The real costs of privatising state assets

Robyn Godbehere writes: Re. “Mayne: Newman must kick assets to reduce Qld’s debt” (yesterday). The Newman LNP is promising huge infrastructure being put in IF it gets re-elected, but how is it going to be paid for?  A 99 year lease will not include the money being paid upfront so that this infrastructure can be put in and jobs created as promised. The only way it can be achieved is to SELL the assets so that the government if re-elected does not have to wait for the money to come in. That means that infrastructure like Townsville’s $150 million towards their new stadium won’t be erected perhaps for 30 or 40 years. Unless of course the Newman LNP intend to borrow the money for this infrastructure and then have Queenslanders pay every minute of every day for the privilege. Which won’t reduce the debt which they harped on so much about, but will increase it — and we won’t know the outcomes of these 99 year leases because we simply will not be here.

Geoffrey Heard writes: Stephen Mayne and Bernard Keane, two highly estimable gentlemen in nearly every respect, share a weakness — they see state debt as some sort of evil that must be dealt with, and their method of dealing with it is the simplistic sale of state assets. In Wednesday’s edition, Mayne was championing the sale of electricity distribution assets in both Queensland and New South Wales as a way of reducing state debt. “Privatisation is traditionally the only policy lever which delivers material debt reduction,” wrote Mayne. The sale in Queensland “should be able to avoid the state’s gross debt ever topping $100 billion”.

But is this really the way to go? A little lower down he points to the failure of this policy — in Kennett’s sell-off of gas and electricity assets in Victoria which reduced state debt from $33 billion to about $10 billion. Fine so far — but he then points out that Victorian debt is now back up to above $30 billion and “there isn’t much left to sell”. And that is the point. You sell off your assets, you sell the family jewels, the silver cutlery, the heirlooms, and finally, the house, and what do you do for an encore?

When Kennett was busy wrecking the Victorian economy by handing over vast income streams to his monied mates and anyone else who had a couple of bucks to spend, Kenneth Davidson was busy pointing out in The Age, with appropriate calculations and evidence, that while some of the debt and been accumulated to pay current expenses — much like a householder’s credit card spending — the vast majority of the debt was money borrowed at excellent rates and invested wisely in infrastructure. This debt was producing a very solid return on investment, day in, day out. It was paying for itself and producing a handsome profit that went into state coffers for the benefit of the citizens of Victoria.

The sale of these assets cut off this income stream for ever; sent a lot of it overseas in fact.There was much talk of competition forcing down prices, blah, blah, blah; but at the end of the day, prices haven’t been forced down by competition, much of the competition has dried up due to takeovers of the smaller players because the reality is that the market is not only too small to support half a dozen competitors, it is — as one of the bigger ones remarked — a natural monopoly. Mayne speaks well of the privatization of Telstra. Suffice to say that Kenneth Davidson pointed out time and again how with the privatization of Telstra, Australia lost the opportunity to become a major player in global telecommunications and Australians were also paying much higher prices for their telecommunications than was justified by what they were getting compared with what happens internationally and what could be projected from Telstra’s position when it was smashed.

Finally, Mayne speaks well of having a bunch of cash in the future fund. What is this? A bunch of cash invested in private corporations around the world to benefit those corporations and their shareholders — mostly elsewhere! How safe is this money? How profitable? Would it not be better if it (along with lots of Australians’ superannuation funds) were invested in government owned and backed infrastructure in Australia, like a National Digital Network (aargh wash your mouth out, Geoffrey) which would not only provide a secure return but would also actually provide them with a higher standard of living?

On how Muslims see the West

James Burke writes: Re. “Eight factors that shape how Muslims see the West” (yesterday). I agree wholeheartedly with most of Scott Burchill’s points. But point 7, where he condemns international intervention against ISIS and argues “there are no military solutions to the many challenges the West faces around the world”, is rubbish. Sure, US-led military action may continue to drive disgruntled losers to embrace anti-Western terrorism. How, though, is anyone to defeat the likes of ISIS and Boko Haram if not through military action? Attempts by Afghan and Pakistani governments to accommodate the Taliban have always backfired and led to more bloodshed.

The neo-Wahhabi blueprint for society — genocide of non-Sunnis, totalitarian control of surviving or forcibly converted Sunnis (with wanton, often random massacres, murders, rapes, floggings and mutilations to enforce orthodoxy), legalised slavery (sexual and otherwise), legalised child rape, etc — is so beyond the norms of contemporary humanity, and so relentless, that no polity threatened by it can defend itself by any means except armed force. US and allied military forces are assisting this fight in Iraq (a country dismembered by the lunatic agenda of the “Vulcans”. America owes these people). Whatever valid criticism may be made of the protagonists’ strategy, tactics and alliances, this is a struggle any decent human must support.

David Edmunds writes: I am sure that Scott Burchill is correct in attributing a contribution to Islamic radicalism to actions by the West. However, this ignores the fact that the Islamic violence we see, overwhelmingly perpetrated by Muslims against other Muslims, largely owes its rationale to the teachings of Muhammad ibn Abd al-Wahhab, who died in 1791, just 15 years after the US gained its independence.

A further strain in militant Islamic teaching comes from Sayyid Qutb, a mad Egyptian muslim ascetic, whose chief objection to the west came during a study trip to the US in the late 1940s, where he formed the view that American women looked too sexy and divorce was too difficult.  He was hung by the Egyptian government in 1966. The homes of these militant and fundamentalist strains of islam is Saudi Arabia and the Gulf states.  They fund and propagate Wahhabism, using the enormous funds paid by the west for their oil.  This funding extends to military adventurism, terrorist action and the dissemination of educational materials.

Surely this is the most important factor that the west could address to limit the spread of this appalling movement.  We need to stop indirectly funding this movement through the purchase of Middle East oil.

On the politics of the Charlie Hebdo killings

Dean Ellis writes: Re. “Rundle: after Hebdo, the world enters political limbo” (yesterday). I love Comrade Rundle. I have said that Rundle and Keane are the reasons I subscribe to Crikey, but I think Guy has got it wrong on the Charlie Hebdo killings. Yes, it’s true that this sort of appalling conduct has been engaged in for time immemorial: The Terror, the Anarchists, the Red Brigade and the disgraceful US drone campaign amongst many examples. But to diminish or write down the Charlie Hebdo deaths as a mere continuation of some form of Western political evolution devalues the human tragedy of what occurred. It is true that after the first death there is no other, but each death is important lest we forget and we ourselves become complicit in the indifference to the value of human life.

Richard Middleton writes: Another excellent article. Thank you for such incisive and well considered writing. Perhaps what unites all the talking heads and the Hebdo-ista is a shared deep and meaningless ignorance of exactly what Islam is all about and what it means to the great majority of Muslims in the world today.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey