Another tiny leap forward

THE government's decision to unite its three electricity distributors - Ausgrid, Endeavour Energy and Essential Energy - under a single new state-owned corporation promises a modest benefit to consumers. It claims $400 million will be saved during the next four years, most of which will be passed on to households as rebates. It is bewildering, even disturbing, that this straightforward savings measure was not implemented long ago and the benefits passed on to consumers.

The government put the best possible gloss on the changes amid growing public concern about the rising cost of power. The Energy Minister, Chris Hartcher, said the move would put ''downward pressure'' on network charges, which contribute about half the total cost of electricity bills.

But consumers will be disappointed if they expect the merger to stop electricity costs rising. The effect will probably be insignificant for most consumers compared with electricity price rises in the pipeline. Some experts believe costs will double between 2011 and 2017.

The decision to merge the distributors draws attention to an unfortunate pattern for the O'Farrell government: modest change trumps bold reform. Instead of tinkering with the management structures of the distributors, the distributors should be sold or offered to the private sector on long-term leases. That would free up about $30 billion to invest in transport infrastructure and deliver other statewide economic benefits.

Hartcher has reiterated a promise to keep the distributors in public hands for this term. But the government's audit of the state's finances, conducted by the former Treasury secretary Michael Lambert, says the sale or long-term lease of the distributors would advantage NSW. He found that private sector owners would ''manage the network businesses more effectively, achieving lower costs that would flow through to lower prices''.

Merging the distributors would not reduce their capital expenditure, the main component of their overall costs. If the government did privatise them it would avoid investing billions of dollars in ''poles and wires'' that the private sector is prepared to fund. This would allow scarce capital to be diverted to other infrastructure projects.

The proceeds from a sale would permit a big reduction in the state's net debt or unfunded superannuation liabilities. Privatisation would also resolve the long-term anomaly of the government being both the owner of the distribution businesses and a regulator. Because the network companies are already fully regulated, consumers would be protected from price exploitation, regardless of who owns them.

The electricity network businesses should be privatised, not just merged.

Gambling in a darkened roomTHE ructions at the Star casino which followed the sacking of its managing director continue. Experienced managers have been dismissed for allegedly passing to a whistleblower emails which set out a revised policy towards so-called high rollers. The practice had been to ask all clients, even those prepared to wager large sums, to leave the casino after 24 hours at the gaming tables. That rule still holds for local gamblers but the emails show overseas visitors with limited time and a fixed amount to bet are now allowed to play on. Even if they show obvious fatigue - nodding off to sleep, slow responses, spilling drinks - they will be asked only if they feel up to continuing.

To many who find the lure of gambling inexplicable and baffling, this will seem appalling. Hotels and clubs with poker machines must close for some hours within every 24 to break the gambling cycle. The casino is exempt from those rules and is within its rights to treat clients as it does and its clients of course must be assumed to know what they are in for when they enter its doors. But the casino exists by government fiat. It is an open question whether society accepts this behaviour.

What should particularly concern the public is that these rules had to be leaked. Why the secrecy? Specifically, they should be worried at the lengths the casino goes to - including sacking long-standing staff - to prevent its operations or practices becoming widely known. The public has been allowed - by the casino - to know that the leakers breached its email conventions, and how they did so. But the public is still not allowed to know what the general manager, Sid Vaikunta, is alleged to have done which led to his sacking. Why the double standard?

Some obscurity is essential to casinos. Gamblers want privacy, and casinos must preserve it or lose their clientele. The Star's management will have been horrified that a Papua New Guinea minister's adventures there found their way onto the front page of this newspaper. But secrecy must have clear limits. The Independent Liquor and Gaming Authority is inquiring into the events surrounding the general manager's sacking. It is to report next month but is yet to decide what, if any, of its hearings will be public. That is unjustified.

Activities that need darkness to thrive attract suspicion. The casino is no exception. Those running it and those who police it must remember: the public expects their actions to be open to scrutiny.