Fire Sale of the People's Assets Continues

by Paul Gould

The Queensland Government is laying the groundwork for the possible sell-off of Queensland Rail and the deregulation of our Water resources. This should send alarms bells to the working families of this state. The sell-offs are being orchestrated by a State Labour government, although this should be no surprise as the Australian Labour Party have been the prime architects of privatisation in this country.

The arguments for privatisation have always been based on a false economy and the primary motivation is greed and short sightedness by incumbent governments.

The Queensland Premier, Anna Bligh has shown her true colours with the sale of public assets when she told state parliament that by the end of the year the Government would sell the Cairns and Mackay airports, along with the Port of Brisbane Corporation's shareholding in the Brisbane Airport Corporation.[2]

"With the funds of this major sale, we will expand and redevelop the Cairns Base Hospital, buy a site for a future Cairns hospital, build a new Mackay Base Hospital on its current site and redevelop Mount Isa Hospital," [2]

One has to ask, why does the Government need to sell assets in order to fund essential projects? Surely there would be other ways to fund such essential services as hospitals? If there is no other way to fund essential infrastructure development, what will the future hold for generations when there are no more public assets left to fund these services?

We are often told that the sale of public assets leads to better management due to competitiveness. However, electricity retailer, Origin, in April apologised for incorrectly charging 899 of its customers the state government's ambulance levy and not applying the seniors' rebate to their bills, leaving pensioners from $50 to $80 out of pocket [4]. In today’s economic climate, with rising living costs, this is a significant expense for most people, let alone pensioners. No wonder people are cynical about politicians when told that private and corporate concerns can manage public utilities better than Government and then we hear of such mismanagement.

The close association of business and government has meant that, in reality, the elected government of the people is really in the pocket of big business. Governments seek advice on deregulation and privatisation through the ranks of individuals within the financial services industry. These are merchant bankers, lawyers, accountants, stockbrokers and a collection of ‘consultants’ and lobbyists – all of who might expect to benefit from advisory work, in ‘preparing’ agencies for Corporate change and in drafting plans for privatisation. [1, p3]

The argument for privatisation is that it can repair government finances based on the alleged need to reduce government debt or the money gained can be spent on infrastructure or other services.  This argument ignores the fact that selling government businesses in order to pay off debt may actually lead to deterioration in the financial circumstances of the government. Selling a public utility signifies the loss of dividend revenue from a government business and this loss may exceed the profits and savings from reduced costs made by selling the entity. [1, p48]

Also alarming is the take over of water resources by the state government from the local councils. The Queensland Commission of Audit, a body set up by the Borbidge Government in 1997, had recommended an end to public ownership of water assets, and the government appointed Deutsche Morgan Grenfell to advise it on the sale of this infrastructure.[1, p29].

If privatisation is not stopped and reversed, then the future will not be bright for the coming generations. This will mean that delivering of essential services, such as water and rail services, will no longer be accountable to the people but to a few select shareholders and greedy company directors. The trade unions, community groups and other progressive organizations need to express their public disapproval, so that the economic rationalist policies exhibited by both State and Federal Governments can be reversed.

1. Privatisation Sell off or Sell out? The Australian Experience, Author: Bob Walker & Betty Con Walker, publisher ABC Books year 2000