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THE END POINT OF PRIVATISATION
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.
RETURN TO: PRIVATISATION
Thursday,
16 February 2006
