.
IS
WATER THE TIP OF THE ICEBERG?
Water is a
hot topic around Australia right now in both the State and Federal spheres
and controversy abounds. In Queensland the State Government has just been
reported as announcing that it will allow ‘private companies’ to sell water
to South East Queensland consumers.
The
Councils will apparently own the pipes, [at this stage] and presumably the
maintenance of them, but private companies will sell the water. A potential
purchaser of the water rights has been reported as saying “You don’t have to
own the pipes to sell the water”. In fact it’s probably better if you
don’t own the pipes, as then you don’t have to maintain them. Normally the
Councils would sell the water albeit at what some would say are, overly inflated
prices.
In fact
the State Governments unilateral move to acquire Local Government assets is
almost certainly connected with this privatisation move. While the Councils may
be allowed to maintain the water distribution at this time you will find that
these assets and maintenance will eventually also be transferred to the private
sector. It is part of a system that could well be described as “incremental
deception” of the electorate that has in recent years become a government art
form.
But it
would appear that there is sufficient margin in the sale of water to allow
another player into the field, which means that the consumer will have three
mouths to feed not just two. Officially, this is all covered using that
well-worn and universally discredited concept that competition between major
vendors will make water cheaper. This has never noticeably happened anywhere in
the world and the longer the concepts runs on any particular commodity, in any
particular place the higher the prices go, competition notwithstanding.
Surely it
would be better, assuming the market could afford another mouth to feed, to
reduce the price of the product to the consumer rather than admit the third
player. But it would appear that this is a far to reasonable an outcome. And
there’s certainly no margin in it for the big players.
Like the energy market, first the retailing of the product is divested, the next move is to divest the production of the product and then of course the whole project is in private hands. But don’t complain about the service to your local Member of Parliament, as s/he will only be able to say that
'... the government has nothing to do with that'.
So what,
you may ask, if it can be sold at a competitive price. Well here’s the catch.
In any contract of sale of water or any other service assets you can be assured
that there will be a clause in the contract that, in effect states that if the
Government does anything to try to control the price of the product to the
consumer then the producer or distributor will be able to claim compensation
from the government if that change in any way shape or form negatively affects
their profits. Let’s face it, would you invest millions of dollars it you
weren’t assured control.
In regard
to water some present potential purchasers of retail rights are named as Origin,
AGL, Telstra and even Foxtel. But international players will ultimately enter
the field, such the internationally well-known companies such as Vivendi, Saur
or ONDEO. It is inevitable that these styles of companies will be attracted to
the market. Anyone in any market knows that the thing that counts most in any
market is “depth” that is having or being able to access finance. Our local
giants simply don’t match genuine multinationals in this department, so it’s
not a matter of if but when.
Which
reminds us that the Federal Government has not been inactive in the water field
either. Right now, but for Victoria’s Premier Steve Bracks, the Commonwealth
would have taken the water rights from the States. Victoria’s holding out on
the Murray Darling Agreement has put the venture in limbo but it has by no means
gone away. Peter Beattie has volunteered to the Commonwealth Queensland’s
constitutional water rights for what concessions we don’t know.
What we do
know is that Federal Governments of every persuasion over the last twenty years
or so have been heavily into the business of centralisation and privatisation
come hell or high water. Maybe there’s a connection, maybe there’s not. But
Traveston Crossing certainly comes to mind.
It is
really quite clear where our politicians are taking us and it is really
something they should be asked to account for. What they are doing is selling
all those public service functions that we and our forefathers have paid for to
international corporations and doing so in a way that means that we will never
again be able to gain control of them.
Public
service functions are things like water, communications, transportation, health,
power, emergency services and the like. When these are gone, to macro private
enterprise the only way the Governments can be funded is through taxation. And
they will not be averse to increasing taxation, or introducing new forms of
taxation. Few of these new taxes, if any, will fall on foreign companies but
local residents are another matter. This is all the more worrying given that our
currencies now have no backing except faith, and there seems to be precious
little of that about, and even less intergenerational responsibility.
There are
[at least] two questions you should ask your local politicians, both State and
Federal.
Firstly,
just what is it that they think they are doing for us? If for a moment they
think that selling our children’s future is acceptable then perhaps, and
before the next election, they should explain to us in detail what they think
the advantages or benefits are.
Secondly,
just what do they think will be the extent of their parliamentary authority and
respect when multinational companies control everything that matters. And
supplementary to this, where do they think this takes or leaves Australia’s
democracy.
Perhaps it’s all to
do with globalisation and that’s what we are going to get whether we want it
or not. How’s that for democracy … Canberra style!
RETURN TO: INDEPENDENT
VIEW
