New South Wales Coalition may be investigated by Labor and minor parties in the upper house over alleged attempt to amend electricity privatisation report

The New South Wales premier, Mike Baird, will face an upper house inquiry into allegations his government attempted to revise a UBS report which concluded that his plan to lease electricity infrastructure would be detrimental to the state budget in the longer term.



Labor, the Shooters and Fishers and the Greens will reportedly combine to force an upper house inquiry into the matter as soon a parliament resumes after the election.

Baird admits bank contacted before it backtracked on privatisation report Read more

All three parties are campaigning against the Coalition’s plan to privatise the electricity network poles and wires, which the government says will raise $20bn to spend on public infrastructure, including public transport and roads.

If Baird wins the election and the inquiry succeeds on numbers, the premier – elected for the first time in his own right – would join senior UBS bank analysts to give evidence.

Based on current polling, Baird’s Coalition government is expected to win the 28 March election with a reduced majority.

The Coalition does not control the upper house and has relied on the support of the Fred Nile’s Christian Democrats and the Shooters and Fishers to pass legislation. Depending on the election outcome, the upper house could be even more unstable for the Liberal party than it is currently.

The controversy began when the government’s advisor on the privatisation, UBS, released a report titled “Bad for the budget, good for the state” that concluded privatising some of the state’s assets could be detrimental to the budget’s bottom line in the long run.

The report, written by David Leitch and Andrew Lilley, was recalled and rereleased on Tuesday afternoon with the title “Good for the state”. It contained added information which listed benefits to the state of privatisation such as productivity benefits from increased government spending.

Baird admitted on Wednesday that his office had contacted UBS after the original report was released to point out the analysis may have not taken in some of the broader “economic benefits” to NSW.

“The report has come in, obviously we’ve seen it, we’ve touched base, and they were aware the modelling did not take into account the broad economic benefit that comes in over the next 20 years,” Baird said.

When the story first broke, Leitch said he supported the privatisation plan but he may have been “naive” in writing the original report.

“I shot myself in the knee,” he told the Australian Financial Review. “I genuinely believe in this asset recycling plan. I was naive. Having studied it for so long, I guess that I can see this analytical point that no one else was seeing about the debt. I thought if I wrote all that down on a piece of paper everyone would think that was terrific. That’s what I’ve learnt, not everyone thinks the same way I think.”

When the reports emerged, Baird was campaigning in marginal seats this week, particularly those electorates around Newcastle and the central coast where Liberal MPs stood aside or resigned as a result of revelations in the Independent Commission Against Corruption (Icac) on banned political donations. Ten Liberal MPs have now stood aside or resigned as a result of Icac inquiries.

Labor’s Michael Daley referred the matter to the Australian Securities and Investments Commission (Asic) to investigate who in the government or on the premier’s staff called the bank and whether pressure was brought to bear.

“Research analysts from banks must be left alone to issue their reports without pressure from clients and without pressure from government, that is the law,” Daley said. “I believe either Mike Baird or one of his staff breached that principle.”

Late on Friday, Daley and Shooters and Fishers MP Robert Borsak issued a statement to Fairfax that an inquiry was necessary because the premier and his treasurer, Andrew Constance, had repeatedly refused to answer questions on how the report was revised.

“Both Labor and the Shooters and Fishers Party are concerned by the fact that Mike Baird and Andrew Constance have refused to answer questions on this matter over the past three days,” it says.

“There is a multiplicity of unanswered questions and it now seems the only way to get the truth from the premier and the treasurer is through an inquiry led by the upper house.”