That this was done with less staff, is due to good management and initiative which is generally lacking in government organisations.
Posted by Shadow Minister, Sunday, 24 January 2016 5:24:40 PM

So you are saying that they performed better than government organisation and did so with less staff, hence lower costs.

So why did the priced rise like they did?

If their costs were lower and performance productivity increased?

Oh! I know why?

All the savings went into the pockets of CEO's and the price increases were to pay the shareholder investors.

Wolly,

The Victorian generation and network was was so badly run that it was costing the taxpayer money to keep it going. The privatisation helped drastically reduce the budget deficit left by Labor, remove the cost of subsidizing this network, and provide tax on profits and wages.

Aidan,

As generation sells power on a bidding basis there is no justification for this to be government owned. Regards the monopoly networks, price regulation removes justification for government ownership.

There is rarely a case for generation to be government owned, but I can think of three situations where there is one:
• Where there isn't sufficient competition to prevent them from manipulating the price.
• Combined heat and power facilities are well suited to municipal ownership.
• Very capital intensive facilities (nuclear and some renewables) can be more efficient in the public sector because of their lower cost of borrowing.

Others may be able to think of other situations where there is a case. And please keep in mind that i didn't say there was a compelling case – obviously the strength of the case depends on the specifics of the situation.

If the regulators were sufficiently tough, that may remove the justification for government ownership of the network, though that's far from certain because governments can borrow more cheaply. But our regulators have been complicit in the ripoff, giving the network companies a guaranteed return on investment much higher than the cost of borrowing, and with little regard to what investment is actually needed. A complicating factor is that because of the slack regulation, even where the network is in public hands the government has used it as a cash cow instead of passing the savings on to electricity users.

The biggest hazard of privatisation is that it may end up being controlled by accountants instead of engineers, and they will opt for the false economy of cutting back on maintenance.

Aidan,

Of your three reasons given why generation should not be privatised:
1 Over pricing can be controlled by regulation and high profits bring in competition
2 This applies just as well to private generators such as in Germany,
3 Efficiency is generally better in private hands.

Dear Shadow Minister,

You wrote;

“SR, First you claim that privatisation increases costs to consumers and reduces maintenance, Next you claim that costs in Victoria are in lock step with other states. Make up your mind.
http://theconversation.com/myths-not-facts-muddy-the-electricity-privatisation-debate-38524
This detailed comparison supports the contrary view.”

Did you even read your own link?

Its conclusions were:

“Does privatisation always lead to higher or lower electricity prices? No”
“Are electricity businesses more efficient in public or private hands? The jury is still out.”

Victoria has gone from the lowest cents/kwh charges of the Eastern states pre privatisation to the highest in 2014.

The Bushfire Royal Commission and subsequent civil action showed most of the deadliest fires where caused by powerline issues. In the preceding 7 years before Black Saturday the top three energy distributors underspent in maintenance and operating costs on their own figures by between 10-30% each year.

I repeat, we got less maintenance done which directly lead to lives lost, a shift from on the ground workers to salespeople and managers, and no savings in electricity charges.