From John Hewson today:
In policies such as privatisation we have transferred economic power and privilege from the public to some in the private sector, in a quest for greater “economic efficiency”. However, we need to first set the necessary regulations to limit the use of that power. So, in many cases, the result has been exploitation and price gouging – think of electricity and gas, airports, airlines, toll ways and hospitals.
In so many cases, governments effectively issue “social licences” for the development of many important industries, for the delivery of many key services, without adequate regulatory structures to hold those licensees to account.
This week Malcolm Turnbull attempted to make that point to the main players in the gas industry, an industry that cost some $250 billion to develop and exploit one of our major national assets without any commitment to reserving some of that gas for our domestic use.
The result is that the domestic price of gas is now skyrocketing to the point that many households are struggling with the cost, and many significant industries, such as paper, glass, and others are now borderline, with many thousands of jobs at risk.Shouldn’t we have a basic principle in mining that, as these are national resources that can only be mined once, there must be a guaranteed return to our broader society, for the privilege given to just a few to do so?
…Competition policy has clearly failed when we have allowed the concentration of economic power in the provision of so many essential services…
Quite right. A market is not some objective, morally superior entity. It is a social construct that must serve the ends of the society or it loses it’s purpose. Market failure therefore warrants deep government intervention, to repair the market where possible or dissolve where necessary.
