Jan 14, 2014

To sell or not to sell government assets, that is the question

We crown four experts treasurer for a day, asking them which of the 11 government entities up for privatisation they'd sell. The answer? All or nothing.

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

For Sale

The debate about which government entities should go in the next round of Commonwealth privatisations has raised deep ideological questions on the role of the state.

Prime Minister Tony Abbott wants to sell off public corporations to pay down debt, but we don’t know which ones he has in mind. Yesterday, Crikey compiled a hit list of the bodies that could be sold off. Medibank Private, Australia Post, the ABC and SBS are on there. So is NBN Co, Snowy Hydro and the bodies that manage rail tracks, air traffic control, Defence housing and submarines. And Abbott could sell off HECS debt.

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18 thoughts on “To sell or not to sell government assets, that is the question

  1. michael crook

    The name change will be formalised this year, the “Commonwealth of Australia” will become the “Private wealth of Australia”.

  2. klewso

    [Are they going to pay off the Howard (and Abbott) government’s Coal-ition of the Shilling’s invasion of Iraq? What’s that cost in funds that could have gone to worthier causes……?]
    I reckon the quick-fix short term sugar rush (which any governments are likely to piss up their pet projects wall anyway) gained from the sale of other’s accumulated state assets, strips the cupboard bare and just moves longer term inevitable problems on to later governments and generations to have to face.
    Eventually someone is going to have to bite that higher taxes bullet (the ones Howard and Cosjello used, cutting them to buy votes). We’re reasonably well off now, why can’t we?
    If we all want better services – we should be prepared to pay for them?
    How much better off are we after those tax cuts – paying for education, health, transport etc as individuals, when aggregated taxes (to the cost of a sanga and milk-shake) could have been used to subsidise their funding?

  3. Mark Duffett

    I begin to weary of accusations of ‘lack of independence’ that seem to go only one way. It’s salient that both the academic (i.e. entirely publicly funded) experts are the ones coolest on privatisation. Isn’t there broad self-interest at work here as well? Is anyone truly independent?

    Alternatively, we could try evaluating opinions based on evidence, rather than who is voicing them.

  4. CML

    @ Mark Duffett – I think the ‘evidence’ is already there for all to see. As I pointed out yesterday, the structural deficit in the federal budget is far worse than it was before the government started selling off commonwealth assets. The lack of ongoing profits from said assets will only make things worse if more are sold.
    Coupled with the LNP mania for cutting taxes (Howard), we are in a diabolical situation now. The revenue to fund essential services has to come from somewhere.
    Choose your poison!!

  5. MJPC

    After they sell the silverware and royal doulton, what is left?
    I’m with Prof Mitchell, QANTAS is competing against state owned airlines! And what of the Commonwealth Bank, it was flogged off and maintains its profits as one of the 4 financial oligarchs which, when times were tough (GFC) ran to the Government with the other 3 to obtain guarantee on its loans. Talk about having the cake and eating also.
    I am with Klewso: The proletariat (those that pay tax rather than make every attempt to not) need to ask…do we want the current level of services? If so, we have to pay for them (i.e: tax receipts) and it’s not flogging off everything valuable in public hands to buy it back from private ones who add excess profits. I pay taxes to enjoy the standard of living for all, rich or poor. Cut this ‘give me’ mentality that we pay too much tax, then are slugged by the big end of town in excess fee’s using newly acquired public assets, keep them in public ownership and use the profits responsibly. Tax cuts are a cargo cult mentality.Revolution now!

  6. Malcolm Harrison

    The government does not have any assets. The ‘feds’ as you persist in calling the government in Canberra do not own anything. They are managers of assets owned by the people. In these days, such notions of public ownership may seem quaint and romantic, although in some parts of the world they are still a significant reality.

    While the government can sell these assets if they have the necessary parliamentary support, it is not appropriate for journalists such as yourself to use such misleading language. Unless of course you are blogging, but if that’s the case I think you should declare your own interest.

  7. leon knight

    I’m with MJPC and the professors, you don’t need much evidence or economic nous to figure out that you can’t compensate structural shortfalls in tax income v services expenditure (no matter who caused them)by selling off what is left of your impoverished income earning asset portfolio.
    The Grattan institute and Mr Eslake also will advise that the books should be properly balanced if you ask them the right questions!

  8. CML

    @ Malcolm Harrison – What on earth are you on about?
    This article reports on what four experts, two from the private sector and two from academia have to say about further privitisation of Commonwealth assets.
    Did you even read the article? As far as I can see Cathy Alexander did not express a view at all.
    You are entitled to your view, but please get your facts right before slagging off at the author of this report.

  9. griffin27

    It is all very well to say, “the money could be better spent on new infrastructure.” I do not believe modern Australian governments, at State or Federal level, are capable of building infrastructure.

    The Snowy Mountains scheme was built “on time and on budget” at a cost equivalent to $6b (Wikipedia). This sort of result is inconceivable now, given the lack of talent in both main political parties. And where are the William Hudsons of today? Should one such exist, the queue in front of him or her would be populated by the armies of consultants and all the private consortia that are the fashion nowadays.

    I would prefer to leave the money where it is rather than see it frittered away.

  10. drmick

    OK here are a few issues about your privatisation. Electricity: the last 3 fires that have claimed lives have been caused by electricity poles that have failed or wires that have fallen to the ground.
    The arseholes that own these systems have increased their profit %2000 since privatisation, allegedly to provide a “rolls royce” system and eliminated preventative maintenance to save money. Save money = murder innocents.
    The only rolls royce they have provided is a hearse; they have killed people and destroyed homes in their pathetic effort to turn a profit.
    Pretty sure that rail deaths and road deaths are similarly tied to the cost savings associated with privatisation.
    Shove privatisation.
    Who do you call when you want the police? Do not use ours because you do not pay tax. Your private mob are sure to look after you.
    Who do you call when someone is sick? do not use medicare because you are really clever and avoid paying tax. Do not go to the local hospital because you dont believe in a public health system. Good luck getting your own doctor within 24 hours let alone 24 days.
    Your larvae need educating and you don’t want them to be as ignorant and as narrow minded as you are. Do not use our education system. You are not an Australian. You live in Australia, and you are a parasite, but you are not Australian.

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