The NSW government has given indications that it may be open to privatising more public assets in order to finance the state’s pipeline of infrastructure projects.
Premier Dominic Perrottet has stated that ‘asset recycling’ is part of his government’s ‘balanced’ approach to financial management. He added that the government will use a ‘combination’ of methods to finance transport projects in the future.
From The SMH:
“What we have is a long-term economic strategy to keep NSW moving forward that has been our approach, it’s a balanced approach to financial management in our state, a combination of affordable and sustainable debt position, asset recycling, lower taxes,” Perrottet said…
“There has been asset recycling that we’ve undertaken that’s enabled us to continue to build that infrastructure over our time in government,” he said. “We make those decisions at the point in time where those investment points arise.”
Maybe Ponzi Perrottet should have a chat to former ACCC Rod Sims, who called for a moratorium on future privatisations because of the damage caused to consumers and the economy:
“I’ve been a very strong advocate of privatisation for probably 30 years. I believe it enhances economic efficiency [but] I’m now almost at the point of opposing privatisation because it’s been done to boost proceeds, it’s been done to boost asset sales, and I think it’s severely damaging our economy…
“It is increasing prices – let’s call it out… I want them to stop and think about the fact that when they’re privatising these things without effective regulation you are going to have increases in prices, and just think about the effects of that on the economy.
Stop and think. And don’t be surprised that your electorates think that privatisations increase prices. Of course they shouldn’t [increase prices] but the history tells you differently”.
Most of Australia’s past privatisations have been anti-competitive and created private monopolies, resulting in worse outcomes for consumers and taxpayers.
Our politicians pursued this agenda 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.
Instead, the new private owners generally used their market power to force-up user costs and boost their profits. We saw 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 has been far worse than raising their taxes. It is also less transparent, 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.
Accordingly, we are now witnessing the growing global disillusionment with free markets, including within Australia.
Ponzi Perrottet should recognise that doing the same thing over and over again and expecting a different result is the definition of insanity.
