ABC Uses "Fact Checking" to Find No Correlation between Electricity Privatisation and Price Increases

Diji1 on 19/12/2018 - 10:19
Last edited 21/12/2018 - 11:27

Apparently journalists are no longer in the fact checking business (because they aren't journalists anymore? Seems like an important part of the job description but OK …) so they outsource that to Universities that also house Government think tanks. Makes sense right?

The headline is:

Fact check: Does privatisation increase electricity bills?

The verdict is:

The AER report contains no consistent correlation between higher bills and privatisation.

https://www.abc.net.au/news/2015-03-25/fact-check-does-priva…

Unfortunately the article also contains a graph, presumably from the same report, that shows a direct correlation between privatisation and electricity price rises.

https://www.abc.net.au/news/2015-03-25/electricity-chart-2/6…

The "fact checkers" are claiming there is no correlation at all. Like climate change deniers ignoring a hockey stick.

The ACCC issued a report in June that found the privatised market was a complete failure. The ACCC recommended stepping in and setting the price instead of the market because it was threatening large business viability.

But I'm sure there's no correlation between that and electricity price rises, right guys?

https://www.accc.gov.au/media-release/accc-releases-blueprin…

Edit: (Since some commenters ignored this) The ACCC report from June 2018 finds that high prices are caused and therefore correlated with privatisation.

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Comments

  • EightImmortals on 19/12/2018 - 10:31
    +1

    "The AER report contains no consistent correlation between higher bills and privatisation."

    The AER is the Australian Energy Regulator for those that didn't know. So the government agency charged with setting electricity prices says there is no consistent correlation between higher bills and privatisation."

    Same things goes for a lot of other world issues these days. The figures say one thing but we are told to ignore the obvious in favour of a vested party's own explanation. Doublethink at it's best.

  • HighAndDry on 19/12/2018 - 10:31
    +22

    Unfortunately the article also contains a graph, presumably from the same report, that shows a direct correlation between privatisation and electricity price rises.

    Unfortunately for you, it shows almost identical price increases for electricity in NSW and QLD, which haven't had any privatisation. That somewhat points to other factors responsible for these price increases (think of "privatisation" as the independent variable, price as the dependent variable, and NSW + QLD as controls where no privatisation took place).

    • [Deactivated] on 19/12/2018 - 11:17
      +4

      Will wait for response.

      Grabs popcorn

      • Baysew on 19/12/2018 - 12:40
        +4

        Spoiler alert: Diji1 is a shrill for the Greens.

        • HighAndDry on 19/12/2018 - 12:48
          +6

          The irony in that position is that if France is any guide, "Green" policies are likely to increase energy prices even further.

          • [Deactivated] on 19/12/2018 - 12:58
            +4

            @HighAndDry: To understand irony, you need logical consistency.

            I don't think Greenies understand irony.

        • pformag on 19/12/2018 - 14:10
          +1

          Taught he would love the ABC, considering

      • HighAndDry on 19/12/2018 - 12:50
        +3

        Diji1
        Last Seen
        39 min ago

        Heh.

    • SBOB on 19/12/2018 - 16:41
      +3

      hey… dont throw logic into the argument.. Its not fair

    • mattyman on 20/12/2018 - 10:22
      -1

      In WA there's talk of selling off the publicly owned electricity organisations. Before that can happen they need to look like they are turning a profit so prices go up. Comparing prices directly to whether a company is public or private only tells half a story.

      • HighAndDry on 20/12/2018 - 10:24
        +1

        Again - I used NSW and QLD as examples of states that haven't done any privatisation and which has also seen price increases. Why are you bringing up WA? Go find indications that NSW and QLD are looking to privatise and you might have a better argument.

        • UniversalAverage on 20/12/2018 - 15:05

          What are you talking about?? The controlling interest in all of metropolitan NSW power distribution companies was privatised in 2015/16 for the following 99 years under Mike Baird? Not to mention the 100% sale of the distribution company Transgrid?

          Edit: Wrong year and premier.
          Edit 2: Was actually correct on the premier…

    • Chandler on 20/12/2018 - 10:31

      What do you mean no privatisation?

      From July 2007 Queenslander's no longer paid Energex (the state-owned distributor) for their energy, and were free to choose their own retailer.

    • Diji1 on 21/12/2018 - 10:40
      -3

      Unfortunately for you, it shows almost identical price increases for electricity in NSW and QLD, which haven't had any privatisation.

      Unfortunately for you NSW was privatised in 1997 and Queensland in 2010.

      • whooah1979 on 21/12/2018 - 10:55
        +1

        Both Energex and Ergon are SOE which is owned by the QLD government.

        https://en.wikipedia.org/wiki/Ergon_Energy

        Ergon Energy is a subsidiary company of Energy Queensland Limited (EQL) a Government owned corporation owned by the Government of Queensland.

        https://en.wikipedia.org/wiki/Energex

        Energex is an Australian electric power distribution company owned by the Government of Queensland.

      • HighAndDry on 21/12/2018 - 11:15

        If you're going to lie, at least make it one that's not easily disprovable on a quick Google search?

        NSW

        https://www.abc.net.au/news/2015-06-03/electricity-privatisa…

        Updated 4 Jun 2015, 7:12am

        Legislation allowing the partial lease of the New South Wales' electricity network has passed through the NSW Parliament.

        QLD

        https://www.afr.com/news/politics/qld-left-behind-on-electri…

        Updated 13 May 2016 — 5:44 PM

        The Queensland Labor government will be under pressure to sell its ageing electricity network

        And in any case - even if your lies were facts, that puts a big kibosh on the timeline for privatisation correlating with price increases in that graph doesn't it?

  • pformag on 19/12/2018 - 10:40
    +2

    Weird how WA, where electricity prices are set by the government, not private, had the highest rate increase in the country. 6.5-7%% 3 years running. In VIC, it doesn't help when they close down the Hazelwood coal-fired power plant + higher gas prices, which increase the cost of operating gas-fired generators.

    In the ACCC report, it says Regulation was one of the key issues.

    • D C on 19/12/2018 - 10:46

      it says Regulation was one of the key issues

      Why was regulation needed?

      • HighAndDry on 19/12/2018 - 12:13
        +3

        Because being an industry which:

        1. Provides an essential service,
        2. Has extremely high barriers to entry, and
        3. Is dominated by a low number of existing suppliers,

        There is unlikely to be sufficient competition to allow the usual free market forces to force the players in that industry to an otherwise competitive price-point.

        • D C on 20/12/2018 - 01:01

          . Because being an industry which:

          And did we really need to change it?

          • HighAndDry on 20/12/2018 - 10:25
            -1

            @D C: If you restricted what we did to only those things we need to do, we'd still be stuck in caves.

            "But we didn't need to do that" is not a valid argument against anything.

    • iseenya on 19/12/2018 - 12:44

      Here in WA, electricity pricing was stable for many years, with successive governments not wanting to be known as the one that finally increased charges. Eventually it became clear that maintenance of the distribution network was falling behind safety requirements and the then government decided to raise the price to remedy that situation in preparation for privatisation, so making the sale a more attractive proposition.

      Privatisation still hasn't happened however, largely because WA coalition governments (reliant on support from WA National MPs in country seats), fear that the present subsidisation of country users by Perth consumers would cease.

  • payton on 19/12/2018 - 11:40

    Who checks the Fact Checker?

    • Maglia Nera on 19/12/2018 - 12:03
      +5

      The Fact Checkerer of course

    • [Deactivated] on 19/12/2018 - 16:00

      Diji1… apparently.

  • Strahany on 19/12/2018 - 11:44
    +5

    sigh

    Do I really have to say correlation =/= causation?

    As others have pointed out, states that do not have privatised electricity have roughly equal (or even greater) price rises. If you point to price rises in privatised states as “proof” that privatisation causes increases in electricity costs, someone else can do the same for non-privatised states and their claim would be quality valid (or, rather, invalid).

    I would suggest that the reason why the report does not state there is a correlation is because people who have a very loose understanding of basic rational thought would easily get confused and come to an incorrect conclusion. They would otherwise have to say there is also correlation between non-privatisation and increased electricity costs, which would only further confuse these people.

    • [Deactivated] on 19/12/2018 - 12:59
      +3

      Since the Green's party was founded, the Earth's average temperature has increased and the sea level has rised.

      Thoughts?

      • papachris on 20/12/2018 - 03:46
        +4

        Three thoughts:

        1. risen, not rised.

        2. Since insert name of ANY political party here was founded, the Earth's average temperature has increased and the sea level has risen.

        3. The answer is obviously all the political hot air heating the planet…

    • Diji1 on 21/12/2018 - 10:41

      Do I really have to say correlation =/= causation?

      No you're ignoring the issue.

      They're saying correllation doesn't exist when it plainly does. Forget what caused it, they aren't considering that.

  • altomic on 19/12/2018 - 13:11
    +2

    of course.

    it's the ABC reporting this.

    Gough Whitlams love child.

    formerly In the pocket of Labor.

    but now kowtowing to the Liberals due to their slashing of the arts and their advancement of the interests of Rupert Murdoch.

    If people voted for neither of the big parties then we'd have virtually free energy powered by solar and wind, and crime would be down 87% and unemployment would not exist.

    /s

    • orangetrain on 19/12/2018 - 14:51
      +1

      That's why a vote for Clive Palmer will make Australia great again

      • papachris on 20/12/2018 - 03:51
        +1

        Username checks out. Welcome, Donald…

    • Ozpit on 20/12/2018 - 09:09

      … and the global temp would fall and we could all live in igloos (home ownership crisis solved) … and the sea level would fall and mainlanders could walk/ski to Tassie for their hols … and ice skate on Lake Gordon. Bliss.

  • SewerCider on 19/12/2018 - 13:16

    Got anything more recent than March 2016?

  • qwerty on 19/12/2018 - 14:58

    Who fact checks the fact checkers ?

  • SBOB on 20/12/2018 - 06:28

    Why hasn't Diji come back to further discuss this issue?
    Come on Diji, remind us all about the issues with our two party political system while you're here ;)

  • ozboygsl on 20/12/2018 - 08:08
    -3

    The words "fact check" and the scum " abc" { Australia's most Biased Corporation} being used in the same sentence. Interesting.

    • Speckled Jim on 21/12/2018 - 18:55
      +1

      Ignoramus.
      RMIT does the research, ABC is the broadcaster.

      • ozboygsl on 25/12/2018 - 08:27
        -1

        cretin. I didn't say that the abc does the research.- try thinking outside your abnormally small box.

        • Speckled Jim on 25/12/2018 - 10:01

          Oh, just shooting the messenger then. Clever you!

  • boccos on 20/12/2018 - 08:22

    I have been watching the AER Website for many years. There is a chart that tells the cost of Wholesale electricity paid by each State in each report. There has been only minor movement in the price the States pay. The price they SEll it for though has increased substantially (in Qld at least, and also seems to have increased in other east-coast States, on checking). On top of the increases, there are added fixed charges; a meter reading fee, and a grid maintenance and some extra for a grid updating fee.
    Pure and simply in my mind, the term "Price Gauging' is a relevant and fair term describing the issue. Example, the Year-to-date (4th -10th Nov) wholesale price average paid by Qld is $81 per Megawatt or $ .081 per KWH.(if my math is correct)
    Reference:
    https://www.aer.gov.au/system/files/D18-166697%2020181104%20…

  • Speckled Jim on 20/12/2018 - 09:01

    ALL energy has sharply risen since 2003(ish).

    In the US, the Repuglicons argued that invading Iraq would decrease crude oil prices. Yeah.

    It's been expertly curated to achieve price parity per joule of energy.
    Think going for an EV will save you money? Think again!

  • Diji on 20/12/2018 - 09:36
    -1

    One graph doesn't make for a correlation though. Reading the article, it seems as though prices have risen in other states despite less (or lack of) privatisation.

  • Whisper Quiet on 20/12/2018 - 13:36

    So you guys need a graph to tell the story… In Adelaide it's been privatised and we have had increases to sometimes over triple the amount it was within a year. I don't need no doctored graph to work out privatisation has caused huge price increases! Even businesses have shut down because Electricity bills went up so high. In one case it went from $20,000 to over $100,000 for the year!

  • Diji1 on 21/12/2018 - 10:57
    +1

    Check out how every single one of the people above claiming that there's no correlation between prices and privatisiation, and implying that privatisation has no effect (seriously), has ignored the ACCC report which says privatisation has failed because of high prices. ie. it's correlated and the cause is privatisation.

    • Speckled Jim on 21/12/2018 - 18:52
      +1

      They can rest easy in the knowledge that the latest in never-ending private health insurance premium increases since Howard's days is the lowest gouge ever at ~3.8% IIRC.

      Inflation and income almost stagnant but they need to keep propping up private health! Wonder why that is?

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