The corporate raiders of the world have a very nasty case of indigestion after overindulging massively for a decade or so, and that's very bad news for Mick Costa, Minister Representing Merchant Banks, in the NSW Labor government.
Costa wants to sell the state's electricity network to corporate raiders, probably with Macquarie Bank in the mix in some way, but as a report in today's Sydney Morning Herald points out, the raiders have a bad attack of gas (for which we all have to suffer the consequences) and have lost their appetite.
The global credit crunch makes loans a lot more expensive, and it will probably be difficult to find a buyer for NSW electricity system, big-end-of-town adviser Standard and Poor's says.
This is extremely bad news for Mick Costa, who is reportedly planning to follow former Labor premier Bob Carr into a financial career. He may have left his run too late. Carr jumped while the bulls were in full cry, but whether Costa will be of much use to his banker mates in the new circumstances is questionable.
Costa is cracking hardy, saying: "Standard and Poor's provided yet more evidence that electricity was an increasingly risky business from which the government should exit".
Hang on a minute, isn't electricity an essential service? Costa seems to be saying it's okay to hand over this essential service to a company that's silly enough to invest in a risky industry. What happens when the company that makes such a bad business decision goes bust?
Costa also repeated the claim that the power generators would not be sold. As Bernie Riordan has already pointed out, leasing the facilities to private companies for 99 years or so amounts to selling them, because at the end of that time the leasors would own any improvements.
All in all, things are not looking good for Costa's jump to the big end of town. Better go now, Mick, if the offer's still on the table. It may not be for long. I hope that doesn't mean we get stuck with you.
Showing posts with label privatisation. Show all posts
Showing posts with label privatisation. Show all posts
Friday, February 15, 2008
Friday, February 8, 2008
Time's up for the bankers' friend
Breakfast has been a bit quiet at my place for the past week or so. The once deafening crowing of the neocons from the opinion pages of the papers has become the odd cluck here and there.
Minnie Devine, for instance, was reduced to writing about house renovations a day or so ago. Albrechtson and Henderson churned out some ho-hum stuff about the federal government's proposed apology to indigenous Australians. (Yes, we know it's symbolism that doesn't mean much without real policies to back it up, but on Australia Day some at least of the neocons seemed to think symbolism was quite important. Have they really lost interest in symbolism since then or is it just this particular piece of symbolism that sticks in their throats?)
Of the other neocons, Sheridan seems to be missing in inaction (perhaps on leave) and a politically sobered up Shanahan is off to greener pastures in New York, apparently.
Things brightened up this morning with NSW Labor Party president Bernie Riordan's call for Treasurer Mick Costa to resign now, rather than next year, when Costa's fat lifetime parliamentary pension falls due after eight years in Bullshit Castle (sometimes called the NSW Parliament).
Riordan, also secretary of the Electrical Trades Union, said Costa had told him he would retire from the gas house next year and offered him his parliamentary seat. That shows pretty much what the bankers' mate thinks about consulting the ranks of the Labor Party on such matters. Costa apparently thinks he owns the seat and it's his to dispose of.
Riordan was a touch annoyed that Costa had said the NSW Labor government would go ahead with the privatisation of the state electricity system regardless of Labor policy, which already opposes such a sale, and of a proposed Labor Party state conference specifically called to consider the matter. Costa went further and he didn't care if the Labor Party expelled him, the sale would go ahead.
You can see Riordan's point. Parties have policies. In the Labor Party those policies are developed by the ranks of the party, including affiliated unions. Politicians elected to represent the Labor Party are expected to carry out those policies. The process is a bit different in the Liberal Party, which doesn't have many members or affiliates, but which listens very carefully to business-funded think tanks, chambers of commerce, big banks, and the like. Costa appears to have become confused about which party he's in.
Riordan's point seems straightforward enough: parties have policies and elected politicians of those parties work to make those policies law, but a lot of politicians over the years seem to have had a lot of difficulty with it.
Once they've got their bums on the leather benches plenty of MPs seem to think they can do whatever they like. Just to name a couple of famous examples, Billy Hughes, a Labor prime minister, thought he could support conscription for World War I even though the Labor Party opposed it, so Labor expelled him. William Holman, Labor premier of NSW at the time, also supported conscription, was expelled and went over to form a right-wing government with the Nationalists. He survived one election but lost his seat in 1920. Hughes and Holman were known forever after in the labour movement as Labor rats.
Apparently Riordan has ruffled a few feathers at cowards' corner, as the Sydney Morning Herald reports a “senior government source” saying: “there was outrage within Government that the party president is acting that way”. How come it's an anonymous source? Riordan is prepared to speak up for his views, and in support of Labor policy, why is the government source not named? Ashamed would probably be hoping for too much, as moral fibre is not a highly valued quality on Macquarie Street. Keeping options open is more likely.
And just in case the point is lost, let's hear it again: Riordan is speaking up in support of Labor policy and some brave soul high up in the Labor government says the government is outraged.
Costa says he doesn't care if Labor expels him, the privatisation will go ahead. No doubt that's causing the odd bit of outrage among Labor Party members and others who helped to put Costa in parliament thinking he would represent them. If they had thought the big end of town needed more representation, they would have voted Liberal.
Off you go, Mick. You don't represent the labour movement and you shouldn't be in the Labor Party. Your merchant banker mates will look after you, so you don't need the pension. Go now!
Minnie Devine, for instance, was reduced to writing about house renovations a day or so ago. Albrechtson and Henderson churned out some ho-hum stuff about the federal government's proposed apology to indigenous Australians. (Yes, we know it's symbolism that doesn't mean much without real policies to back it up, but on Australia Day some at least of the neocons seemed to think symbolism was quite important. Have they really lost interest in symbolism since then or is it just this particular piece of symbolism that sticks in their throats?)
Of the other neocons, Sheridan seems to be missing in inaction (perhaps on leave) and a politically sobered up Shanahan is off to greener pastures in New York, apparently.
Things brightened up this morning with NSW Labor Party president Bernie Riordan's call for Treasurer Mick Costa to resign now, rather than next year, when Costa's fat lifetime parliamentary pension falls due after eight years in Bullshit Castle (sometimes called the NSW Parliament).
Riordan, also secretary of the Electrical Trades Union, said Costa had told him he would retire from the gas house next year and offered him his parliamentary seat. That shows pretty much what the bankers' mate thinks about consulting the ranks of the Labor Party on such matters. Costa apparently thinks he owns the seat and it's his to dispose of.
Riordan was a touch annoyed that Costa had said the NSW Labor government would go ahead with the privatisation of the state electricity system regardless of Labor policy, which already opposes such a sale, and of a proposed Labor Party state conference specifically called to consider the matter. Costa went further and he didn't care if the Labor Party expelled him, the sale would go ahead.
You can see Riordan's point. Parties have policies. In the Labor Party those policies are developed by the ranks of the party, including affiliated unions. Politicians elected to represent the Labor Party are expected to carry out those policies. The process is a bit different in the Liberal Party, which doesn't have many members or affiliates, but which listens very carefully to business-funded think tanks, chambers of commerce, big banks, and the like. Costa appears to have become confused about which party he's in.
Riordan's point seems straightforward enough: parties have policies and elected politicians of those parties work to make those policies law, but a lot of politicians over the years seem to have had a lot of difficulty with it.
Once they've got their bums on the leather benches plenty of MPs seem to think they can do whatever they like. Just to name a couple of famous examples, Billy Hughes, a Labor prime minister, thought he could support conscription for World War I even though the Labor Party opposed it, so Labor expelled him. William Holman, Labor premier of NSW at the time, also supported conscription, was expelled and went over to form a right-wing government with the Nationalists. He survived one election but lost his seat in 1920. Hughes and Holman were known forever after in the labour movement as Labor rats.
Apparently Riordan has ruffled a few feathers at cowards' corner, as the Sydney Morning Herald reports a “senior government source” saying: “there was outrage within Government that the party president is acting that way”. How come it's an anonymous source? Riordan is prepared to speak up for his views, and in support of Labor policy, why is the government source not named? Ashamed would probably be hoping for too much, as moral fibre is not a highly valued quality on Macquarie Street. Keeping options open is more likely.
And just in case the point is lost, let's hear it again: Riordan is speaking up in support of Labor policy and some brave soul high up in the Labor government says the government is outraged.
Costa says he doesn't care if Labor expels him, the privatisation will go ahead. No doubt that's causing the odd bit of outrage among Labor Party members and others who helped to put Costa in parliament thinking he would represent them. If they had thought the big end of town needed more representation, they would have voted Liberal.
Off you go, Mick. You don't represent the labour movement and you shouldn't be in the Labor Party. Your merchant banker mates will look after you, so you don't need the pension. Go now!
Thursday, January 24, 2008
Merchant bankers' mate
I doubt that Mick Costa reads much. The day the Australian Stock Exchange suffered its biggest crash since October 1987, Costa was talking up the glories of handing over the electricity system of New South Wales to corporate raiders.
Perhaps Costa hasn't heard that the inability of the US to provide affordable housing to a goodly chunk of its population has caused a global credit crisis, and the days of cheap money are over for quite some time to come. As a result, even if a buyer can be found for the NSW electricity system there's a fair chance the buyer won't be able to find a lender to provide the necessary credit.
Even if the buyer does find a lender, the credit is likely to be so expensive that the buyer will demand a bargain price for the public assets of NSW. As well, of course, electricity users should be prepared for very steep price rises.
Costa is the Treasurer in Premier Morris Iemma's NSW Labor government, and an enthusiastic right-winger. He was on the left for a while when he was younger, briefly a member of two Trotskyist groups, firstly the Socialist Labour League (now Socialist Equality Party) and later the Socialist Workers Party (now Democratic Socialist Perspective).
Costa got himself into parliament by way of a stint as a railways union official and then head of the NSW Labor Council (now Unions NSW), and one of his passions in office has been building freeways at the expense of investment in rail and other infrastructure. No doubt he said thanks and goodbye to the railways employees who helped to bump him into parliament.
The fact that Costa is a member of the Labor Party seems to be purely accidental. His present politics would more naturally place him in the Liberal Party — and not necessarily its liberal wing.
Costa may be the purest example in Australian parliamentary politics of a true extremist: someone who swings whichever way the breeze is strongest. If it's to the left he's far left, and if it's to the right, he's all the way in that direction. This is not meant as a reflection on any section of the left, but on Costa's weird political gyrations.
With a bit of luck Costa's boat will run aground way out there on the far right and, like so many other Labor politicians, he'll take the money and run — straight into the arms of the merchant bankers and other corporate creepy crawlies he has represented so well in his time in parliament.
That's a strong possibility, as he's unpopular in the Labor Party, unlikely ever to be top dog, and there are strong rumours that he won't stay in politics for very long after he clocks up 10 years in parliament, at which time he will become eligible for a very generous lifetime pension and other lifetime perks of office.
It must be a fair bet that he will eventually join the growing ranks of former politicians, Liberal and Labor, on the staff of Macquarie Bank or some other corporate raider.
The outcome of the NSW government's attempt to sell the electricity network is by no means certain. The NSW Labor Party rejected a previous attempt, by the Labor government of Premier Bob Carr, to privatise electricity. This attempt will go to a NSW Labor Party conference, and plenty opponents of the privatisation are working hard, as Greens MP John Kaye points out.
Other links: Privatise Costa, not services, Hundreds target Costa over electricity privatisation, Privatisation news, Iemma is too stupid or too proud, Public power not private profit, Critique of the project to privatise and marketise electricity, Montana's public power movement, Power sell-off will lose NSW billions, The baseload myth
Perhaps Costa hasn't heard that the inability of the US to provide affordable housing to a goodly chunk of its population has caused a global credit crisis, and the days of cheap money are over for quite some time to come. As a result, even if a buyer can be found for the NSW electricity system there's a fair chance the buyer won't be able to find a lender to provide the necessary credit.
Even if the buyer does find a lender, the credit is likely to be so expensive that the buyer will demand a bargain price for the public assets of NSW. As well, of course, electricity users should be prepared for very steep price rises.
Costa is the Treasurer in Premier Morris Iemma's NSW Labor government, and an enthusiastic right-winger. He was on the left for a while when he was younger, briefly a member of two Trotskyist groups, firstly the Socialist Labour League (now Socialist Equality Party) and later the Socialist Workers Party (now Democratic Socialist Perspective).
Costa got himself into parliament by way of a stint as a railways union official and then head of the NSW Labor Council (now Unions NSW), and one of his passions in office has been building freeways at the expense of investment in rail and other infrastructure. No doubt he said thanks and goodbye to the railways employees who helped to bump him into parliament.
The fact that Costa is a member of the Labor Party seems to be purely accidental. His present politics would more naturally place him in the Liberal Party — and not necessarily its liberal wing.
Costa may be the purest example in Australian parliamentary politics of a true extremist: someone who swings whichever way the breeze is strongest. If it's to the left he's far left, and if it's to the right, he's all the way in that direction. This is not meant as a reflection on any section of the left, but on Costa's weird political gyrations.
With a bit of luck Costa's boat will run aground way out there on the far right and, like so many other Labor politicians, he'll take the money and run — straight into the arms of the merchant bankers and other corporate creepy crawlies he has represented so well in his time in parliament.
That's a strong possibility, as he's unpopular in the Labor Party, unlikely ever to be top dog, and there are strong rumours that he won't stay in politics for very long after he clocks up 10 years in parliament, at which time he will become eligible for a very generous lifetime pension and other lifetime perks of office.
It must be a fair bet that he will eventually join the growing ranks of former politicians, Liberal and Labor, on the staff of Macquarie Bank or some other corporate raider.
The outcome of the NSW government's attempt to sell the electricity network is by no means certain. The NSW Labor Party rejected a previous attempt, by the Labor government of Premier Bob Carr, to privatise electricity. This attempt will go to a NSW Labor Party conference, and plenty opponents of the privatisation are working hard, as Greens MP John Kaye points out.
Other links: Privatise Costa, not services, Hundreds target Costa over electricity privatisation, Privatisation news, Iemma is too stupid or too proud, Public power not private profit, Critique of the project to privatise and marketise electricity, Montana's public power movement, Power sell-off will lose NSW billions, The baseload myth
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