Australia Plans to Privatize Government Owned Electricity Production

(MoneyWatch)  The Australian Government still owns three electrical power generators; as well as three electricity retail companies. Now the The Australian is saying that the government plans to sell these companies to private bidders. This had been proposed previously by the government but the terms were considered so bad that the Minister in charge, Mr. Iemma, was forced to resign. Now his successor, Mr. Rees, is trying to follow through with the idea. The major complaint about the deal is that while it will bring a cash infusion to the government, it may be saddled with poor labor agreements as well as requiring a reduction in the value of the assets. The labor agreements could lead in the future to strife where the government is forced to protect the private entities by agreeing to whatever the unions demand. This is not uncommon when governments move to privatize state owned properties. Usually the new owners have to inherit the existing labor agreements and these tend to be expensive and less flexible then if negotiated between a company and a union.