“Paul Keating boasted about selling off the Commonwealth Bank, Qantas, our vaccine manufacturer CSL, he’s proud of having kept wages low while giving the very wealthy and big corporations a tax cut,” Mr Bandt said.
“He still boasts about cutting government spending. I am happy to debate Paul Keating anywhere, any time, about Labor’s record in bringing economic rationalism and next year liberalism to this country.
“Paul Keating has never seen a public asset that he didn’t want to privatise. If it’s not nailed down then sell it off was Paul Keating’s motto.”
“The reason that government spending and government services have been cut in this country, that great public assets like a vaccine manufacturer that would have helped us so well in the time of the pandemic have been sold off to the highest bidder, the reason we have had someone backing the privatisation of our electricity networks and of Telstra, goes right back to the patron saint of privatisation.”
Bandt is not wrong.
The first rule of any privatisation should be that it boosts competition within the relevant market, and at a minimum does not lessen competition.
Unfortunately, many privatisations over recent decades broke this golden rule, instead placing short-term revenue gains above the longer-term interests of users, in turn stifling competition and productivity.
Our politicians pursued this approach because it allowed them to deliver both lower taxes and reduced public debt (in the short-term) simply by transferring the ownership of monopolies from public to private ownership. They also erroneously assumed that we’d achieve more efficient outcomes under private ownership, which has in many cases proven false (e.g. energy market and toll roads).
Instead, the new private owners often used their market power to force-up user costs and boost their profits. We have seen this time and time again with ports, airport parking, toll roads, and utilities (e.g. electricity, water and gas). In many cases, the cost-of-living burden for users is the same as raising their taxes, albeit it in a less transparent manner since monopoly profits are easier to hide from public view.
Australia was not alone in pursuing this neoliberal agenda, and took its lead from the Thatcher and Reagan administrations in the 1980s.
The problem with neoliberalism is that it eventually has nothing left to sell-off, and will eventually leave citizens as nothing more than renters of their own country.
As such, we are now witnessing the growing global disillusionment with free markets.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also Chief Economist and co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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