NSW Labor will be soon be languishing in Opposition, but that doesn’t mean hardcore lefties won’t be setting the Government’s agenda. The key plank of Barry O’Farrell’s energy policy, announced yesterday at the Liberal’s official campaign launch, was stolen from one of Australia’s most militant trade unions.

As if NSW politics hadn’t been wacky enough under Labor.

Derided for years as risk-averse and ideas-free, it appears NSW’s Premier-to-be was just waiting for the right time to release his inner revolutionary.

Rather than outsource policy development to a business lobbyist or free market think tank, as one might expect, O’Farrell has adopted a proposal of the Electrical Trades Union to reduce the number of state-owned electricity distributors from three to two. The ETU was threatened with expulsion from the ALP last year for opposing privatisation in Queensland and threatening to run independent candidates against Labor.

Writing in the ETU’s journal LiveWire in September last year, the union’s NSW secretary and former state ALP president Bernie Riordan said amalgamating the distributors would save NSW taxpayers $400 million over four years.

Labor is opposed to the proposal, saying it will cost up to 1500 jobs, but the Coalition thinks the ETU was on to a winner and has adopted its recommendation in full. It says the $400 million boost to the budget will be achieved by reducing salary and office costs.

The NSW Business Chamber, for one, isn’t convinced. “That saving seems very large,” Chamber spokesman Paul Ritchie told Crikey. “I can’t see where you would get those savings.”

The big wigs at the ETU, perhaps in a state of shock at seeing the Tories adopt their proposal, remained tight-lipped this morning. Policy officer Paul Lister would only say O’Farrell is “just out to get a headline”: “He has only released 2% of his energy policy.”

Not so, say the Libs. A spokesperson for O’Farrell says no more major energy policies will be announced before the election.

As for his approach to privatisation, O’Farrell had only this to say yesterday: “I’m no ideologue. My preference is for the generators to be commercially run in public ownership.”

The Liberals policy states: “Unlike Labor, who committed to not privatise NSW electricity businesses before the last election and then spent four years selling them, we are prepared to be upfront with the people of NSW about our plans.”

Well, if this is the Liberals’ idea of upfront, I’d hate to see their idea of coy. The Coalition has committed to retaining public ownership of the distribution and transmission businesses — the poles and wires — but other than that everything else remains on the table.

It’s worth remembering not even Morris Iemma planned to sell of the poles and wires in his 2008 privatisation push.

The Coalition has pledged to launch a special commission of inquiry into Labor’s sell-off when it comes to power. O’Farrell’s spokesperson says the party isn’t ruling out reversing Labor’s sale if the inquiry recommends it.

The Greens’ John Kaye says the Coalition’s policy “raises more questions than it answers”. “Holding an inquiry is the policy you have when you don’t have a policy,” he said. “They’re not saying what they are going to do; they are just saying they will hold an inquiry with very broad terms of reference.”

Business groups hope O’Farrell will relaunch the Iemma privatisation model in office. “You have three options on the table,” Ritchie of the Business Chamber said. “Back to public ownership, keep the partial sale locked in, or proceed ala Iemma. Obviously business’s preference is for the Iemma model.”

UPDATE: After Crikey published this piece today, ETU Secretary Bernie Riordan released a statement saying, “It is true that the ETU wrote to the government last year about the amalgamation of the three state owned electricity distributors into two, however the similarities between the ETU’s proposal and the NSW Oppositions proposal stop there.

“It is clear that Barry O’Farrell has selected parts of our proposal however let me get one thing clear, the ETU is opposed to any plan that would result in the loss of frontline jobs and a reduction in network safety and reliability when it comes to members of the public. If Mr O’Farrell is serious about adopting our policy he must come out and support our comprehensive reforms that guarantee frontline jobs, network reliability, community safety and future government ownership of the sector, which must include ruling out the sale, lease or contracting out of any part of the NSW electricity distribution sector.”