InvestSMART

The middle way doesn't lead far

THE style of the O'Farrell premiership is becoming clear: it is the middle way, the course charted between extremes. That is the conclusion one can draw from the Premier's decision to accept the advice of the Tamberlin inquiry which investigated Labor's part sale of power assets. The government will sell the power stations, generator sites and the Cobbora coalmine. The estimated sale price is $5 billion in total - a far cry from the $25 billion which might have been on offer when privatisation ...

THE style of the O'Farrell premiership is becoming clear: it is the middle way, the course charted between extremes. That is the conclusion one can draw from the Premier's decision to accept the advice of the Tamberlin inquiry which investigated Labor's part sale of power assets. The government will sell the power stations, generator sites and the Cobbora coalmine. The estimated sale price is $5 billion in total - a far cry from the $25 billion which might have been on offer when privatisation was mooted under Bob Carr in 1997, or even the sums suggested when Labor had a second go, under Morris Iemma in 2008.

THE style of the O'Farrell premiership is becoming clear: it is the middle way, the course charted between extremes. That is the conclusion one can draw from the Premier's decision to accept the advice of the Tamberlin inquiry which investigated Labor's part sale of power assets. The government will sell the power stations, generator sites and the Cobbora coalmine. The estimated sale price is $5 billion in total - a far cry from the $25 billion which might have been on offer when privatisation was mooted under Bob Carr in 1997, or even the sums suggested when Labor had a second go, under Morris Iemma in 2008.

It is disappointingly little to expect from the sale of assets built up over generations, and which play a key role in the economy of the state. But although it is not much of a deal, there is some justice in this: much of the disappointment is of O'Farrell's making.

The head of Infrastructure NSW, Nick Greiner, has made no secret of his view that the whole industry - not only the generators but also the distribution network - should be sold. NSW, he has said, needs to get serious if it is to reduce the backlog of capital works which is dogging the state's development. Many in the business community agree with him.

The Premier, however, is far less enthusiastic and has taken care to dampen down Greiner's enthusiasm. "He's one of 4.5 million voters across this state who's entitled to his view," he said on Thursday. That is not quite true. Greiner is considerably more than just another voter. He is the head of the body set up by O'Farrell to advise it on priorities and, in advocating the full sale, he is doing just that. The extra $30 billion it is estimated the state would receive from selling the distribution network would enable NSW to make a useful start on the capital works it needs.

Holding O'Farrell back from acceding to Greiner's view is his promise before the election to keep the poles and wires in public hands. There is a respectable argument for this position: the network is a natural monopoly. The state needs only one, not many competing networks. The danger might be, therefore, that an owner would take advantage of its monopoly position and start overcharging. That would be possible - if the state government was too weak to regulate effectively. There is no sign, though, that that is the case.

O'Farrell's promise, though, was based not so much on the economic case but the political one. He was under pressure from National Party members who feared a privatised network might increase the efficiency of its workforce and cut jobs in regional areas. Politics has always guided the Premier on this issue. It was politics, not economics or the good of the state, which led him to oppose Iemma's and Michael Costa's plan - because he stood to gain when it failed in the upper house for want of Coalition support. So it proved: Iemma and Costa quickly left office, two early scalps of the man who is now premier. The fact that privatisation was a long-standing Coalition policy was irrelevant.

It is politics that now keeps O'Farrell to the middle of the road. He is aware that the legacy of Labor's bruising fight is an abiding distrust of privatisation in the public mind, sown there by a vigorous publicity campaign the unions undertook to frustrate Iemma and Costa. He is reluctant too - and quite rightly - to break a promise. Regrettably, that stance would be far more honourable if the promise in question were not so poorly though out and short-sighted.

On this issue, Labor under John Robertson is now simply irrelevant. Its scant numbers in Parliament, the result of its comprehensive rejection by voters on this issue among others, put it in no position to affect the outcome; its chaotic record in office on the question of selling power assets gives it no standing to advocate policy now; and the dire role played by its present leader, Robertson, in undermining Iemma's plan serves only to emphasise its haplessness and confusion.

What this saga shows is the difficulty governments in NSW can encounter when they try to construct and deliver an economically rational policy which cuts across entrenched interests. It is the same gridlock that has beset planning policy, the same that has frustrated attempts to build a second airport.

As we have said, there is a certain justice in the poor return O'Farrell and his government will receive from this sale, but there is a lesson, too: the middle way may not get anyone where they want to go.

Hot Wookiees wax and waneWITH the Middle East in flames, Europe bringing the world economy to its knees and the planet facing ecological catastrophe, it is a relief to have to grapple with a problem that matches our natural intellectual shallowness - namely, how to make Wookiees sexy. As we reported this week, the producers of Star Wars Burlesque were reluctant to put Wookiees on stage - giant, hairy things prone to guttural groans and extreme violence. Instead they came up with the idea of Wookiee hunters, bodacious babes who shoot Wookiees and turn the heads of their prey into totally now, totally wow headdresses and their skins into barely-there bikinis. Frankly, the only word to describe this approach is jejune.

More pizazz and oomph would be achieved by simply embracing Wookiees' natural sexuality. Wookiees, displayed tastefully nude, will have a genuine appeal to some burlesque fans, we feel sure. Then there is media management. Teasing suggestions could be floated on evening news bulletins of Wookiee-waxing, with some hapless cast members getting full Brazilians by mistake. If that fails to sell tickets, there's always the "banned in Brisbane" strategy. Surely one of those who tell the census collectors their religion is "Jedi knight" would be willing to fulminate from a pulpit about the sexual exploitation of vulnerable teenage Wookiees. That would bring the crowds in.


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