In 2016, in what was described as a “blistering attack
”, Australian Competition and Consumer Commission chairman Rod Sims said he was beginning to have serious doubts about privatisation.
“I’ve been a very strong advocate of privatisation for probably 30 years; I believe it enhances economic efficiency,” Mr Sims told the Melbourne Economic Forum.
“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.”
Sims, hardly a radical socialist, slammed the sale of ports as “dopey” and said deregulating the electricity market and offloading poles and wires in Queensland and NSW had almost doubled power prices.
“When you meet people in the street and they say, ‘I don’t want privatisation because it boosts prices,’ and you dismiss them… recent examples suggest they’re right.
“I think a sharp uppercut is necessary and that’s why I’m saying: stop the privatisation.”
Scott Morrison and Peter Dutton obviously weren’t paying attention. Their plan to privatise our national visa processing system takes a major step this month with the winner of a tendering process set to be announced.
The winning bidder will build a digital platform to process most temporary visa applications (tourists, temporary workers, international students) thereby freeing up the Department of Home Affairs to assess “more complex applications
The upfront investment is likely to be $1 billion, but the winning consortium, while guaranteeing the $2 billion the government receives every year from applications, will be able to charge an additional $35 service fee
per visa, or $315 million per annum based on 2017-18 volumes.
The government insists that the outsourcing does not, in fact, privatise visa processing despite the very obvious fact that that’s precisely what it does.
The people like it public
So what’s behind this decision? Well it’s not because it’s a vote-winner. The Australian public, much like Rod Sims, is deeply opposed to governments selling off the family silver.
A 2015 Essential survey
found that 70 per cent of Australians believe that privatisation increases prices for services, while the same number believe that privatisation mainly benefits the private sector. Only a third of respondents believed that private companies delivered better services than the government.
And you can hardly blame them for thinking that. Since privatisation became all the rage during the neoliberal turn of the 1980s, our national institutions – Telecom, Commonwealth Bank, Qantas – have been hocked for cash and morphed into loathed monopolies and corporate monoliths. Another Essential survey actually found strong support
While some argue that privatisation has improved services, costs to the consumer have soared while governments have surrendered decision-making, hamstrung their ability to make long-term plans, and transferred vast quantities of money into private – and often offshore – hands.
“Think about Sydney Airport, the nation’s power stations, our state TABs and the ‘poles and wires’ deal in NSW. Add in Medibank Private and QR National (now Aurizon). No-one takes the deal unless they are expecting to make money from it – cash that could have otherwise accrued to government coffers.
“It’s also tempting to wonder what decisions might have been made differently if government still owned some of those assets, particularly in energy. Would there be as many coal-fired power plants? Would distributed energy (where locally produced and stored energy replaces or augments the main 'poles and wires’) be further along if there was no government incentive to lease the distribution assets?”