Has privatisation passed its use-by date?
On Q&A last Monday, RBA board member Heather Ridout expressed her disappointment at the decision by the voters of Queensland to reject the Newman government’s privatisation plans.
Whether it has been noticed or not, that election result coupled with
the recent elections in Victoria and Greece share a common denominator
that may have far reaching ramifications for future governments all over
the OECD world.
The Victorian and Queensland elections were fought primarily on the
issues of infrastructure and privatisation. There were other issues in
the background but these two took centre stage for most of their
respective campaigns.
If you were to combine these two issues and express them as one
broader concern for voters, it is likely that concern would be
identified as sentiment; a feeling that selling off assets and allowing
private companies to buy public utilities that result in costing users
more, wasn’t right.
Austerity has been the catch cry in recent times with governments
telling us that our present lifestyle is no longer sustainable. They
then encourage the privatisation of public assets as if this somehow
benefits us.
Whenpoliticians look at publicly owned assets, all they see is a pile of
money sitting there waiting to be collected. They think if that pile of
money can be realised without effecting the service it performs, then
why not sell it and spend the money on something that will make them
look good.
They then try to sell the idea to the public who are led to believe
that this will improve their lives and those of future generations.
But it never seems to work out this way. We have seen public assets pass
from our hands into the hands of the already wealthy time and time
again, without ever seeing any tangible reward.
Has the sale of Telstra, the Commonwealth Bank and the State
Electricity Commission of Victoria, just to name a few improved our
quality of life?
Looking at the result of these three elections it is worthwhile
asking: Are we seeing a wiser electorate waking up to the hypocrisy
peddled about privatisation?
In Greece, a country that has been cheated, lied to and then forced
to pay the price of neo-liberal excesses by both their own government
and the EU Parliament, the people decided enough was enough.
Again, it was sentiment, a feeling they had been punished enough, if
indeed, they should have been punished at all. In all three locations
the people judged privatisation, austerity and structural reform to be a
smoke screen hiding the real agenda behind these moves.
That is not to say the people’s understanding of the real agenda is
crystal clear either. But they do understand that the flow of wealth to
the top end of town, at their expense, is real. Public assets are
generally always undervalued.
Theycould clearly see that their living standards were in decline while
politicians, developers and corporate giants effused a smug arrogance
reminiscent of the Frank Underwood character in “House of Cards”.
They decided in all three cases they weren’t going to take it
anymore. It begs the question therefore: Is the public perception of
neo-liberal philosophy now clearer and are the people finally beginning
to reject it?
Unregulated capitalism has always been at odds with those basic human
values that we hold in common; fairness, honesty, sympathy, charity,
empathy. The notion that people come before profit, was somehow cast
aside when the money train left the station and big capital promised big
rewards for all; rewards they never intended to share.
If we can take a lesson from Victoria, Greece and Queensland, it is
that big capital will have to re-assess the way it treats its most
valuable resource: the people who make it work for them.
The challenge for the new governments in Australia now, is to explain this to big capital.But if our local business writers continue to suggest as Adele Ferguson of The Age does that, “With
an infrastructure backlog and big budget deficits, we can build the
infrastructure we need only by selling assets and attracting private
capital”, then there is still a long way to go.
Meanwhile, more governments will fall unexpectedly because they ignored public sentiment in favour of private gain.
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