What do Elon Musk, lower penalty labour rates and power company privatisations have in common? They all offer solutions to significant societal problems that are unfavoured by powerful groups, but all three are solutions that should be persevered with. Let me explain.
Solving SA’s unreliable electrical power supply
Elon Musk has offered a 100 day implemented solution to South Australia’s unreliable power supply. I’m no expert, but if someone with a reliable technology track record (Solar City, Tesla, SpaceX, solar battery storage) offered me a solution to a major problem implemented within 100 days – with the wonderful bonus that, if it ran late, it would be free – I’d definitely pursue it. And now, it seems, other (local) suppliers of renewable energy are saying they can do this too! If SA’s power problem is like Melbourne’s train reliability problem was, I’d fix it…and get re-elected. It’s a no-brainer.
Musk’s tweeted offer has prompted the State government to launch its own plan within the week…but its plan will take years to implement and is founded on new, as yet undiscovered gas supplies. Meanwhile the Australian government argues that the problem is SA’s reliance on renewables, or its distribution system, or its power lines, or the SA government, or anything but supporting a wonderful opportunity for technological innovation (as I recall, this was a Turnbull catchcry when he was elected…).
The solution (or solutions) are available. The problem is real. Solve it. Expertly. Quickly. And get credit for solving it.
Implement lower Sunday penalty labour rates
The Fair Work Commission has just legislated lower penalty rates for Sunday work, arguing that Sunday is no longer so special. The concept of 150% and 200% labour rates for weekend work was developed when Saturdays and Sundays were ‘the weekend’ and very different from the working week.
But the work world is very flexible now. Many people choose to work on weekends. Shopping on the weekend is normal. Many people work flexible hours, including night work, odd hours, weekends only and more. Retailing has gone from a 5½ day week to a 7 day week. Online drives 24/7 activity. Working on Saturdays and Sundays instead of Monday-Friday has much less impact than it did before. Sports are played through the week. Even kid’s events occur through the week and not just on weekends.
So labour rates should really be quite similar for Mon-Fri 9-5 and other hours. (In fact, many people work longer unsocial hours and are paid nothing for the extra hours, let alone being paid penalty rates.) Let’s recognise this and make labour rates more flexible, as the expert Productivity Commission now the Fair Work Commission have recommended. Bargain for higher overall rates, or bonus-sharing, but the rationale for high penalty rates doesn’t exist now. Let’s change it and move on.
Power company privatisation improves efficiency
One argument given for why the WA government lost the election last weekend was that it proposed to privatise Western Power, to reduce its debt. This argument was also cited when the Nationals lost power in Queensland last year. But both governments were actually crushed, not just beaten. There were a whole host of reasons, mainly focussed on incompetent governments that didn’t listen to their people on a whole host of issues, or explain these issues properly to them.
Power company privatisation is a big issue. But the reliability record of privatised power companies is higher than the government-owned organisations they replaced. Their efficiency is greater. They use a lot less people. And they make higher profits!! (But prices are regulated, so profitability is effectively controlled by government regulatory competency…)
The real power supply issue now is hardly discussed! It is that gas is now being mostly sold to overseas buyers at higher prices than we want to pay in Australia…so we have a looming gas shortage…which is driving up prices (it’s a lot more complicated, but it has nothing to do with government ownership of power stations).
A ‘good’ government would discuss this problem (a market-based problem) and the range of solutions (nationalisation, law amendments, renewables, behavioural change and more) and form a rational view of how to solve this complex, but very soluble problem. But no! Failures of governments to honestly explain that power company privatisation would lead to more efficient power supply while making separate changes to rules and motivations would change power demand and keep prices under control means that voters are confused, and the short-term oriented media doesn’t help.
What should be done?
These are all important issues for our society. They need good solutions, not self-interested political arse-protecting.
First, governments should talk to Musk and other objective experts about getting the quick fix (battery storage, encourage renewables) that is available to get long term power supply reliability. Second, governments and oppositions should explain why high penalty labour rates are no longer as appropriate as they once were (though 175% instead of 200% is hardly any change at all!!). Third, governments should privatise their power companies to get more efficient power generation. Fourth, rules for how the electricity supply market operates should be brought into the 21st century. Fifth, governments should be open, honest and clear about explaining big issues to their people. Otherwise, electoral wipeouts as experienced by the Queensland Nationals and WA Liberals will occur in other states, as voters are increasingly disenchanted with political rubbishspeak, whatever party or parties hold government.