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Now Crikey leans philosophically to the right and therefore generally supports privatisation but even we enjoyed this little number on the Howard sell-off merchants.

“The government believes that the government is not very good at running anything, and it is scandalous that an area so important as the nation’s military operations should still operate as a government monopoly,” a Defence spokesman said.

“Artificially restricting the market for military operations will reduce the Australian Defence Forces’ attractiveness for potential investors and will seriously damage its competitiveness in the global market,” the spokesman said.

The government warning follows the draft report of the current national review of defence, which recommends that the army be corporatised now, with the navy and air force to follow.

The report says the government should aim to float the army on the stock market as early as next July, offering mum-and-dad investors around Australia ‘Real bang for your bucks’.”

A corporatised army, the report says, would result in greater efficiency and reduced costs, greatly easing the strain on the defence budget. Under the proposals, already accepted in principle by the government, the army will lose its current monopoly of government land-based military operations.

These will now be awarded on the basis of competitive tender, with private security firms and overseas forces free to bid for contracts. “If troops from Bangladesh, or Fiji or Indonesia can patrol our northern coastline more cost effectively than Australian soldiers, then it is clearly in taxpayers’ interests that they should be given the opportunity to do so,” the Defence spokesman said.

It is understood the Chinese navy has already expressed interest in bidding for a share of coastal surveillance work, specialising in the detection and detention of illegal immigrants and Japanese fishing boats. “The government will maintain an overview of quality and minimum levels of services, and will appoint a Defence Ombudsman to ensure that ordinary Australians get the forces they deserve,” the Defence spokesman said. The ombudsman would be completely independent of government, with his own short-term contract, three part-time staff and an e-mail address.

The government has promised that half the money raised from the sale of the army would go to a special fund to reduce the excise on petrol.

An army spokesman said a privatisation task force had already been formed and an external operations officer appointed in each battalion to handle overseas tenders. Brand loyalty would be encouraged by a Frequent Fighter scheme. There would be discount rates for anyone hiring more than 1000 soldiers at a time, and special rates for first-time buyers and for operations in mosquito-free zones.

Army communications were being streamlined and transferred to a call centre in Hobart. He said the army was looking forward to fighting for its shareholders, but said it was much too early to speculate on takeover bids by the Americans or possible mergers with New Zealand units.

Infrastructure and government enterprise analyst with Sydney stockbrokers Stagbull and Partners said Army shares would be “better than Telstra”. He said the government should learn from the Telstra embarrassment and sell the whole of the army in one go.

“There is no doubt there will strong demand for these shares from private and institutional investors both here and overseas,” he said. “The fighting between the peace-and-love religions around the world means the peace business is in a strong growth phase.”.

The only negatives were some concerns about staffing levels and a perceived lack of commercial expertise at the top.

“On the other hand, a general in a privatised army would command a salary of at least $1 million a year, and a chief of staff more than $2 million plus perks so there should be no real difficulty in recruiting a suitable chief executive from the US,” he said.

The Drover’s Dog is a weekly satirical column available free via e-mail. Subscription requests to [email protected]

Peter Fray

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