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(Cairns... Far North Queensland)


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Selwyn Johnston



One person, with the support of the community, can make a difference





The privatisation of what were previously public assets is a process that has been going on for many years and continues to this day, without the mandate of the people and often in spite of their clearly expressed wishes to the contrary. This is a National disgrace perpetuated with equal gusto by both major political parties. 

We all remember the trail that the process has taken. The Commonwealth Bank, Qantas, Bank of Queensland and the SGIO were some of the first to go probably because these were the most lucrative for the Government and some sort of explanation could be plausibly made.  

Primary producers will also remember that this is about the time when their industry marketing boards were disbanded as a result of the concept of “contestability” and no doubt quite a few of their number will be looking back now and wondering how they let that happen. Or did they have a say at all? 

The process has now shifted from enterprises that were definitely trading concerns to the area of Public Utilities such as water, power, communications, postal services, policing and the like and from this point on the crunch is going to be felt. Perhaps not today, but certainly not too far into the future. It’s not unreasonable at this point to stop and consider just what sort of legacy we are handing to our children and grandchildren; especially considering what was handed to us. 

The rather scary aspect of all this ‘privitisation’ and ‘national competition policy’ and ‘contestability’ is that no one knows whether or not it actually works and from what we have seen of it in operation overseas the indications are that it does not work at all. That is for the people. It is of course a bonanza for big business, the only ones capable of taking over the operations, but for the ‘man in the street’… nothing. 

But the number of academic papers written that start with the presumption that competition policy is the way to go is nothing short of alarming. The papers that contest the theory, and that’s all that it is, a theory, are few and far between. This could be the result of the availability of research funding as much as diversity of opinion but it does little to give the public a balanced view. It is also notable that few of the pro-privatisation papers go beyond an immediate assessment and few if any give an overall comment of the long term social impact. Those papers that question the assumption that there is no other way to go other than privatisation do touch on some seriously relevant instances. 

Perhaps the greatest practical example of privatisation in recent history has been the Californian electricity experience of 2000 and 2001. At that time California was the world’s sixth largest economy and it was bankrupted simply because of the price of privately supplied electricity. It was not only the price but also the reliability of supply. At the end of the day it cost the Californian Government US$40 billion to subsidise the price of electricity for about 18 months and this US$40 billion was a direct transfer of funds from the taxpayer to the electricity industry. And that was only the start of the actual costs.

California and Silicon Valley were the drivers of the technical revolution in communications as well as computing and data processing. In order for those companies to survive they had to install their own electricity systems, as did thousands of other Californians. Some of the more sordid details associated with this “electricity shortage” are likely to come out in the currently running “Enron Trials”, not that it will do the Californians much good at this stage. But it is a salutary example. 

The big problem with the privatisation concept is that it is hard if not impossible to reverse. It goes without saying that if a private electricity company can make money out of either a generating or power distribution business then the Government would also be able to make the same profit. The lack of efficiency attributed to Government agencies and consequently to their public service staff both professional and technical is probably more attributable to cross subsidisation than competence. Then there is the conservative thinking that says a little more power is better than blackouts. 

So once the privatisation change is done we will be hard put to rectify the situation short of revolution. So our politicians of today had better be pretty sure that the concept actually works and is not simply a gratuitous transfer of earning ability from the people to the top end of town. 

Exactly how far does this privatisation process go? Will our Ambulance Service, Fire Service, {our goals are already gone] Local Authority Services and the like be next. Water is the big money spinner but unfortunately it is so far divested and now so centrally controlled that it is as good as gone. 

There will be further changes. As for public radio and television, that is the ABC and SBS well they will be considered "counter productive" and simply wither on the vine, starved of funds and encumbered with partisan management. The method of their demise will be the well-worn track of public broadcasting in America. The Internet as we know it will also go and become every bit as expensive as trunk calls to our e-mails destination. There will simply be no force to stop it. 

Another question we must address is where does this leave our ability to govern ourselves? Our democracy if you like. What are we actually going to be left to vote for? Well it would seem that all we will be voting for is taxes and as the Government will have few functions except for supplying what will amount to mercenary military forces and their own not inconsiderable costs they should not need more than they do now. A great relief you would think. But our taxes will be paid in the form of user pays costs, and if you can’t pay you don’t get the service. Unfortunately the user cost will include a hefty profit margin as a result of a monopoly situation of the service provider. 

But hang on. Isn’t this exactly what the competition policy is all about, stopping monopoly situations? Containing excess profits, gouging and that sort of thing. If we are simply changing from a Government monopoly, in which we all presently have some say to a private monopoly in which we have no say is it a foregone conclusion that we will be better off. Most likely exactly the opposite is the case. 

Maybe we should stop, at least pause, and think about this. Both of the major parties, that is Liberal and Labor parties can’t do enough to push privatisation forward. So there is not a choice with them and we know their policies well. That leaves us with Independent candidates. 

For the sake of your children and grandchildren perhaps you should consider just what options you have, before it is too late.  




Thursday, 16 February 2006


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Written and Authorised by Selwyn Johnston, Cairns FNQ 4870