Page 823 - Week 04 - Tuesday, 16 June 1992
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waterways but also provides a useful community service for which the local government pays a fee. It currently has before it consideration of a possible service to assist the Fire Brigade in servicing fire hydrants. These services and the pensioner rebates recompense the reduction in tariffs.
This corporatisation is part of the New South Wales Government's strategy for micro-reform. It has shown that it encourages efficiency by exposing the board to competition. It is also more accountable and has a more market focused atmosphere. It operates under licence, which determines how the service is to be delivered, and it means that customers always have a clear knowledge of the pricing policy. It is certainly not possible for the board to suddenly drop increased charges on their customers without long-term notice. They operate on a long-term business plan.
The Western Australian Electricity Authority is currently undergoing corporatisation. A steering committee was formed to investigate how it should be corporatised and a paper recommending that corporatisation proceed was finally put before the Cabinet of the Western Australian Government and approved. It is expected that legislation bringing this into effect will be introduced in the new year. In this case, the Western Australian Government will not bring the organisation under the corporations law because it feels that the responsibilities of the directors would be too onerous. The Minister will have the overall responsibility, but the board of the corporation will have responsibility to the Minister and it will be run in the best commercial interests.
One of the main reasons for the Western Australian Government taking this course of action was the changing environment for greater competitiveness in the delivery of gas and electricity services. Corporatisation provided the right structure and was clearly the right way to go. In the words of a spokesman from this organisation, it would be an increasing struggle for the Electricity Authority to remain as a government utility.
Corporatisation is not a new concept by any means. In fact, Australia is lagging behind the rest of the world in this regard. The United Kingdom has been progressively moving this way since as far back as 1979. Other countries that have corporatised public utilities are Malaysia, Japan, Singapore, the Philippines, Canada, Denmark, Czechoslovakia, Hungary, Africa, the countries of Central and South America, and New Zealand. They have all turned to corporatisation to achieve greater efficiencies and economies.
Dr Roderick Deane, chief executive of the Electricity Corporation of New Zealand Ltd, in his publication Reflections on Privatisation pointed out that, despite reforms taking place against the background of an economy undergoing a substantial adjustment process and thus suffering from relatively slow economic growth, most of the new state-owned enterprises are doing extremely well. For example, the Electricity Corporation has increased its volume of sales despite the economic recession, producing an increase in electricity's share of the total energy market for the first time in eight years. It is important to note that Dr Deane acknowledges that many of the efficiency gains achieved to date can be attributed to the Government's determination to push ahead with reforms, despite reservations in some quarters and the political cost involved.
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