Privatised Assets a Public Concern

By Dr Marjorie O'Neill on September 29, 2018 in News

Growing numbers of Australians are seriously concerned and even fiercely opposed to the continuing sale of government assets and the privatisation of so many services once provided by government. With the mass sell-offs of the family furniture across the board at all levels of government, many of us now hold serious concerns about losses of important government income streams, and likewise, many of us know of a friend or relative who lost their jobs as privatised entities immediately started the mass layoffs of staff.

Yet only 25 years ago, when large-scale privatisation commenced in earnest, many people were fully supportive of at least some levels of privatisation. After all, surely it would be better to have the private sector wave its magic efficiency wand over the so- called ‘lazy’ public sector workers, often imagined to be standing with cigarette in hand in the courtyards of city office blocks, or staring at holes in the ground. Shouldn’t government be focussed on basic governing while the private sector provides goods and services?

Many informed people agree that the merits and demerits of privatisation need to be assessed on a case-by-case basis but, on balance, the tide of public opinion has turned against both the sale of government assets and the privatisation of government services. After all, the fire sales of the Commonwealth Bank, Telstra, Qantas and Medibank do not appear to have resulted in great gains for the average Australian. Nor have the privatisation of our electricity, roads or buses seen benefits flowing to the community. Sadly, we’ve seen quite the opposite – higher medical insurance fees, banks behaving badly, staff cuts and poor services all round.

Many older Australians had a strong loyalty to what they saw as Australian icons. Many Aussies still do have some loyalty to these institutions and they feel aggrieved when they learn that this loyalty is viewed as a ‘stickiness’ to brand, to use the latest managerial jargon. These days such loyalty is ‘rewarded’ with higher fees and reduced competition. It is shocking and hurtful to learn that a loyalty to Australian enterprise, so closely interwoven with the love of our country and our heritage, can be turned upon us.

Privatisation, of course, can mean different things, ranging from the complete sale of an asset to the use of private sector contractors to perform certain functions. While the use of private specialists to perform certain functions in government departments and agencies sometimes makes economic sense, the widespread use of contractors has also contributed to the huge growth in the peripheral and insecure workforce.

When Aussies imagined back in the 1990s that privatisation would result in a smaller public sector, less taxes and fewer sightings of ‘smoko’ out on the streets, it seems that little concern was directed to the implications of privatisation for those on the periphery of so- ciety, including not only the poor but also those in rural and isolated areas. Put simply, government ownership enabled cross-subsidisation and allowed Australians in small towns, in remote areas and those in financial need to receive services at a subsidised rate. The sale of the Commonwealth Bank and the closure and sale of post offices alone led to unimagined consequences and losses.

Cross subsidisation works by providing services and products that make money and using the ‘profits’ to subsidise the cost to those who need it. For example, the Eastern Suburbs bus and rail services are some of the most profitable in NSW and by providing these services the state is able to provide public transport to less populated areas at a loss, so that everyone can access public transport. Makes sense, doesn’t it? So what happens when the most profitable bus service is sold off
or the railway line is privatised as some suspect is planned in NSW?

Unfortunately, time and time again what we see is that profit comes before people, resulting in a more expensive product or service generally delivered at a poorer rate. The most evident example for all of us is the ever-increasing electricity prices for families and small businesses, with wholesale prices increasing by 20 per cent in 2017 alone. And the revenue streams of sold off electricity companies now flow into overseas shareholder coffers rather than funding our schools and hospitals. Power prices are now so high, most nights of the week you can find a bunch of older locals hanging out in one of our many clubs, as it’s cheaper to have two beers with your mates than it is to be at home with the heater on.

Not so long ago governments at least purported to be selling off government assets and privatising government owned businesses in order to achieve efficiencies. Now, such pretense has been abandoned.

One classic and tragic case of privatised NSW is the Powerhouse Museum. The Powerhouse, opened on March 10, 1988, is on the site of the old Ultimo Power Station, one of Sydney’s original powerhouses. Housed on public land and purpose built, this site is earmarked as yet another government asset to be sold, adding to the $50 billion of publicly-owned assets that have already been sold off in NSW since 2011.

With many people now extremely concerned at this plundering of public assets, it’s time to take a stand against further asset sales. Not long ago the Bondi Pavilion was seriously threatened with privatisation and loss of community space. We stood up against that at a local level. Will we stand by and do nothing when parts of our beaches and parks are privatised or our precious water supplies are on the chopping block? It is time to say enough is enough.

Dr Marjorie O’Neill is a Waverley Councillor. The views expressed here are her own, although we generally agree with them.