Queensland will effectively have a private electricity network if the Liberal National Party wins next year's election.
In a massive turnaround from the message of the past two years – that the government would never cede control of the poles and wires section of the state's network - Treasurer Tim Nicholls announced on Wednesday the government was now considering offering a long term lease to the private market instead.
If that option moves forward, the state would hand over its control of the poles and wires for the term of the lease, which Mr Nicholls anticipated would be either 50 or 99 years.
Last week, the government passed legislation that deregulated electricity prices for south-east Queensland, allowing the market to set the price.
The Beattie government privatised the retail arm of the network in 2006.
When considering its own privatisation program, the LNP government was split over what to do with the poles and wires end of the network.
Mr Nicholls lost a party room battle with Premier Campbell Newman over the issue.
When defending the asset sales program, Mr Newman and government MPs would invariably mention that Ergon, Energex and Powerlink were not for sale.
Instead the government offered a hybrid-investment option to the market. It was expecting to raise about $28 billion through the private investment model – the bulk of the $33.6 billion it announced it was expecting to make from the sales – in exchange for a portion of the government-owned corporation profits.
The government expects to get about the same amount of equity from its new proposal.
"We are not selling Ergon or Energex or Powerlink," Mr Newman said in October last year.
"We are not privatising them. But what we did say is that we would look at ways to get private sector capital in them."
Despite reports that the market was not interested in the proposition because it would not give them control, Mr Nicholls, who announced the shift in policy while Mr Newman was in Noosa at a tourism event, said it was not the market that prompted the change.
He said it was feedback from voters.
"The advice that we have from our investment advisors is that people did understand the detail around the hybrid instrument," Mr Nicholls said.
"They had seen it before. It was not been something which has necessarily been done at a government level before, but it is certainly a common type instrument in the commercial world.
"So there was no real issue around that. The issue has predominantly been around that we do listen to what Queenslanders have said.
"We are dealing with not only the current concern about dealing with the debt, but also the on-going ownership concern and that is what a leasing proposal will deal with.
"That was certainly the feedback we received as part of the consultation when I released the draft plan."
Asset sales remained a key voter grievance in opinion polls.
Mr Nicholls himself referred to a long-term lease "as good as giving away the farm" while arguing against the previous government's privatisation program in 2010.
On Wednesday, he said this proposal was different.
"We had dealt with then a situation with a government that had come to power saying they wouldn't sell assets and then they did sell assets," Mr Nicholls said.
"They had not taken the people of Queensland into their confidence.
"In terms of the process, I believe it was flawed and the proper price wasn't received.
"...In the context of that particular transaction I think my point was the Labor Party had completely mismanaged the process."
Peter Simpson of the Electrical Trades Union, which has fought an on-going battle with the government over its asset sales agenda, said he was "not surprised" by the change.
"South Australia has just done a 99-year lease with their electricity assets and the wording in their contracts says the new owner, if they do any maintenance work or build any new power lines, that becomes their property," he said.
"And in 99 years, you'll expect a lot of work will need to be done, so it's privatisation by stealth. That is what is happening here.
"They're giving a government owned monopoly which should be there to serve the people, to a private entity.
"A lease is a sale. We had the same problem with the Bligh government when they were trying to say it was different. It's not. A lease is a sale."
Any plans would still not move ahead until after the next election.
