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Citizens Electoral Council of Australia

Media Release Wednesday, 6 April 2016

Craig Isherwood‚ National Secretary
PO Box 376‚ COBURG‚ VIC 3058
Phone: 1800 636 432
Email: cec@cecaust.com.au
Website: http://cec.cecaust.com.au
 

Lights out in Tasmania’s green free-market utopia

Tasmanians are facing a cold, dark winter. The state’s hydroelectric dams—its primary power supply—are at 13.6 per cent capacity and dwindling; the “Basslink” cable that connects it to the national grid is torn and will be out of commission until at least the middle of June; and the Tamar Valley gas-turbine power plant is too small to fill the gap. The island state is now reliant upon hired diesel generators (at a cost of $44 million, plus $20 million per month to run) for emergency power—a ridiculous situation in Australia’s supposedly advanced economy. But neither the present record-breaking drought, nor the failure of Basslink, are solely or even primarily to blame; rather, responsibility lies with a combination of environmentalist insanity, and the ruinous economic policies that have stripped Tasmania of its superior energy self-sufficiency in the name of “competition” and the “free market”.

Tasmania’s energy minister Matthew Groom effectively admitted to State Parliament on 8 March that the state’s hydroelectric storage levels were not being managed to guarantee continuity of supply, but to maximise profits on the National Electricity Market. The introduction of the carbon tax distorted the management of storage levels even further, as Tasmania’s “clean” hydroelectric power became cheaper than coal-fired power on the mainland. Previously, Hydro Tasmania maintained its water storages at the already-low “preferred minimum level” of 30 per cent as at 1 July each year; two months after the introduction of the carbon tax on 1 July 2012 the preferred minimum was lowered to 25 per cent, to enable the state to sell more power. They got away with it as long as rainfall was steady, but set the state up for disaster with the onset of the current, six-month dry spell.

Groom’s figures make it clear that his own government, in office since March 2014, has continued to capitalise on Hydro Tasmania’s low production costs, while presuming they could make up any shortfall with power “bought back” from Victoria—only to come unstuck when the extension lead broke.

National electricity market nightmare
Basslink was never intended to safeguard Tasmania’s power supply. Rather, it was built to force the eastern mainland states’ electricity generators to compete with cheap Tasmanian hydroelectricity via the National Electricity Market (NEM)—a free-market scam established in 1998, which state governments have used as an excuse to not build new power plants, but instead to deregulate and privatise the electricity system and create a speculative spot market. The late Prof. Lance Endersbee, an engineer on both the Snowy Mountains Scheme and Tasmania’s Hydro-Electric Commission schemes and a friend and collaborator of the CEC, had warned against electricity privatisation when Jeff Kennett started it in Victoria in 1996, reasoning that instabilities caused by the demands of forcing sections of the grid to compete with each other would be detrimental not just to local industries and economies, but to the physical integrity of the electricity infrastructure itself. His warning was ignored.

The carbon tax, and the related markets in “carbon emissions trading” in permits, offsets/swaps, etc.—which continue under the Renewable Energy Target—introduced a new species of parasite into an already dying host. And the deleterious effects of green policy go back well before the carbon tax, to the Australian Conservation Foundation and its president Prince Philip’s determination in the 1970s to sabotage Tasmania’s hydroelectric development and industrial economy. The Greens were born out of the Prince Philip-led fight to stop Lake Pedder, which they lost, only to succeed in stopping the Franklin Dam in 1983, and bringing Tasmania to an economic stand-still. Green MPs are now calling to empty Lake Pedder to generate emergency power—and then dismantle its dams and return it to its “natural” state, thereby destroying what remains of Tasmania’s industrial economy and undoing the legacy of the state’s greatest Premier, “Electric Eric” Reece.

Restore Reece’s legacy
Hydroelectricity has a long history in Tasmania—the Duck Reach power station above Launceston, completed in 1895, was the first publicly owned hydroelectric plant in the Southern Hemisphere. But it was the vision and leadership of Eric Reece, and his support for and huge expansion of the Tasmanian Hydro-Electric Commission (HEC), that made Tasmania an industrial powerhouse. The cheap, abundant power produced by the HEC allowed the government to invite energy-intensive industries such as aluminium smelters and pulp mills to the island, increasing the value of Tasmanian economic output by many times the dams’ cost of construction; it also encouraged the public to take advantage of low power prices to purchase the latest electrical appliances to improve their quality of life. Today, what remains of those industries are scaling back production and may yet shut down—and to delay the mainly heating-driven spike in winter demand, the government has placed newspaper advertisements calling on Tasmanians to “all play our part” by reducing their household power consumption.

Tasmanians, and all Australians, deserve better. Had Reece’s plans been followed through, Tasmania would now be both drought-proof, and immune to power shortages; and had the vision of great Australians like Dr John Bradfield, and his intellectual heir Prof. Endersbee, been allowed to bear fruit, the same could be said of the nation as a whole.

There are no physical obstacles to achieving these aims, but they will never happen under the present “free market” system. Australians must reject the folly of relying upon “market forces” to direct the economy, and instead demand a national bank to direct credit where it is needed. The CEC has already prepared ready-to-enact draft legislation to establish just such an institution, the Commonwealth National Credit Bank. Join us to help make it a reality.

Click here for a free copy of the CEC’s special report The Infrastructure Road to Recovery, a vision for Australia’s economic development produced in collaboration with Professor Endersbee.

Click here to join the CEC as a member.

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