The seat of power

THIS week WA Business News hosted a number of players from the energy industry.

It was a challenging occasion, mainly because Western Power declined a place at the discussion.

It would be easy to say that, if Western Power or its representatives are the only ones who strongly disagree with the Electricity Reform Task Force’s recommendations, then the reforms must be right.

This is particularly the case if one looks at Western Power’s monopoly position and, it appears, at times obstructionist behaviour when it comes to letting newcomers into the market.

However, it is not that simple.

Firstly, Western Power declined to be represented because it did not wish, as a government-owned corporation, to be seen to be actively opposing the recommendations of an independent task force established by that very same government.

Politically that might be astute, but it does nothing to help the debate on such an important matter.

I have spoken at length to many people associated with Western Power, past and present, about the matter. Many hold grave concerns.

I think Western Power should have been broken up long ago and the various bits privatised – something that is now unlikely. In fact, the task force has suggested that the current model reduces the possibility of privatisation because it is the monopoly position that is so valuable.

I have always felt that governments should only use regulation to ensure markets operate properly, not own them, at least not in the long term. Anyway, as far as most in the room at our electricity luncheon were concerned, reform is a fait accompli and therefore not really worth debating.

Let’s hope that such a mood of elation does not allow mistakes to be made – or any small group to take the lion’s share of the spoils of victory.

Clearing balance

WITH planning well advanced in this paper’s feature on land clearing, I was fascinated to watch this week’s 4 Corners feature on the CSIRO and sustainability.

Land clearing is a huge issue in Australia, quite rightly, but no-one can wave a magic wand and say stop it and everything will get better.

Many farmers have banked on developing uncleared land as part of their future.

It would be unfair to change that without compensating them for their loss.

Remember, there is a cost and benefit to all of us in action of this nature and that – as 4 Corners tried to examine – goes both ways.

Unchecked land clearing may have environmental consequences, but there are huge implications if farmers lose their retirement funding and farmers’ children lose their futures while the cost of production climbs beyond affordability for us and those in the competitive export markets we service.

Fine wine preview

I TOOK the opportunity to go to Evans & Tate’s annual general meeting this week, gaining a preview of Franklin Tate’s thoughts on his company and the wine market ahead of his WA Business News breakfast speech on December 4.

One bit of news was E&T’s decision to push resources towards producing an icon Margaret River chardonnay, a standard set by Leeuwin Estate.

I quite liked this concept. Management has chosen a realistic goal and time frame, one that should not break the bank but would have great spin offs for the rest of the brands if achieved.

It’s a lot better than aiming to be the biggest in their market or a number of other targets that have undone management in a lot of companies in the past.

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