, the glaring contrast of the good old days and to the present is that there was no privatisation of public utilities and infrastructure.

The politicians told us to expect lower prices when they privatised our asset,s and instead we have witnessed price gouging. One only has to look at the electricity sector for evidence of that. Another question that has to be asked is; “How much cheaper would electricity be if it was in government’s hands?”

Not only has privatisation of our utilities been an utter dismal failure, I would venture to say it has been a drag on the economy, and to illustrate this point let’s look at the electricity sector. It has been chopped up into pieces with middle-men and retailers laying claim to these pieces and they’re all trying to maximise profits.

Without these middle-men – and since the government does not need to make an excessive profit – the price of electricity at an estimation would drop by 25% or more. (It’s a ‘guesstimation’, of course)..

Now if the average household bill is $500 a quarter, deduct 25% off this of privatisation’s profits, and this equates to a saving of $125 (or $500 a year).

I said privatisation is a drag on the economy, that household saving of $500 a year would undoubtedly would be spent in local shops and businesses – like in the good old days – but now instead these excessive profits are lining the pockets of the electricity companies and their shareholders. And that is a drag on the wider economy.

The only way we can get back to the good old days is to buy back all the public utilities that have been privatised and that will lead to lower prices and consumers will have more money to spend across the board and that will undoubtedly lead to more employment and other benefits.

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17 comments

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  1. Florence nee Fedup

    I am for first time in fear my next power bill. #auspol

  2. Lurline O'Brien

    A truer blog was never written. I remember those days too. My generous $75 from the government yesterday. It wiped out the amount my account was overdrawn from paying my fortnightly electricity payment.

  3. helvityni

    Whenever something is privatized, be it Poles& Wires, Age care, PMG, hospitals, schools, Employment Offices, CBA, etc, etc… the profits come first, the population in need of those services come second….it’s a cruel hard world out there and it’s not going to soften any time soon…

  4. Keitha Granville

    totally agree – electricity, water, telephones. Should NEVER have been handed to the private sector.

  5. Kyran

    Back in the 70’s there were pages from a book being secretively passed around at school. The book was seen as a threat to society and a deliberate attempt to corrupt our youth.
    In the synopsis posted on Wikipedia;
    “The book encourages young people to question societal norms and instructs them in how to do this. Out of 200 pages, it includes 20 pages on sex and 30 on drugs, including alcohol and tobacco. Other topics included adults as “paper tigers”, the duties of teachers, discipline, examinations, intelligence, and different schools.”
    The post refers to its reception in ‘civilised’ society;
    “As a result of its subject matter and its targeted audience of schoolchildren, a number of politicians in many countries criticised the book, fearing that the book would erode the moral fabric of society and be an invitation for anarchy in schools.”
    To put it in the context of the times, the early 70’s were scaring the bejesus out of what was derogatorily referred to as ‘the Establishment’. In Melbourne, there were regular protests about the Vietnam war, about the actions of an education minister (Thompson, I think), union protests seeking radical workplace reform (like a 38 hour week, penalty rates, increased wages), protests about a woman’s right to choice, to name but a few.
    That Little Red School Book. Not sure if you have ever heard of it, Mr Rafto. Them good old days. I’d love to go back to the 70’s. However, we have a government hell bent on the 50’s.
    Thank you Mr Rafto and commenters. Take care

  6. zoltan balint

    Good old days … I remember them as the old days (as you highlighted in what you talked about) there was not anything fuc…ing good about them. BUT because I am an eternal optomist I get up in the morning and say to my self ‘it better be a fu…ing better day today or I might have to kill the next fuc…ing person I see’.

  7. bobrafto

    It;s time for some activism, privatization in the energy sector has failed, and there should be a movement of nationalizing the whole industry.

    If this doesn’t happen inequality will keep on widening http://www.couriermail.com.au/news/queensland/power-cut-off-to-almost-30000-homes-as-low-income-families-struggle-to-pay-electricity-bills/news-story/bb26f5986042ceee0f0b12b13d2ac791

    And it’s not only households who are hurting it is also business owners with some having to close shop.

    Nationalizing the energy sector to achieve lower prices would be like a huge stimulus package for the benefit for all as those savings will be spent in rural areas as well as the cities instead of being harbored in the pockets of the energy companies and their shareholders.

    If the government can afford to build new coal powered plants it can afford to buy back our essential services.

  8. townsvilleblog

    The good news is that we still can afford electricity if we move with the times and install solar power on our roof. My wife and I have enjoyed solar power since 2010 and we found it was one of very few assets that helped you pay it off as it cuts your electricity bill. We went for a 3kW system but upon reflection should have gone for a 5kW system. Our system saves us $171 each quarter which helps a lot. A 5kW would save even more and if we had our time again we would have installed the 5kW. In Townsville we even have a company who will install solar on your roof if you are renting, and you can take the system to another rented premises if you need to.

    So please, go renewable energy it is available to everyone as we paid off the 3kW system when we were both on a pension with the rising price of electricity nobody can afford not to have solar on their roof.

  9. king1394

    The government should remove GST from electricity and gas, (as essential like food) which would reduce bills immediately, and stimulate the economy as well

  10. Adrianne Haddow

    townsvilleblog,

    Like you my husband and I installed solar panels and a smart meter in order to make energy bills affordable in our retirement. We acted too late to enjoy the generous concessions given by the previous Labor government but felt the investment would pay for itself eventually.

    Now the Australian Energy Marketing Commission is proposing to charge solar owners for the privilege of providing power to the grid.

    They are calling, but not very publicly or loudly, for submissions from solar owners and interested parties regarding this proposal.

    Solar Citizens, a renewable advocacy group, has an online submission form for people to respond to this blatant attempt to price gouge.

    The following information and link comes from them….

    The Australian Energy Market Commission (AEMC), the body that makes the rules that govern the electricity market, is considering allowing solar owners to be charged for feeding their electricity back to the grid. That’s right, they want to charge solar owners simply for providing energy. It’s a full-on solar swindle.

    Solar owners shouldn’t have to pay to access the grid — especially when big dirty coal and gas power stations don’t have to pay a cent to export the energy they generate.

    Now the AEMC is calling for submissions from the public on whether this rule change is a good idea. I just sent in my submission telling them to scrap this unfair solar charge.

    Will you join me? http://www.solarcitizens.org.au/aemc_submissions

  11. stephengb2014

    Bobrafto, how right you are in fact I have been saying the same since 1983 when the good old ALP privatised the banks and the airports etc. I was shouted down then by my mates and called lefty names principly a ‘commy’

    More recently I have made repeated comments about the re-nationalisation of utilities, banks, monopoly industries (eg public transport) and government services like Centrelink.

    Meanwhile Kyran, I beg to differ, the so called LNP conservatives (actually the neoliberal agenda) want to take us back to the 1870s when there were no unions and workers would be chosen at the works gate to try to get just one day of work.
    And if you think I am wrong or a bit OTT, just look what is happening right now, internship, gig economy and sham contracting to mention a few here. Then there is zero hour contracts, which are exact copies of lining up at gates in the hope of merely 1 day or even 1 hour of employment.

    Thats just in the so called first world, let alone the child labour, actual slavery and shocking work conditions of the third world on subsistance incomes.

    Keynesian economics are becoming talked about more and more, because Keynsian economic policies heralded the Golden Age 1945 to mid 1970.
    1971 saw the memo from Lewis Powell to the USA Chamber, creating the blueprint for the resurgance of the free market.
    Hayek and Friedman came into there own and destroyed Keynsian thinking by exploiting the inflation created by the OPEC oil crisis in early and mid 1970, the result was Arthur Laffer, Maggie Thatcher and Ronald Reagan.
    That started, in early 1980s, the move to the free market idiology which is now known as neoliberalism.

    Oops sorry about the rant, I must be a ‘commo’

    S G B

  12. Bronte ALLAN

    We also installed Solar panels in only the last 18 months or so, & like Andrew (above) we are not getting anywhere near the rebates that early installers are, but at least (I think) we are contributing in some small way to helping the Energy supply situation here in SA. However, because of our inept, lying bloody Labor mob here in SA we also “enjoy” (?) some of the world’s highest electricity charges! WTF?? Bastards the bloody lot of them!

  13. wam

    Dear Mr haddow as you are using your own power you are paying less to us than the other customers. In order to make it fair you will be invoiced accordingly. Should you try to emulate the PM and get battery storage and attempt to pay the company even less, we have a record of your payments and will adjust your invoice monthly.
    Yours sincerely
    Privatisation

  14. Zoltan Balint

    Dear Privatisation, we do not pay the generators of power we pay the companies that provide the power lines. These power line companies were the ones first privatised. Even if you make your own power and for any instance you need to connect to the grid you have to pay for the power line which is attached to your house. I suspect that even if you cut this connection you will have to pay something for the line running down the street. These private companies purchasing the power from the generators sell the power to you and charge for the assets like the lines they own. The less people/customers they have or unit of power they sell the more per unit they charge since the lines still should cost the same. The more power individuals sell back to them the less they will pay per unit they purchase as there is only a limited number of customers they can sell to. To them the bucket is still the same size (plus profit).

  15. wam

    Dear Zoltan
    Forgive me, Zoltan.
    It matters not whether we pay, the generators, the retailer or the billing company. The end point is ‘fair’
    In SA clearly if we all were like my friend who jumped on the band wagon and filled his beach shack with solar the privatisation would be hit in the profit pocket. QED
    ps my style of privatisation works like this:
    Privatisation(retail)approaches a facility and says:
    You currently pay $1m for power. I will charge you $900000.
    We then approach the government and buy the power for $800000 and request the power to be delivered through the government network for $100000 clear profit. That is my style of retail privatisation

  16. Zoltan Balint

    Dear wam, I do not see your privatisation since the profit will still be with a private individual to do with as they see fit and why would the Goverment agree to sell them the power for less (give away the profit the goverment is making). Even if the goverment did their shareholders, public like you and me would be receiving less return on our investment and we would have to subsidise running costs through our taxes. The argument goverments put up that private companies run things for less money is true because they employ less people to do the same job pay them less and do not maintain and re-invest profit in upgrade and maintanance. The promise was that the private companies will modernise the asset at their cost by investing money which the goverment did not have and which they will get back from us through the profit they make AND the goverment will show less cost in the budget since the workers will no longer be on their books. Private roads are an example where the toll you pay is the way the company gets back the cost they put in to build the thing (and a BIG BIG BIG profit margin, but hey WE did not pay for it did we).

  17. Andreas Bimba

    I read somewhere that electricity billing companies spend 60% of their revenue on marketing and administration leaving 40% of what we pay to for further gouging by the power distribution companies and power generators. So maybe 20% of our electricity bills is used to pay for electricity and the network? Bring on the clean energy revolution!

    Note however some of the biggest electricity price increases have been in Queensland and don’t they still have government owned electricity generators and network? Government owned utilities can also be sub par and must be run by the best management available that don’t have their hands tied unreasonably.

    The MMT economists know very well we can again have full employment, even with the coming intelligent machine revolution, by having the appropriate level of fiscal stimulus, a job guarantee and competent social democratic and environmentally responsible government.

    Back to the 70′ plus some improvements please.

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