Costa’s catastrophe

A catastrophe like the one that befell the NSW Labor Party at the weekend can scarcely be attributed to a single individual, and indeed there were many contributors. But one person stands out above all others as deserving of credit or criticism – former Treasurer Michael Costa. Having risen through the trade union movement, he made his bones in Parliament as a union-busting Transport Minister. Appointed by the utterly hopeless Morris Iemma as Treasurer, he persuaded Iemma to privatise the electricity industry, in direct contradiction of the platform on which Labor had campaigned, and the previous repudiation of privatisation by NSW voters.

As the massive unpopularity of similar moves in Queensland had shown, Labor was doomed unless it repudiated Costa, Iemma and privatisation. The party managed the first two, but, not unfortunately the third.

In keeping with his entire career, Costa quit the day he became eligible for a Parliamentary pension, and immediately emerged in his true colours as an open enemy of the labour movement and the Labor Party.

As I said at the outset, it wouldn’t be possible for one person to do this alone. While I find it hard to attribute any real agency to Iemma, he and/or the Sussex street machine that nominated him to the Premiership could have stopped Costa if they wanted to.

138 thoughts on “Costa’s catastrophe

  1. @jakerman

    1. a) I wrote: “if you (jakerman) were to choose Red Energy in Adelaide then, given the total cost estimate obtained from the switchwise site would be $3889 for 15000 kwh p.a., resulting in an average kwh of 0.259”
    1. b) Your list of calculations is Adel 15,000 $4,315 $0.29

    0.26<0.29 True or False, jakerman?

    2. (a) jakerman @1, p2: "Nick see: http://www.switchwise.com.au/

    Adelaide $/kWh = 0.28
    Melbourne $/kWh = 0.24
    Sydney $/kWh = 0.23
    Brisbane $/kWh = 0.22

    2. (b) jakerman @25, p 3: "I’ve been consistent in how I’ve used the data. I’ve been comparing the costs of electricity for average households in different states"

    The information in 2 (b) does not correspond to the information in 2(a).
    True or false, jakerman?

    3. "This ain’t “out of thin air” robustness"

    Why not?

  2. jakerman

    I think you’ve adequately refuted the claims nick made on page 1 about the relative prices in the four states.

    Ernestine’s example doesn’t change the rankings. SA is still the dearest for someone using 15,000 kWh pa.

  3. jakerman, we have to bring this conversation to an end because it is derailing the thread.

    As far as I am concerned, the conversation came about because you posted 1 on page 2. I responded, as many people would do, by looking at my own electricity bill (I made the crucial information public). Your post made no sense (hence my later question for whom is your data supposed to be relevant and for what purpose).

    The PR lot of corporatist-managerialist private and public corporations often put numbers in the room which contradict or call into question the actual data people can observe. (How does one resolve this? I try to boil it down to True or False questions.)

    I believe the conversation brought out that the debating method involving selective quotes is not helpful.

    One point I wanted to get across is that the reference to the switchsite is not helpful regarding your post 1, page 2 (later posts contained several examples in support of my opinion on the limitations of ‘consumer choice assistance’ web-sites, such as switchwise, not exluding the outcome that its ‘products’ (ie the numbers spewed out) is misleading to many people. You kindly provided a text excerpt from the web-site which contains the usual disclaimers.

    Good night

  4. SJ, for the record as you’d be able to workout from your repeating my method, I used the default plan provided in each state (the default being the plan more people use).

    Would be more thorough to repeat with the cheapest in each state to compare. But its late.

  5. @Alice

    Yes. She could have said you, Gough, who “made education the right of many instead of the privlieged few”. “And we, of modern labour, who climbed that ladder to opportunity, and since then, have progressively been removing the rungs”.

  6. In the interests of keeping Quiggin Readers well informed (and ready for debate), I have repeated my method using cheapest provider options. It tells a different story to the one found using default providers. A less straightforward story in comparing privatized vs government provider states. Adelaide is still the most expensive, but now Melbourne is the cheapest. So Nick’s argument has some support from the Melbourne data but not from Adelaide.

    Thanks to Ernestine for pushing me to dig deeper, apologies for not doing better earlier:

    Annual Cost
    kWh/y 5,000 8,000 9,000 10,000 15,000
    Adel $1,312 $2,081 $2,339 $2,597 $3,889
    Melb $980 $1,448 $1,604 $1,760 $2,540
    Sydn $1,048 $1,664 $1,925 $2,186 $3,490
    Brisb $1,074 $1,676 $1,877 $2,077 $3,070

    Equiv price $/kWhr
    kWh/y 5,000 8,000 9,000 10,000 15,000
    Adel 0.26 0.26 0.26 0.26 0.26
    Melb 0.20 0.18 0.18 0.18 0.17
    Sydn 0.21 0.21 0.21 0.22 0.23
    Brisb 0.21 0.21 0.21 0.21 0.20

  7. @Alice

    Can’t you see that jakerman’s numbers raise interesting questions?

    For example:

    1. The price schedule of the cheapest supplier in Melbourne is least consistent with the objective of reducing ghg emissions through price signals.

    2. Why don’t people switch to the lowest cost provider (ie is Costa et al totally wrong with their microeconomic reform?)

  8. Ernestine,

    It would be interesting to calculate which state’s power would rise most under a carbon price. Victoria use a lot of brown coal. SA use less brown coal, and more gas and wind than Vic.

    Melbourne’s pricing structure seems perverse.

  9. jakerman,

    Indeed, your first question is interesting. The second point seems to me to be related to the divergence in objectives between public and private.

    IMHO, it is the nitty gritty detail which affects policy outcomes in reality. Micro-economic reform has introduced policy coordination problems which make the introduction of ghg emission reduction mechanisms more complex (more complex than first year undergraduate micro-economic texts for sure)

    I’d like to pay my respect to you for your work and I am grateful for the experience of getting out of the pomo-type debating method (one needs two to tango out of it).

    With the benefit of hindsight, your method of using data and data analysis tools made available to the public is a good one.

    Unless we get special permission from our host to continue, I suggest we either move the crucial data to the sand pit and continue (after Wednesday please) or we stop..

  10. Ernestine,

    I can’t think of more relevant data at present, so I’ll go with the latter.

  11. Poor Costa couldnt help himself writing to the SMH today to say what a fine job he did as Police minister …. (police minister with his hand in the real estate merry go round till of insider trading from NSW labor planning decisions?)

    Oh spare us all.. (cretins all of them).

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