Seventeen years after a Queensland Labor premier sold off the state’s energy retailer, the party has conceded privatisation failed consumers and promised a new publicly owned “people’s” energy provider to power cheaper electricity bills.
Incumbent Steven Miles announced the policy of a new state energy retailer on social media on the second day of the election campaign on Tuesday, before fronting the travelling press pack in Mackay with further details later on Wednesday morning.
“The people’s provider will ensure households and businesses reap the benefits of that – not foreign shareholders,” Miles posted across his social media platforms.
“We know how important it is to make energy bills cheaper for Queenslanders.
“It’s simple – people before profits.”
The premier told reporters that the proposed new retailer would deliver the option of a publicly owned electricity retailer in the south-east, where households and businesses have only been able to choose privately owned operators since the then premier Peter Beattie sold off the retail arm of Energex in 2007.
Across the vast swathes of the state classed as regional Queensland – which includes major cities from Toowoomba to Cairns – it would see the new retailer compete against the existing state-owned Ergon, which is both distributor and retailer.
This would lift monopoly restrictions placed on Ergon by the regulator and introduce competition in the retail market across the rest of the state.
“We know more competition equals lower prices,” Miles said. “And we know that publicly owned government corporations can compete against each other to deliver that competition.”
The treasurer, Cameron Dick, said the new retailer would run as a subsidiary of Energy Queensland, limiting the set-up cost to about $1.4m and timeframe to about 12 months.
It could save households up to 6% on their energy bills, he said – the regulated profit margin private retailers are allowed to bank.
The LNP opposition leader, David Crisafulli, who has sought to neutralise some Labor policies such as cheap public transport fares by adopting them – derided the plan as “a desperate thought bubble”.
“The solution is state-owned generators running at capacity, not more state-owned retailers running off with your money,” he said.
Crisafulli said “10 years of bad planning” has meant Queenslanders “are paying more” for their electricity.
Speaking in Rockhampton, Crisafulli reiterated that he would repeal the state’s legislated renewables target if elected, rejecting claims from the state’s environmental peak body that he could not meet the state’s emissions target without renewables.
“There is a number of ways a government can deal by working with the private sector and indeed looking at its own back yard to reduce your emissions,” he said.
Energy is the leading emitter in Queensland, representing 36% of the inventory.
The business lobby also attacked Labor’s proposal, with the Business Chamber Queensland CEO, Heidi Cooper, claiming the “interventionist policy” would do little to put downward pressure on energy prices, but instead create another layer of bureaucracy and reduce competition.
“Another state-owned body is anti-competitive, inefficient and interferes in the free market,” she said in a statement.
But Dick said that time had revealed a “lack of success” in retail competition, particularly in the privately run south-east, since the public sell-off.
“I don’t think we have seen the gains and the benefits to consumers from retail competition and energy prices that people anticipated,” he said. “It just hasn’t materialised.”
Paul Williams, an associate professor of politics at Griffith University, said Queenslanders had long embraced publicly owned assets and that privatisation had proved “deeply unpopular”.
“Can people honestly say that Telstra, the Commonwealth Bank and Qantas, for example, do they feel they get better service now than they did in the 1980s?” he said.
“I think the overwhelming answer would be, no they don’t, they don’t feel they get better value for money.”
He said many of these sell-offs had been driven by economic rationalist policy advisers, with the public given little say in the matter.
“Is this a turning of the tide?” he said. “It may well be.”
But though it might prove a popular idea, a model for others to copy and a “barbecue stopper”, it was unlikely to change the result of an election widely tipped to go to the LNP in a landslide, he said.
The Greens energy spokesperson, Michael Berkman, said it was “great to see Miles unpicking some of the disastrous privatisation of his Labor predecessors” but called for 100% public ownership.
The University of Queensland economics professor John Quiggin said that this announcement could be “laying the groundwork” for just that outcome, saying “a return for a fully publicly owned system … is what I think we should ultimately aim for”.
“The only part of the industry that was fully privatised is retail,” he said. “This is an acknowledgment that privatisation is a failed policy.”
