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The Iemma Government has confirmed it has no idea what impact the carbon tax will have on the sale price of its generators and the Premier himself revealed new doubts the private sector will invest in new generation assets at all after the sale, Shadow Minister for Energy Mike Baird said today.
“The public will be reassured the Auditor-General will be assessing the Government’s power plans before any sale proceeds, as we have seen the Government itself confirm its plans pose many unanswered questions,” Mr Baird said.
“The key thrust of the Owen report, and Morris Iemma’s argument all along, has been that privatisation will be the only basis for providing new generation for the State.
“However the Premier told Parliament this month that if the private sector doesn’t do it, they would*. Doesn’t this undermine all of his arguments for the past few months? The simple response from all Members of Parliament is we look forward to an independent report to show us the true facts, not those spun by your PR firm.”
Mr Baird said Treasurer Michael Costa also added to the state of confusion by confirming that there are aspects of the sale that could not yet be explained.
“When asked in Parliament this month whether the huge uncertainty around carbon trading (also a key concern of the Owen report) could significantly erode the price of the generators, the Treasurer admitted he didn’t know**.
“That’s why we’re relieved the Government has agreed to our suggestion that the Auditor-General present an independent report to Parliament before any transaction takes place.”
Mr Baird said recently released projections estimate the price of the carbon tax to be between $20*** and $100**** a tonne in forward estimates.
“Considering the State’s generators emit 57.8 million tonnes of CO2 a year, that means an annual cost to the prospective buyers of between $1 billion to $5 billion.
“With such uncertainty apparent, any private investor is likely to focus on the top end of that liability when negotiating a price – in other words selling with no clarity on the carbon tax may cost NSW billions in the sale,” Mr Baird said.
MEDIA: Lisa Harrington - 0406 726 880
* Premier Iemma, “If no [private] investment occurs… the Government will be able to pursue a baseload power station development.” – NSW Parliament 4/6/08
** “We cannot assess the final impact until we see the detail of the carbon-trading regime.” – Treasurer Michael Costa, NSW Parliament, 5 June 2008
*** Citigroup analysis reported in The Sydney Morning Herald – 20/5/08 ‘$19 a tonne: the price to pollute’
**** Deutsche Bank analysis reported in The Australian – 5/6/08 ‘Price of carbon permits threat to economy’
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