The Northern Territory government is proposing to split the state monopoly Power and Water utility, which provides electricity and water services to the Territory, into three separate entities: power generation; power distribution (retail); and water provision. The power generator would sell electricity to the retail division but also would sell to any private retailers who wished to enter the system on a competitive basis. While the politics of the matter do not interest me, the main claims are the usual ones that are wheeled out by proponents of privatisation – better deal for consumers because efficiency rises. The rival view is that the split up is the precursor to privatisation, which has demonstrably been shown by 30 years of evidence to not improve service delivery, employment, or result in lower prices. As an economist who has done work in this area since the mid-1980s, I was asked by the NT News (a daily newspaper) to comment on the proposal. The story appears in that newspaper on Tuesday, February 17, 2014. What followed was an attack (under privilege) on me from the NT Treasurer, who mislead the NT Parliament by making things up about me. This blog briefly clarifies what the truth is.
