Privatisation - Asset Stripping by Stealth
To begin with I will look briefly at how economic rationalism and privatisation are being presented in the general political arena.
Privatisation and many other aspects of economic rationalism are being presented to us as unquestionable facts. What is not said is that economic rationalism is an economic theory, not a proven fact. It is driven by the primary assumption that the search for profit and market forces are the most effective means by which to organise economic activity and life in general. These are allied to other assumptions such as the inevitability and positive value of globalisation and the corporatisation of society. Economic activity is seen as the central focus of society, with even democracy itself purported to arise from economic forces.
In this way other values such as democracy itself, social cohesion, ethical considerations, environmental impact, spiritual values and many others are relegated to side issues which must be secondary to the `main game' of profit making and market forces.
Economic rationalism is not a fact, however, but a set of assumptions raised to the position of a dogma. It is an ideology and privatisation is a key plank in this ideological platform. The essentially ideologically driven `reforms' which make up the privatisation agenda do not consider the broader interests of the community which must be paramount in a compassionate and sustainable society.
One of the oft used arguments in suggesting that privatisation will be better for the public is that we, as customers of public utilities, deserve better service than we are getting. There are two matters, at least, to be looked at here.
Are we simply customers? No! We are in fact the owners (taxpayer/ shareholders), of public utilities and infrastructure. True, we are also users of the services or facilities, but we are not simply paying customers. In fact, as owners, maybe we should not have to pay for services we pay for through our taxes. This is an interesting, and complex, situation in which people have been talked into the belief that they ought to pay for what they already, at least in part, pay for.
Those who combine user pays and privatisation approaches tell us that user pays means less tax. Thus we are talked into paying private companies for services, provided through infrastructure that was sold to them at bargain prices, rather than the money being re-invested in publicly owned infrastructure. The buy off is a lowering of tax rates which also adds to the lost revenue to the public purse due to the sale of a revenue producing asset. To offset this loss other services are reduced. This is a self perpetuating approach which suits large multinational companies which are the only buyer with enough capital to buy publicly owned infrastructure.
The notion of user pays is part of the `privatisation by stealth' agenda which, along with reducing taxation, is used to convince us of the dubious benefits of privatisation. We have a choice in this matter, however, pay less tax and pay as we use for our services and infrastructure, or, pay a bit more tax and demand more accountability and control over our assets.
As owners of public utilities and infrastructure we should demand greater control of our assets, not let them be sold off by our managers - the politicians - to private companies in which most of us have no say as to policy directions or service delivery.
The real issue here is a management issue and should be seen as such rather than that being obscured by the ideologically driven theories of economic rationalists which serve a hidden agenda.
So, what is the hidden agenda of privatisation? Is it really to provide more efficient, effective and cheaper services? What else could it be?
In the past 70 years or so huge amounts of capital, in the form of taxes paid by ordinary citizens, has been invested in public utilities and infrastructure. The quality of management of these resources is an issue which must be addressed but privatisation is not necessarily the best approach. Is selling off public assets for the short term benefit of unsustainable budget surpluses and promises of better management really an action in the best interests of ordinary people? Who really gains from privatisation and in whose interests will privatised utilities be managed?
Privatisation really amounts to asset stripping by stealth. The push for privatisation has come from the corporate sector, not from the public. Maybe its more about the corporate sector finding a way to get its hands on these accumulated assets based on huge investments of public money. Furthermore, whilst public infrastructure and utilities remain in government hands they are always able to provide a counter weight to corporate policy directions. This limits the corporate sector's ability to manipulate social and political outcomes for its own benefit. So, apart from the economic benefit of gaining access to all our invested capital, the corporate sector also stands to increase its political power through privatisation.
Below are comments on some Australian Democrats policies quoted from `Public Sector, Privatisation and Competition Policy' Issue Sheet (1996). I consider the Australian Demcrats to have by far the best policies on these issues of any of the Australian political parties.
The question which must be asked here is who is to be represented on such an enquiry panel. Enquiries conducted by so called experts most often support the corporate sector's push for economic `reforms' and ignore real public interest and concerns. Maybe this needs to take the form of a senate investigation?
This is an important statement which must be supported by a commitment to values such as community need and environmental sustainability as alternatives to competition and other corporatist `reforms'.
In the four years to 1996 over 150,000 public sector jobs disappeared as funding for many core services have dried up. Instead of slowing, the winding back of the public sector looks set to accelerate as competition policy, "contracting out" and privatisation move into top gear.
This is one of the `ideologically driven reforms' which on closer examination are based on assumptions of the inherent badness of public enterprise which are unproven theories, not facts. A close examination of large corporate organisations shows them to be as prone to bureaucratic inefficiency and lack of competition as any public enterprise. Consider the recent frenzy of `downsizing' along with the apparent collusion fo the major banks in setting of interest rates and fee structures! Why does so much downsizing, which supposedly makes banks more efficient lead to higher fees and restricted access to services?
This is an essential piece of policy which must be adhered to vigorously. Competition policy takes no account of human or environmental values and focuses exclusively on ideological commitments to economic theories, not the needs for social cohesion and environmental sustainability. Competition policy, along with `contracting out' (which Democrat's policy also opposes), destroys the cohesion and viability of regional economies in the interests of economies of scale by shifting employment and resources to larger centres.
This is an essential commitment to public enterprise but would require vigorous work to educate the public about the viability of public enterprise and the need to maintain, not reduce, taxation revenue. Much effort has been made by the proponents of privatisation to destroy confidence in public enterprise and to buy us off with promises of tax cuts.
To deal with the feeding frenzy attitude of ideological privatisation needs clear policy directions and a desire for open public debate, both of which are lacking from the major parties. Both of these need vigorous and clear public delivery and re-iteration at every opportunity.