Jan 13, 2014

For sale? Tony Abbott’s potential privatisation hit list

The Abbott government wants to sell off government corporations. Here's a list of 11 targets that might be ripe for privatisation. Will it be Australia Post, the ABC, the railways -- or none of the above?

Cathy Alexander — Freelance journalist and PhD candidate in politics at the University of Melbourne

Cathy Alexander

Freelance journalist and PhD candidate in politics at the University of Melbourne

There’s sometimes a very good case for corporations to be in government hands. But does Treasurer Joe Hockey really need to offer pet insurance?


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30 thoughts on “For sale? Tony Abbott’s potential privatisation hit list

  1. Philip Bond

    I agree with most, (not the ABC/SBS) the NBN was always going to be privatised and as Kerry Packer had his Alan Bond, Telstra will have their NBN. The remainder can and will be sold.

  2. David Hand

    Australia Post should be sold as soon as possible, as an entire business to protect the taxpayer from the collapse of latters revenue.

    I realise those in the bush will complain that they might have to pay to get their bank statements delivered but they might also want to find out a bit more about that interwebby thingy that is perfectly capable, even at pre-NBN speeds of delivering such a service.

    After all, the internet is the main reason why letters are in long term decline and parcels are in long term growth.

    Privatising the NBN will be smart as well. It will finally stop roll outs in obscure uneconomic towns with 7 subscribers that happen to be in marginal electorates.

  3. Jimmyhaz

    The government exists to increase the quality of life for all member of its electorate, not just those who can afford it. The private sector is something the government allows to exist for this end, and if it cannot provide essential services at an affordable price for everyone, or provide these services to everyone at an equal price, then the government must step in.

    Privatisation of the NBN and AP is fundamentally wrong, this would see the lions share of funding and infrastructure go to those areas that will turn the greatest profit, while those areas that would never turn a profit (such as everywhere outside major cities) would never see anything. Internet and mail are essential services, and the government must provide them to everywhere, regardless of how much meaningless debt this would rack up.

    Even though this government believes in bunk economics, I don’t understand how privatising HECS will reduce debt at all, does it not count as an asset on the budget sheet every year? The only benefit I can see coming from privatisation of HECS is to the lucky few ultra-wealthy that purchase the lion’s share of it.

    Medibank private is something that should stay within the public hands as well, as it is the only thing currently providing downward pressure upon the prices within the health insurance market. We have a perfect case study of an essential market in which there is no downward forces acting upon prices in our nation’s electrical grids, and taking this into account, I would argue that there is significant public interest in keeping this publicly owned.

    Also, don’t privatise the ABC or the SBS, if only to annoy Rupert.

  4. MJPC

    I just cannot understand the voodoo economics of the taxpayer funding the creation of an public infrastructure (such as AP) which turns a profit in the parcels area (and in turn subsidises the LCOA- letters delivery)then it is good economics to flog it off (and it will only be the parcels area, leaving rhe Govt with the libility for losses in the LCOA side) so the Govt ends up with a loss making enterprise and a relatively small amount which, it is the Libs, will be blown on payments to the big end of town for having time off to have babies (or, in the case of the Howard Govt-the baby bonus).
    If an entity if making a profit, don’t sell it-look to the long term viability/ profits not short term, momentary gain; revolution now!

  5. David Hand

    The main reason why it’s good to sell these assets is that the bottomless pocket of the taxpayer enables weak managers to make poor commercial decisions with no negative consequences. It is most likely that taxpayers will get more out of a privatised Australia Post in tax on profits than they would ever get as dividends from a bunch of public sector managers.

    The possibility of going out of business focuses the mind and drives much better decisions for the enterprise and its customers.

    It also protects an organisation like the NBN being forced by Senator Conroy to roll out fibre in Armidale as a bribe in exchange for Tony Windsor’s vote in the hung parliament.

    The main objection to privatisation that has merit is the natural monopolies that many government trading entities are. The absence of a market and genuine competition would require a heavy regulatory regime that would make innovation and flexibility hard. The NBN falls into this category, though notions of fairness to the bush simply expose the whole Conroy fiasco as the socialist experiment most of us believed it to be.

    If the NBN is the vital enabling infrastructure that will drive Australia’s economy in the future it is brain-dead to start in Armidale, Kiama and a few villages in rural Tasmania. Adam Bandt’s electorate in Melbourne makes more economic sense though we all know why he got it first.

    The first railways were built by private enterprise between Liverpool and Manchester and New York and Baltimore. They were not built between Alice Springs and Adelaide because politicians at the time though it fair that Alice residents should have better access to the beach.

  6. drmick

    If the sale of Telstra is any example, these idiot hypocrites should get out of the game immediately. Gee they did well selling off the Commonwealth Bank didnt they? Selling the farm to pay what? Their friends? Sold to businesses and companies that don’t even pay tax because they have moved the company off shore to avoid having to contribute, then complain about the high wages and the “competition destroying work practices” ruining the country and stifling investment. They need a bit of trickle down economics themselves, and the trickle wont be jobs or wealth.

  7. Jimmyhaz


    There is no evidence to suggest that the government is strangling free enterprise and creativity. I would actually argue the opposite, shareholders are far more informed than taxpayers, and given the nature of the stock market, long-term propositions are basically out of the question.

    Also, the purpose of the government is not to make a profit, the decisions of government-owned enterprises have to take the interests of the constituents over making money, something that private interests never do. This is the real argument against privatisation.

  8. Roger Clifton

    Come on Auntie! If you are in need of some extra friends now, it might be time to ditch those dreadful British regional accents. Are you Australia’s national broadcaster, or an enclave of expatriates pushing British values at our expense?

    That would be a relief to those of us who are trying to teach our children that there is only one true(*) accent for the spoken language in Australia. It will also allow New Australians of non-British background to understand the mangled narrations in the ABC News. They don’t need that insult – after all, many of these people have strived to escape the parochial traditions of Europe.

    (*) Or get your ears boxed.

  9. CML

    I don’t suppose “About 50 Commonwealth assets have been sold since 1987…” has anything to do with the structural deficit in the current federal budget, does it??? It is all very well getting a sugar hit to the government finances when these things are sold, but then there is no further income. If you think the ‘carbon tax’ raised the price of electricity to the average punter, you ain’t seen nothing yet!
    In order to maintain essential services, the government will have to raise taxes at the same time that prices for EVERYTHING from private health insurance to postage will rise. Why? Because once something is privatised, the company that bought it has to make more profit to satisfy the never ending greed of its shareholders. Where does that profit come from? The consumer/customer, of course.
    Yes, David Hand, for people like you and your mates, who appear to have an unlimited money supply, all this is good news. For the vast majority of us who will have to pay more to fill your pockets, it is definitely not on!!

  10. Cathy Alexander

    Very good point CML. Quite a lot of those 50 assets were not huge, but some were – CBA, Qantas, Telstra, and some of the airports earned pretty big money (Sydney, Brisbane, Melbourne). Now the government does not earn a dividend from these assets – and finds itself in a debt hole (or that’s the message from the current government, anyway).

    Then of course there’s the hefty privatisations by state governments, which are not covered in this story. Power stations, banks, electricity retailers, pipelines, QR National – plenty of these were $5 billion or more, and that’s in the old money (ie not in today’s dollars). The question is did state governments use this money to secure some kind of long-running public benefit? Or did they spend it on recurrent expenditure and pork barrelling?

    If you’ve travelled on Melbourne’s train network, you’ll know the privatisation of power stations and electricity companies wasn’t used to improve access to trains.

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