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Legislative Council - Fifty-Fifth Parliament, First Session (55-1)
2024-06-19 Daily Xml
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Electricity Privatisation

Adjourned debate on motion of Hon. R.B. Martin:

That this council—

1. Recognises that this year marks 25 years since the privatisation of the Electricity Trust of South Australia by the Olsen government; and

2. Acknowledges that the decision to privatise ETSA has not delivered favourable outcomes for the South Australian community.

(Continued from 5 June 2024.)

The Hon. H.M. GIROLAMO (21:33): I would like to thank the Hon. Reggie Martin for bringing this motion to the house. This is a very timely reminder of what horrendously poor economic managers Labor has been in the past and continues to be to this day. Tonight, this motion allows us to reflect on the significant moment in South Australia's economic history, the disaggregation of the Electricity Trust of South Australia, better known as ETSA. This decision was made in response to the disastrous financial crisis brought on by the collapse of the State Bank in 1991, which has shaped the landscape of our state's energy sector for the past 25 years.

It was a disaster not addressed or managed by Premier John Bannon and the Labor Party of the time, despite the late Jennifer Cashmore's persistence in flagging her concerns regarding the financial viability of the State Bank and her major concerns with regard to the lending practices of this institution. If only the men of the Labor Party had listened to this courageous woman. Imagine how many billions of dollars would have been saved.

The collapse of the State Bank remains one of South Australia's most severe economic disasters. As a publicly owned entity the bank's deposits were guaranteed by the government of South Australia. Consequently, when the bank failed, the state was burdened with the enormous debt, a direct result of the mismanagement by the Bannon Labor government.

In 1993, the Brown Liberal government was elected to rectify this dire situation. Faced with the state's unstable financial position and informed by the Auditor-General's findings and the emergence of the National Electricity Market, it was then the Olsen government that took the decisive step to disaggregate ETSA. This involved breaking-up ETSA's generation, transmission, distribution and retail assets, allowing investors to operate them under long-term leases while the state retained freehold ownership. This move was not just about financial survival; it also included implementing stringent regulatory regimes to protect public interest and maintain safety standards. As a result, the state's fiscal health improved considerably, mitigating some of the horrendous damage inflicted by the former Bannon Labor government.

Critics, such as the Greens member the Hon. Robert Simms, have claimed that the privatisation of ETSA led to higher energy prices. However, this is to be disputed. As reported in a report from Ernst and Young in 2013, comparing electricity prices across different states revealed that price increases were actually higher in non-privatised states like New South Wales and Queensland compared to privatised states such as Victoria and South Australia.

Energy experts like Tony Wood from the Grattan Institute and Dr Lynne Chester from the University of Sydney support these findings, indicating that ownership models did not significantly impact price trends. The notion that privatisation is to blame for higher electricity costs is a convenient but misleading narrative. The reality is that the ongoing energy transition, marked by the shift from reliable baseload power to intermittent renewable sources, has introduced new challenges.

My concerns continue and remain to this day. The economic credentials of this government and former Labor governments are appalling. This current government is projecting $44 billion of debt by 2028—a government that was projecting $2.1 billion of interest a year and a whopping $5.5 million a day. South Australians should be very concerned. This government continues to spend and has no consideration as to how the debt will be repaid.

The Hon. N.J. CENTOFANTI (Leader of the Opposition) (21:38): I rise to speak on this motion—

Members interjecting:

The ACTING PRESIDENT (The Hon. D.G.E. Hood): Order!

The Hon. N.J. CENTOFANTI: —and, in doing so, place some thoughts, and indeed facts, on the record in response to the Hon. Reggie Martin's comments last sitting week. It will come as no surprise to the chamber that I will be supporting the thoughtful amendment that the Hon. Heidi Girolamo moved in this place. During his contribution, the Hon. Reggie Martin started with a quote from Churchill:

Truth is incontrovertible. Panic may resent it. Ignorance may deride it. Malice may distort it. But there it is.

It is a quote that suggests that united wishes and goodwill cannot overcome brute facts. I agree with the member entirely, which is why I am keen to walk through some of the facts that the member conveniently left out of his contribution to the chamber last sitting week.

Fact no. 1: the ultimate reason for the privatisation of ETSA was the State Bank disaster, which was then government owned. It was owned by a Labor government at the time and, because of its reckless lending and the government's consequent requirement to bail out the bank, South Australia was left with a debt beyond most people's comprehension.

Let me step the chamber through the history. The Savings Bank of South Australia was established in the colony of South Australia on 11 March 1848. Its sole employee was John Hector, who started the business in a single room in Gawler Place. The first deposit comprised the life savings—that was £29—of an Afghan shepherd, Mr Singh, made by his employer. A month later, the fledgling bank made its first loan of £500 to John Colton, a successful businessman and later politician who, in 1875, was appointed to the bank's board of trustees.

The Savings Bank of South Australia later merged with the former State Bank of South Australia which was established in 1896, becoming the new State Bank, owned by the government of South Australia in 1984. Mr Acting President, as you are well aware, and as previously mentioned, the government of the day in 1984 was a Labor government, and the Labor Premier at the time was John Bannon who governed during the period of 1982 to 1993.

There is no mistaking history. As Winston Churchill said, 'truth is incontrovertible'. The State Bank of South Australia, a government-owned bank, had, through reckless lending, got itself into a huge hole that ultimately led to the resignation of the Labor Premier, John Bannon, in 1992, and a heavy election defeat for the Labor government the following year. That is fact number one.

Fact number two, is that whilst it might have been a choice by the Olsen Liberal government, it was in fact two Labor MPs who crossed the floor to deliver the privatisation of ETSA. It is strange that the honourable member failed to mention that in his preamble. Let me step the chamber through that history because, again, as Winston Churchill said, 'truth is incontrovertible'. Following the 1997 state election the Olsen Liberal government needed the support of an additional two non-Liberal upper house members to pass the legislation, with the Australian Democrats retaining the balance of power on three seats.

However, defectors from Labor in the upper house, Terry Cameron and Trevor Crothers, brought the then Independent member, Nick Xenophon, into play. In 1998, Xenophon voted with Cameron and the government to proceed with the second reading of the ETSA power sale bill. The bill became law when Cameron and Crothers voted with the Liberal government. Both Cameron and Crothers subsequently resigned from the Australian Labor Party because, as we all know, you cannot be a Labor member and cross the floor without getting kicked out, such is their militant nature.

One could also argue the use of the term 'choice'. Choice implies that there is an act of choosing between two or more possibilities. When a state is tasked with paying down an enormous debt that the previous incompetent government has delivered, one could argue that the government of the day had little choice but to sell a state-owned asset in order to pay down this debt, and not leave it to future generations to pay down, which is what we are seeing with the current Labor Malinauskas government, with state debt ballooning to $44 billion over the forward estimates.

Finally, fact number three, the reason we are seeing escalating electricity prices has much more to do with this current government's obsession, and the previous Labor government's obsession with ideology and 100 per cent renewables rather than any privatisation. The previous Labor government's rush to renewables without sufficient planning—

Members interjecting:

The ACTING PRESIDENT (The Hon. D.G.E. Hood): Order! No, enough. We need some quiet from the chamber. I cannot hear the speaker and I would like to hear the speaker, please.

Members interjecting:

The ACTING PRESIDENT (The Hon. D.G.E. Hood): Order! I have asked for order, please. I cannot hear the speaker. The Hon. Ms Centofanti, you have the call.

The Hon. N.J. CENTOFANTI: Thank you, Mr Acting President, for your protection. The previous Labor government's rush to renewables without sufficient planning, and the subsequent closure of the northern power station, saw wholesale electricity prices soar in South Australia. Labor has repeatedly failed to make sure South Australia has sufficient base load generation to keep prices down, or even to keep the lights on.

Under Labor, South Australia has endured the highest energy bills in the nation. During Labor's last two years in office, from 2016 to 2018, the average household bill surged by 26 per cent, amounting to an increase of $477 per household. Additionally, the loss of the base load power led to significant reliability issues, including a statewide blackout. We all remember that—the statewide blackout—that resulted in over seven million customer hours lost due to load shedding.

When the former Liberal Party came to power, we prioritised addressing rising energy prices and implemented various programs and policies to reduce costs. Shortly after the Liberal government was elected in March 2018, the Essential Services Commission of South Australia (ESCOSA) reported that the average residential power bill was $2,244. By June 2021, this figure had decreased to $1,941 and further dropped to $1,823 by December 2021, resulting in a total savings of $421. In late 2021, AEMO announced that in 2020 South Australia had the lowest time-weighted average wholesale electricity price in the National Electricity Market since 2006-07.

However, since the Malinauskas Labor government has taken office, South Australian families have been paying significantly higher electricity bills. Their first state budget cut key programs, like the home battery scheme and the grid-scale storage scheme, which had been effective in reducing energy prices under the Liberal government. Rising energy costs under Peter Malinauskas' leadership suggest a potential return to the high prices and frequent blackouts experienced under previous Labor governments. That is not what the people of South Australia want or deserve.

We the opposition have signalled our intention to have an open-minded conversation about the potential for a civil nuclear industry in South Australia. We are paying some of the highest electricity prices in the world and every option to produce affordable reliable power should be on the table. With nuclear submarines set to be built in South Australia, it makes absolute sense to consider civil nuclear energy generation here, which is why a Speirs Liberal government will establish a royal commission to investigate its viability.

Rather than focusing on partisan motions, such as this one, presented by the honourable member, our attention must be on ensuring that energy is both affordable and reliable for South Australians. This government owes our communities across the state at the very least that much.

The Hon. J.E. HANSON (21:48): Mr Acting President, I tell you what—here we go. We have 16 speeches to go. It seems like quotes are in fashion in this debate, which is good. Murray Weidenbaum—do you know Murray Weidenbaum? If you do not know him, you should know him! He was Ronald Reagan's first chief economic adviser. I am surprised he is not a hero—you should have little figurines of him on your side over there. He was fond of a particular motto, said it quite often, which was, 'Don't just stand there, undo something.'

You have to think about Reaganomics and the context in which he said it, something that might be lost on a lot of people these days, but not this mob over here—they are right into their Reaganomics. Reducing the size of government and lightening its regulatory hold on the private sector became a defining theme of many governments around the world during the era of Reaganomics: the Reagan presidency, the Thatcher prime ministership and many others of various political stripes. It has also greatly inspired and perhaps continues to inspire what we see here today in the South Australian Liberals.

Power utilities are among I think the more reliably profitable enterprises going, and electricity of course is a natural monopoly. Most arguments that the Olsen government back in the day put forward in support of the sale of ETSA included the claim that privatisation would result in a reduction of power prices. This claim was repeated throughout the debate in parliament. Hansard recorded that very well and said it was often repeated throughout debate that there will be a reduction in power prices. So I do not think I really need to say it—

Members interjecting:

The Hon. J.E. HANSON: The Hon. Mr Hood wants me to say it, so I will: how is that going?

Members interjecting:

The ACTING PRESIDENT (The Hon. D.G.E. Hood): Order! The Hon. Mr Hanson has the call.

The Hon. J.E. HANSON: How is the impact of Mr Olsen's comments back in the day, and the Olsen government's comments back in the day that there would be a reduction in power prices if we privatised things—how is that going?

The Hon. R.A. Simms: That's not true: that's a lie.

The Hon. J.E. HANSON: A lie, says the Hon. Mr Simms. Well, I think a lot of people might find themselves agreeing with the Hon. Mr Simms that it was a lie. Another principal point of argument, which the Liberals continue to defend even in the chamber here today, was in relation to state debt. Debt was always a bit of a fallacious argument. Do you know who proved that? Another person who has come up a bit recently, and that is the widely revered Liberal Premier Tom Playford. Tom Playford proved that that was wrong.

South Australia's debt relative to GSP was vastly higher post war than it was when the Olsen government took office. Look at them now: they are all very quiet on the other side now. This is one of those facts, those inconvenient facts that they forget to look at, and that is that—

Members interjecting:

The ACTING PRESIDENT (The Hon. D.G.E. Hood): Order! The Hon. Mr Hanson has the call.

The Hon. J.E. HANSON: —South Australia's debt relative to GSP was higher post war than it was when the Olsen government took office. It was basically double. As the Hon. Reggie Martin pointed out in his speech to accompany moving this very sensible motion, state debt as a percentage of GSP was in the order of 70 per cent near the start of the Playford era. Playford recognised that we could use cheap public borrowing to fund infrastructure investment and governments can continue to recognise that today and use it to good effect.

The argument prosecuted by the Olsen government when state debt was only around 35 per cent of GSP simply suited their, frankly, ideological view of the world that private ownership is preferable to public ownership because it generates private profit, not public benefit. Financially, selling ETSA was a significant mistake. Plenty of economists saw this and they had modelling to back it up. They also had a good idea of the price ETSA needed to fetch in order to justify the sale and deliver value for the South Australian community.

The Olsen Liberals sold it for about half that figure because, at the end of the day, it was purely and transparently ideological. Why keep anything in public hands when there is profit to be made? John Olsen told the electorate quite famously that there is no alternative—using Thatcher's very own infamous phrase. Even today we heard that. That is not merely a strategic manipulation of the truth, it is actually an outright deception because there is an alternative and it is beautifully exemplified by the extraordinary achievements of Tom Playford and his government in building this state and its economy.

If you look at the graph of state debt as a percentage of GSP, you can watch that figure go down year on year on year for the entirety of the Playford administration. So, in short, a Liberal government—a real one—proved that it can be done and it can be done artfully. That was an inconvenient truth for the South Australian Liberals then and it continues to be so now for the South Australian Liberals who sit opposite us here. They focus on the debt fallacy because they dare not focus on the facts—

Members interjecting:

The ACTING PRESIDENT (The Hon. D.G.E. Hood): Order! The Hon. Mr Hanson has the chamber. Please don't address the other side of the chamber. Continue with your speech please, Hon. Mr Hanson.

The Hon. J.E. HANSON: Even now you can see them, they are not listening. It was 70 per cent at the start of the Playford era and 35 per cent at the start of the Olsen government. It was an inconvenient truth for the South Australian Liberals then and it continues to be so now.

They draw attention to public housing because they want to draw attention away from the pathetic pittance of a price that the Olsen government actually accepted for ETSA. They focus on anything they can think of to obfuscate the point, because they dare not actually focus on the real impact that the ETSA sale had on the South Australian community. They do not want to acknowledge the frankly quite deep anger that still remains in the community over that outrageous betrayal.

The Olsen government tried to use debt, and the Liberals generally still use debt, as a tool of instilling fear. They seek to rely on a lack of public understanding of how state debt differs to private debt, and what we characterise as good debt versus bad debt.

The Hon. H.M. Girolamo interjecting:

The Hon. J.E. HANSON: You are financially literate, and you actually do know better, Ms Girolamo. The Olsen government wanted South Australians to fear that the state was at risk of bankruptcy—which was, of course, another deception. They shamelessly used the State Bank crisis and our debt position as a political weapon to pursue their frankly Thatcherite agenda—and they stand here today and defend that tactic still. It was craven, and Tom Playford would have been horrified to see it.

However, the Liberals choose not to disavow those quite devious arguments. Instead, even here now they are doubling down on them. This is what our community will get from the South Australian Liberals: stubborn and prideful denial of inconvenient truths, like the extraordinary loss of opportunity our state suffered as a result of ETSA's privatisation. Incredibly, they want to talk about things like disorderly transitions, and criticise Labor for that phenomenon when it is a result of the Olsen Liberals' deliberate and ideologically driven choice to give away control of our electricity supply and our infrastructure.

It is because of them that we have lost the agility and self-determination that would have facilitated an orderly transition to renewables. The infrastructure, as it stands now, cannot keep up. There is no profit-based incentive to help it along. Policy change is slow to filter through, and hard to use as a lever to drive improvements. We are at the almost total mercy of companies who, quite predictably and not unreasonably, are motivated only by profit. We cannot, should not, and do not expect otherwise from private enterprise.

The Liberals gleefully choose to permit our electricity supply to exist at the mercy of this phenomenon, yet at any subsequent time they sit in the parliament and say, 'Oooh, power prices are too high, power prices soaring, what is the Labor government doing about it?' Well, what did they seek to do about it other than help cause it, and what would they do about it in the future? I guess that as of today we know the answer to that. Quite possibly they will pursue nuclear, the most expensive of the pathways we could take. I do not think South Australians will vote for it.

Let me be very clear: I am not directing blame directly at those who sit on the opposition benches today for the sale of ETSA 25 years ago, but I am very happy that the South Australian people judge them for defending that deliberate choice today, here, in 2024, in this debate. They could do the honourable and credible thing and choose to own the mistakes of their past.

John Bannon, as was raised here today, quite unfairly, but willingly, fell on his sword over the State Bank. That was what the public needed and that is what Bannon delivered. We have done the honest thing and owned up to the mistakes that our party has made in the past, too, in Transforming Health, for example, and in public housing. The work of any government needs to take into account the lessons that we learn from past mistakes. There is actually honour in acknowledging that.

With the arguments they are putting forward today, the Liberals have shown that they are totally unwilling to show the very modest degree of humility that it would take to just admit that selling ETSA was a grave and a dire mistake. The position put forward by the Liberals' amendments to this very simple and straightforward motion, which in its unamended form stands up on the bare facts of history, is that they just had to sell ETSA. That was the position put by Premier John Olsen to the electorate a quarter of a century ago and it is the position the Liberals have chosen to maintain here today.

The Olsen government knew because numerous opinion polls showed that the South Australian people knew it was a bad idea and, evidently, they did not care because they went ahead with the sale, it lost them government and it gave them, well, I am not sure what. I guess some delicious Thatcher points that they crave. I do not understand. I will not stand here and defend privatisation as a practice of government, but there is no credibility in comparing privatising the lottery or the forests to privatising ETSA. It is not apples and oranges. It is apples and fire hydrants. They are fundamentally different.

South Australians do not need a lottery in public hands to be able to afford to keep their lights on—fact. The social aspect of electricity as an essential public service that fundamentally underpins the functional capacity of every South Australian household and every South Australian business is what differentiates the sale of ETSA from every other privatisation that has occurred under the watch of every other South Australian government, full stop.

You can reinvent history all you like. You stick to your guns. They will stick to their guns over there. What you cannot do is wish the truth away. The South Australian people blame the Liberal government for the sale of ETSA. The Olsen government is not fondly remembered by the South Australian people.

Members interjecting:

The ACTING PRESIDENT (The Hon. D.G.E. Hood): Order!

The Hon. J.E. HANSON: The Olsen government is not fondly remembered by the South Australian people. You know who is? Tom Playford. Tom Playford is fondly remembered by the South Australian people. On the occasion of this ignominious anniversary, I welcome the debate that we are having here today, and I wonder today in particular if every member of the opposition supports the federal Liberal proposal for nuclear for South Australia. Let me guess, there is no alternative.

Members interjecting:

The ACTING PRESIDENT (The Hon. D.G.E. Hood): Order! The Hon. Mr Hanson has the call.

The Hon. J.E. HANSON: Members opposite would do well to own or, at a minimum, learn from the mistakes of their predecessors. Some things should remain in public hands not merely because it is right and just but because it is good policy underpinned by sound economics. Playford knew that, the South Australian people knew that, and if only the South Australian Liberals were actually able to take it on board they might find themselves forming government more than once every quarter of a century.

The Hon. B.R. HOOD (22:03): Before I begin, I would like to move the amendment in the name of my colleague the Hon. Heidi Girolamo, namely:

Paragraph 1.

Leave out all words after 'since the' and insert 'disaggregation of the Electricity Trust of South Australia due to the massive state debt caused by the collapse of the State Bank under the former Bannon Labor government';

Paragraph 2.

Leave out paragraph 2, and insert new paragraphs as follows:

2. Notes that the former Bannon Labor government privatised the merged South Australian Oil and Gas Corporation and the South Australian Gas Company, or SAGASCO, prior to its defeat at the 1993 South Australian state election;

3. Notes that the former Rann-Weatherill Labor government privatised ForestrySA, SA Lotteries, the Motor Accident Commission, and the lands titles office whilst in office;

4. Acknowledges that the disorderly nature of the energy transition in South Australia, where base load power has exited the system before a reliable equivalent was in place, has led to higher power prices and lower grid reliability; and

5. Calls on the Malinauskas Labor government to develop an energy policy that will support working South Australian families during this energy crisis.

I rise today to address the motion brought forward by the Hon. R.B. Martin regarding the privatisation of the Electricity Trust of South Australia (ETSA). I do wonder as to why the honourable member has cast this little hook out at this time, but we need to respond. As we mark the 25th anniversary of this event, it is important to reflect on the past, analyse the present and consider the future with a very clear and pragmatic approach.

This motion suggests that the privatisation of ETSA has not delivered favourable outcomes for the South Australian community. While the honourable member's argument is passionate, as it always is from the honourable member, it is crucial to dissect the facts and separate the rhetoric from reality.

Privatisation of ETSA was a decision born out of necessity and not ideology, as we have heard from the Hon. Justin Hanson. It is important to remember the context of the times: the early nineties—fantastic music, but there was something else that was going terribly wrong. It was when our state was grappling with one of if not the largest economic disaster the state has ever seen: the collapse of the State Bank. This was a crisis precipitated by the previous Bannon Labor government.

The State Bank collapse left South Australia with a massive debt and the newly elected Brown Liberal government was tasked with cleaning up this financial mess. The privatisation of ETSA was part of a broader strategy to address this state's dire fiscal situation brought on by the Labor government.

It is important to note that the state retained freehold ownership of the generation, of the transmission and the distribution assets while investors were brought in to operate them through long-term leasehold interests. This move was accompanied by a regime of industry regulation to protect the public interest and maintain safety standards.

The Hon. Reggie Martin claims that privatisation has led to higher energy prices and a less reliable grid; however, I do not believe this assertion stands up to any scrutiny. According to a report by Ernst and Young, electricity prices have increased less in South Australia, a privatised state, compared with other non-privatised states like New South Wales and Queensland. The report has found that, since privatisation, electricity bills have increased by 80 per cent in South Australia compared with 158 per cent in New South Wales and 152 per cent in Queensland.

This data suggests that the issue of rising electricity prices is a national one influenced by a multitude of factors beyond privatisation. It is like blaming your umbrella for the rain: it is convenient but not exactly accurate. Moreover, energy experts have been unable to identify a correlation between privatisation of electricity generators and higher prices.

Tony Wood, for example, who is the energy director at the Grattan Institute, has stated, 'When people say electricity prices went up, they went up everywhere, regardless of ownership.' Dr Lynne Chester, an energy researcher at the University of Sydney, also observed that 'overall, the evidence does not support the claim of either higher or lower prices following privatisation'. These perspectives highlight that blaming privatisation alone for rising energy costs oversimplifies a very complex issue. It is like saying the internet caused global warming. Sure, they happened at the same time, but correlation does not mean causation.

Furthermore, it is worth noting that subsequent Labor governments have also engaged in significant privatisation efforts. As much as the Hon. Justin Hanson would like to downplay them, they are serious. The forward sale of our forests, an asset worth $1.3 billion, was sold for $600 million—$600 million, less than half of what it was worth. If that is not a significant privatisation effort by this Labor government, I do not know what is.

The Hon. J.E. Hanson: The trees affected power prices?

The Hon. B.R. HOOD: I will tell you what they do affect, Mr Hanson, and that is carbon sequestration, which is very important when we are talking about our environment and those types of things.

The Hon. J.E. Hanson interjecting:

The Hon. B.R. HOOD: We still have the trees. It is good, but we do not own them anymore and the people who do repaid that debt within five years. Other privatisation efforts—the SA Lotteries, the Motor Accident Commission and the lands titles office—were all privatised under the Rann-Weatherill administration. It appears that privatisation is not the ideological bogeyman that it is sometimes portrayed to be, but rather a tool that has been used by both sides of politics to address financial challenges—financial challenges like having to build the Adelaide Oval, which is why our forests were sold, and the financial challenges that we will face with a $44 billion debt at the end of the forward estimates, on which we will pay $5 million of interest per day, or equal to three Adelaide Ovals per year—three Adelaide Ovals per year.

Let us turn our attention to the current energy landscape. The transition to renewable energy is a necessary journey—I bet you did not think I would say that—but must be managed with care and foresight. The Malinauskas government's approach has been hasty and it has been poorly planned. Their rush towards 100 per cent renewables without ensuring grid reliability has led to higher power prices and increased instability of our energy supply, the very thing that we are talking about here.

This is not just my opinion; it is reality reflected in the experiences of many South Australians, who face some of the highest electricity bills in the country. During Premier Marshall's term, significant efforts were made to reduce power costs, resulting in a decrease of $421 in the average residential power bill. How does that weigh up to Prime Minister Albanese's supposed drop of $275, which we have not seen? In fact, it is an increase of over $700 in power prices.

Premier Marshall's decrease was achieved through a balanced energy policy that prioritised both affordability and sustainability. In contrast, the current approach under the Malinauskas government has been less effective, leading to higher costs for consumers. It is crucial to understand that this energy transition requires a balanced approach. South Australia has been a leader in adopting renewable energy, but the transition must be managed to ensure energy security and affordability.

I worry that this current government's focus on renewables without sufficient planning for baseload generation, has resulted in significant challenges. The closure of the Northern Power Station without adequate replacement saw wholesale electricity prices soar in South Australia. This failure to ensure sufficient baseload generation has led to major reliability issues, including the infamous statewide blackout.

The Liberal government identified rising energy prices as a major focus and implemented policies to drive those prices down. In June 2018, shortly after the former Liberal government was elected, the Essential Services Commission of South Australia (ESCOSA) identified that an average residential bill totalled around $2,244. By December 2021, this had reduced to $1,823, a total of $421 in savings.

Moreover, in 2020, South Australia achieved the lowest time-weighted average of wholesale electricity prices in the National Energy Market, a significant achievement for our state. Since the Malinauskas Labor government came to power, South Australian families have already paid significantly more for electricity bills.

In their first state budget, the Malinauskas government cut programs such as the Home Battery Scheme and the grid-scale storage scheme, programs that served to drive down energy prices. This short-sighted approach is a clear warning sign that we could return to the days of high power prices and unreliable energy supply under Labor. In fact, it is not that we could; it is that we are.

We also need to consider the broader context of energy markets and global economic shifts. The energy transition is a global phenomenon, and South Australia is not immune to its challenges. However, blaming the privatisation of ETSA, as the Hon. Mr Martin would like to do, for all our energy woes is simplistic and misleading. The real challenge lies in navigating the energy transition responsibly, ensuring affordability and maintaining grid reliability.

The privatisation of ETSA, though challenging, was a decision made to safeguard our state's financial health at that time in history. Looking forward, we have to hold the current government to account for their energy policies and ensure they deliver on the promises of affordability and reliability.

South Australians deserve an energy policy that meets their needs without resorting to ideological extremes. To quote Winston Churchill, as the honourable member did in this initial speech, 'The era of procrastination, of half measures, of soothing and baffling expedients, and of delays, is coming to its close. In its place we are entering a period of consequences.'

We must focus on pragmatic solutions to ensure a stable, affordable and sustainable energy future for all, and that ultimately means a nuclear future for South Australia, not 28,000 kilometres of transmission lines linked to intermittent energy generators of solar and wind. These are nothing but half measures. These are nothing but soothing and baffling expedients that the people of South Australia are already bearing the consequence of.

The Hon. R.A. SIMMS (22:17): I was momentarily speechless, but I have regained my voice, you will be pleased to know.

Members interjecting:

The ACTING PRESIDENT (The Hon. D.G.E. Hood): Order! The Hon. Mr Simms has the call.

The Hon. R.A. SIMMS: Before I address the substance of the motion, I wish to amend the motion as follows.

After paragraph 2, insert a new paragraph as follows:

3. Calls on the Malinauskas government to establish a commission of inquiry to examine reviving ETSA and returning South Australia's electricity distribution and transmission network to public ownership.

I might use this opportunity as well just to indicate that the Greens will not be supporting the amendments advanced by the Hon. Ben Hood on behalf of the Hon. Heidi Girolamo. In doing so, I do make it clear, though, that I do have some sympathy for the critique that the Liberals have made of Labor's inconsistency on the issue of privatisation. Were there to be a separate standalone motion dealing with the Labor Party's history of privatisation, that is something I would be open to considering.

But this is an opportunity to highlight what was in effect the original sin in South Australia's energy policy, the decision that has bedevilled generations of South Australians; that is, the Liberals' decision to sell off ETSA, to sell off our electricity systems here in South Australia and to sell out the people of South Australia and lock generations of South Australians into higher prices and unreliable power. That is a key event that should be condemned by this council.

Also, the Greens want to go further, and our amendment actually calls on the Malinauskas government to establish a commission of inquiry to look at what mechanisms there are that are available for us to take back ownership of our electricity distribution network here in South Australia.

To speak to the substance of the Hon. Reggie Martin's motion, it acknowledges that the decision to privatise ETSA has not delivered favourable outcomes for the South Australian community. With respect, that proposition should be a no-brainer for this chamber. I have not heard the Liberals, in their contributions, advance one positive outcome that has been delivered by the privatisation of ETSA, not one. In fact, all the evidence demonstrates that that has produced bad outcomes for the people of South Australia.

They talk about blackouts, but they have been locked in a state of perpetual blackout for the last 25 years. It is as if the last 25 years did not happen and they have this collective sense of amnesia, and they pretend that they did not sell off our electricity network and they were not the authors of the crisis that our state faces in terms of energy.

It is not just the Greens who are saying that privatisation has been bad news for South Australia. Indeed, 40 per cent of South Australians, according to the Australia Institute back in 2019, blamed the privatisation of ETSA for higher power prices. Three out of five people (60 per cent of South Australians) considered the privatisation to be one of the main sources of upward pressure on prices. They believe it, and they believe it to be the case because it is true.

I was a Chair of a parliamentary inquiry into privatisation when I started in this chamber, and we received a submission from SACOSS that talked about the impact of the privatisation of South Australia's electricity network on increasing inequality. I will draw from some elements of the media release that SACOSS issued in relation to that submission. I will quote from the release directly:

'This new analysis draws on the internationally famous work of economist Thomas Piketty on the drivers of inequality,' said SACOSS CEO Ross Womersley. 'While the data is not perfect, it is…[very] clear that the privatisation of the electricity network in SA has contributed to increased inequality.

'And while it is concerning that the privatisation of the South Australian electricity network looks to have increased inequality, it is even more alarming that the energy regulator is setting rates of return on capital at levels which will continue to increase inequality in years to come.'

The SACOSS submission put three propositions to the multiparty committee:

The rate of return to the owners of the network is greater than the growth rate of the economy, which (as per the analysis of economist Thomas Piketty) will lead to increased inequality.

This is the case based on both the regulated rate of return and the final return to shareholders.

Because of the regressive consumer expenditure patterns, in theory, new capital investments, and in practice schemes like the Residential Energy Productivity Scheme, are more equitably funded from the tax base…rather than by the electricity companies where costs are passed on to consumers.

So SACOSS, through their research and drawing on the views of a leading economist, concluded that privatisation was one of the key factors that was driving inequality. Indeed, over the last 25 years since the privatisation of ETSA we have seen power prices go up here in South Australia by more than 200 per cent. That is astronomical. That is a fact.

There is an opportunity here for the Liberal Party to make amends with the people of South Australia, for them to say, 'We made a mistake,' and to learn from those mistakes. But no, instead what we have seen from the Liberals is brain flatulence over in Canberra: a bizarre, ill-conceived proposal from the Leader of the Opposition, Peter Dutton, to create a nuclear reactor here in South Australia—to set up a nuclear reactor and to put that impost on the people of Port Augusta, with no plan for what is to happen with the nuclear waste.

We know that whenever the Liberals talk about nuclear they are happy to dump the waste on remote communities. That has always been their approach. Where else is it going to go? They do not want it to be in the city and they are happy to dump it in the regions. What is the cost? This proposal has not been costed by the Liberal opposition, but we know, based on the experience in other jurisdictions that have gone nuclear, other places around the world, that the cost will blow out by billions and billions of dollars, and that it will be impossible for us to address our energy needs within the time frame that the Hon. Peter Dutton and the Liberals have identified, because we know that nuclear technology takes a very long time to establish and get off the ground, and it is hugely costly.

This is a burden that the Liberals are proposing should be carried by the taxpayer. Why on earth would we go down that route when we could instead beef up renewables here in South Australia, beef up battery storage and ensure that we can provide publicly owned renewable electricity to the people of our state? Why would we go down the Liberals' radioactive path? It does not make sense.

The other thing that I find really baffling about this latest brain flatulence from the Liberal Party is the fact that they are reviving this idea of a royal commission into the nuclear industry. We had a royal commission, so why are they flogging that dead horse? We had a royal commission and the commission found that this was not economically viable for South Australia. Instead of coming up with any new ideas, the Liberals just pull out that frozen pizza, get it out of the freezer, heat it up again and serve that stale offering up to the people of South Australia. Surely they can do better than that.

I urge them to repent and to support this motion that has been put forward by the Hon. Mr Martin. Mr President, I see you waving at me. I have listened to some of my colleagues speak for two hours tonight and this is my first contribution of the evening, so I am being short, but there is an important point to make, with respect, Mr President. I urge members of parliament to—

The PRESIDENT: The Hon. Mr Simms, I was just waving to you; I just love seeing you, that's all.

The Hon. R.A. SIMMS: Thank you. I urge my colleagues to support this but also to support the Greens' amendment that actually adds some verbs into the Labor Party motion and compels them to do something to ensure that we can take ownership of our electricity providers here in South Australia.

The final point I will make before wrapping up is that I do commend the Malinauskas government for supporting a bill that I initiated on behalf of the Greens to prevent the privatisation of public assets in the future without consideration of a parliamentary inquiry, and without approval of both houses of parliament. This is a really important safeguard and it will ensure that we never repeat these mistakes again. But today is a time to condemn the Liberals for selling off and selling out our state.

The PRESIDENT: I invite the Hon. Mr Martin to conclude the debate.

The Hon. R.B. MARTIN (22:27): Would you like me to address the government's position in regard to the amendments during this?

The PRESIDENT: Why not?

The Hon. R.B. MARTIN: Alright. It should come as no surprise that the government will not be supporting the Hon. Heidi Girolamo's amendments. It is just too far off the topic, I think, for us to be considering it. The motion that is proposed is a very simple motion, as has been pointed out by other members, and I think we like it as that so we will not be accepting those amendments.

The Hon. Mr Simms's amendments, while they are much more in line with the sentiment of the original motion, and I think there are a number of members of the public who would be supportive of it, at this stage the government will not be supporting the Simms amendment but we do respect him for putting it up.

I will be very brief in my concluding remarks, but what I would like to say is that I think this has been one of the best debates that I have witnessed in my short term in the Parliament of South Australia—that is tonight, not including my remarks from two weeks ago—but there were some really impassioned arguments and debates, and it felt like a flexing of the intellectual muscles of the Legislative Council tonight, and certainly worth us sitting very late to hear from everyone.

I would like to thank all those who contributed: the Hon. Heidi Girolamo, the Hon. Nicola Centofanti, the Hon. Mr Hanson, the Hon. Mr Ben Hood, who dropped the proverbial nuclear option in his remarks, and the Hon. Mr Simms. It was good to hear that the Liberals have agreed that power prices are lower now under the Labor government, so it was nice of Mr Hood to point that out.

The Hon. R.P. Wortley interjecting:

The PRESIDENT: Order! We don't need him to make a contribution—don't invite him.

The Hon. R.B. MARTIN: I do appreciate that people took this seriously and put some impassioned pleas into their debate. I encourage you all to support the original motion—it is a simple and factual motion and something that is worth remembering and recognising so that we do not fall into these mistakes again.

The council divided on the Hon. B.R. Hood's amendments:

Ayes 6

Noes 9

Majority 3

AYES

Centofanti, N.J. Girolamo, H.M. Henderson, L.A.
Hood, B.R. (teller) Hood, D.G.E. Pangallo, F.

NOES

Bourke, E.S. El Dannawi, M. Franks, T.A.
Hanson, J.E. Maher, K.J. Martin, R.B. (teller)
Ngo, T.T. Scriven, C.M. Simms, R.A.

PAIRS

Lensink, J.M.A. Hunter, I.K. Lee, J.S.
Wortley, R.P. Game, S.L.

The council divided on the Hon. R.A. Simms' amendment:

Ayes 3

Noes 12

Majority 9

AYES

Franks, T.A. Pangallo, F. Simms, R.A. (teller)

NOES

Bourke, E.S. Centofanti, N.J. El Dannawi, M.
Girolamo, H.M. Hanson, J.E. Henderson, L.A.
Hood, B.R. Hood, D.G.E. Maher, K.J.
Martin, R.B. (teller) Ngo, T.T. Scriven, C.M.

Amendment thus negatived.

The council divided on the motion:

Ayes 9

Noes 6

Majority 3

AYES

Bourke, E.S. El Dannawi, M. Franks, T.A.
Hanson, J.E. Maher, K.J. Martin, R.B. (teller)
Ngo, T.T. Scriven, C.M. Simms, R.A.

NOES

Centofanti, N.J. (teller) Girolamo, H.M. Henderson, L.A.
Hood, B.R. Hood, D.G.E. Pangallo, F.

PAIRS

Hunter, I.K. Lensink, J.M.A. Game, S.L.
Lee, J.S.

Motion thus carried.

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