Privatization. You've been conned.

I don't reckon there's much else to say dog, they've nailed it from all angles.

They questions left in my mind are

- are enough people now "switched on" enough to what's happening to influence government policy
- will whichever party that's in power give a shit, or will business as usual continue for the benefit of the big boys at the expense of the rest of us.

I'm optimistic that especially with the development of battery storage and the push from guys like Elon Musk, this issue will develop a critical mass and make progress.

Loved seeing Whetherill front Friedandburned, classic.

Lol now their going to spend 2 billion of tax payers dollars on expanding tne snowy mountain hydro scheme. Considering the libs are all for selling off the countries assets to big bussines , how long till that gets sold off too? My guess is , thats the reason malcom wants to do it in the first place.

Victoria under Kennett went further down the privatisation route than even Thatcher, at least she didn't sell water, gas or electricity. All sold here. Rail and Tram network run by a private operator. Private Competitive Tendering was also mandated for all local governments meaning "contractors" now 1/2 do what was once thoroughly done by council staff. Where I live we have contractors to trim trees, others cut grass while a different contractor cleans graffiti and picks up rubbish; not sure how that could ever be cheaper, hiring three sets of contractors to maintain the same park. Local governments were also amalgamated.

In states where public utilities are still "public" fight tooth and nail for them to remain so.

The irony of Turnbull's Snowy project shouldn't be lost on anybody, it came perilously close to being privatised under Howard except for objections from the then NSW and Victoria Labor governments who incidentally are the majority owners of it but were only given 24 hours notice of Truffles announcement, that's policy on the run for you.

Sheepy, the CES privatisation ..... all those billions fraudulently claimed by those private training operators - Royal Commission anyone?

Finally, all kudos to Jay Weatherill for calling out Turnbull and Frydenberg for continually lying about SA's energy problems. The man is a champion.

You're right on the money with private health funds fong they are so profit driven they've almost made themselves redundant. They've forgotten that we can still go to a hospital if we need it and get priority if its serious. All propped up by the gun the tax office puts to peoples heads over the medicare surcharge.

Smiley, I don't know if you're from SA but don't buy in to the Weatherill/Frydenberg rubbish too much. Weatherill is only trying to save his own skin and used it to launch his unofficial campaign to cover up how his government botched our energy grid. He's going to blame the feds for everything as its his only remaining card.

Renewable energy is the future, but they subsidized it to push coal out of the market (and it worked). They didn't have the brains to think about the next bit tho!

Someone needs to explain why it is not a reasonable thing for SA to rely on the interconnector b/w SA and Victoria when the renewables cannot provide the base load. Isn't that what a national network is supposed to do? I look at this way, people ought not buy into the narrative from Truffles and Frydenberg, the national network, the network manger and enabling legislation clearly need review in light of the increasing renewables everywhere but that's it. I think SA has been unfairly treated in the political and policy vacuum that is our current climate change and power generation situation. First and foremost its a lack of national leadership and that reasonably can be sheeted home to the LNP. They are now seemingly the only ones not wanting a price on carbon, all else follows from that ....

The irony is sa relies on the coal powered electricity of Victoria to live the utopian renewable dream. If victoria doesnt generate enough power (which it wont when hazelwood closes) the interconnecter might as well be a chiko roll as far as sa is concerned.

The renewable situation was a great idea and when the RET was only 20% everything was apples. Then Weatherill lifted it to 50% and the grid failed because coal couldnt compete with wind when the wind was blowing, so they all closed and now we're snookered.

Gaz wouldn't you say that in the greater scheme of things, these are just minor stumbles in taking very important steps forward?

You might see S.A. as having utopian ambitions, but surely this is fundamental stuff.

Eh yeh ur right andy I'll begrudge you that, but i have to say im deeply disappointed at how much our state government has botched this opportunity. The half a billion dollar bandaid is only needed because they forced coal out of business too early without a backup plan.

The rest of the nation is talking about it now but sa really jumped on the grenade here. Weatherill destroyed any bipartisanship hopes with the feds and now renewables will end up politicised like "boat people" or "pink batts".

I might add, the libs will only swoop in and privatise it again anyway. The new power station will be sold to pay for the hospital just like the old one was sold to pay for the state bank.

Gaz it looks like one of the biggest issues here is that when it comes to CO2 emissions, gas seems to be no cleaner than coal.

http://www.aljazeera.com/news/europe/2014/10/study-finds-natural-gas-no-...

At the same time, the gas plant is supposedly only for "power grid stability and for emergency power needs."

So in my books, a serious move towards renewable energy has to be a good thing, no?
Also, if you think that the LNP were ever going to be part of any bipartisan move towards a change in policy away from coal etc., I think you've got rocks in your head.
Federal politics, especially the LNP are going to need to be dragged kicking and screaming.

Yes the Libs will try to privatise the whole show again but I reckon there's the beginning of a fundamental change of public opinion that will prove too much for the political right to ignore.

Or, I could be completely full of shit.

pretty broad statement fong. ...privatisation of what? do you suggest that we should more like cuba? or are you targetting particular industries that should not be open to any privitisation at all? ..... "failing to provide adequate health care to all?"....you are joking right? which aspect of health care is not provided to all?

is it?

Seems like none on this thread works or has worked for a government department.

Ah the old chestnut about sitting around all day drinking cups of tea! Nice work Tony.

GS, do you really think thats what was implied. If so then maybe ask yourself. But no, thats not was implied. Not so cliche.

Okay Tony, what's you point then?

fong. agree, where there is no money to be made then private health wont touch it. but if that leaves the rich with a false sense of "security" about their own health then they are the dumb ones paying for it. most people who understand health will understand that you cant buy it. however i disagree about delivering babies. private hospitals do deliver babies and at an exhorbitant cost too. so much so that my wife and I are ditching private health insurance to have our second baby in a public hospital. complete waste of money. im pissed off we paid it for years only to ditch it 5 seconds before due date, but thats life.

i understand where you are coming from about lack of responsibility but also consider that a primary reason too for privitisation is efficiency, and secondly also to save tax payer dollars. its a false reasoning actually, the australian public are so obsessed with tax reductions that they will throw away good public services in an attempt to save 5c on their tax bill only to stung with a big bill from mr corporation. any party that takes increased taxes to an election is dead in the water.

anyhow, what i was getting at before in my previous response is that there are some industries where privitisation makes sense. telecommunications is one of them. so its all about balance and understanding how the increased productivity and efficiency of privatisation is weighed against social issues such as ethics. health for example is one where i believe no private health should be allowed and it should all be covered under a public system. all people regardless of wealth deserve exactly the same health.

Dismantling the State...privatisation...examples where it's worked out for the better for the user/consumer/citizen in terms of the service provided?

Another thought. The cheerleaders for say, public servants getting the arse, or even public services being privatised and out-sourced, are also the loudest whingers and complainers when it comes to the slowness and difficulty and inefficiency and cost of using and communicating with (former or gutted) said services they subsequently experience?

for fixed line, telstra sell off was a mess. we are paying for it sure. but in the mobile telecom space I reckon we are better off with a privatised telstra than a clunky old government body trying to serve up the rapid technological advancements that this industry has and still is seeing. how would it have faired against voda and optus or would it have run losses at taxpayers expense? i dont see telstra as a mark against privatisation, but more of a mark against howard.

Crap

Hot off the presses. Privatisation! Neo-liberal economics! Get some!

https://www.theguardian.com/commentisfree/2017/mar/24/the-childcare-bill...

"The real congratulations due to Malcolm Turnbull here are not for another policy non-solution – but provision of yet more evidence of how comprehensively market economics fail every community – except, of course, the hallowed ranks of corporate opportunists and profiteers."

Above article comment:

"No quibble at all with the thrust of this article - the unasked-for economic experiment of neoliberalism that became a global orthodoxy has indeed comprehensively failed; the GFC was its final nail. The unravelling is slowly unfolding (just look at the energy sector -- Government paying for new power generation! Imagine that being proposed ten or even five years ago!), but the yesterday people of the LNP are stuck quibbling over neoliberalism's still-shambling corpse."

Of course privatisation is a crock, in most cases but not all.

The best reason to privatise is if there is already a healthy and genuine market operating, and there isn't a good social case for government being in the market.

But for any situation that is a natural monopoly, or more likely in Australia, an oligopoly, then it is best held and managed by the government. There is a middle ground here, where the government can mange the entire thing through the public service while getting the private sector to do bits and pieces of work to sustain the enterprise. It is all do-able and doesn't have to be ideologically driven.

Just a couple of observations - the NBN isn't a private company as such, it is a company structure wholly and completely owned by the government, so not really private sector.

The NBN problems haven't been caused by the company but by shifting govt policy, and the Tony Abbott determination to wreck it, cleverly using Malcolm Turnbull to do the wrecking. Well done, mission accomplished, but it can be saved yet.

The Wetherill government did not close the coal fired power stations Gaz, they were privately held companies that couldn't compete and the private companies closed their privately owned facilities.

The RET is not the reason for SA's power woes. Has nothing to do with it.

The interconnector between SA and Victoria was originally planned as a dual connector arrangement, but the then Liberal Govt of SA made the decision to make it just one connector to increase the price of the generating assets they were looking to sell. Again, privatisation and the liberal party have their fingerprints all over this debacle.

The gas market is a fark up entirely because of privatisation ideology, and largely to prop up ridiculous business plans supporting the LNG processing plants in Qld. The owners of those plants have written down something like $6B on the value of those plants, and still need to run them at capacity to make sure they don't renege on watertight contracts and lose even more money. The sky high gas prices we are paying are entirely to support those private interests, and it is OUR gas.

The Snowy Mountains scheme announced by Turnbull is something I have been wanting to happen for a while now, but only if all the power used to pump water back up the system is generated by renewables. It only makes sense as a method to turn renewable and intermittent energy into baseload, otherwise it's a crock of shit.

In any case, I suspect the Snowy upgrade will never get built, well, not by this government and not before 2025.

Carry on.

I like the start of this article:

"For those with memory longer than yesterday, which cancels out most of Australia’s political economy..."

http://www.macrobusiness.com.au/2017/02/australias-enron-moment/

Jello Biafra had a great spoken word piece about the original "Enron moment" on his 2002 album "Machine Gun in the Clown's Hand" called "The Rolling Blackout Revue".

As he states, it was "privatisation gone wrong...yet again".

Some comments after above article:

"Generating electricity serves only one purpose – to affordably and reliably supply something modern civilization cannot do without.

How is it that this extraordinarily complex marketing system that splits what is essentially a single, integrated system of production and delivery into many dozens of private owners of various bits and pieces of the whole, which then requires strict and constant regulatory oversight to prevent these individual profit-driven firms from gouging the nation or even threatening supply integrity – how in God’s name did this ever come to be veiwed as a more efficient way to go than a publicly-owned monopoly?"

"As far as I can see, the issue here is that we are promised a free market system that naturally seeks the most efficient outcome. The reality is that once corporations become involved, they use the rules to seek maximum profit. Sometimes they change the rules to maximise profit. The CEOs probably want to maximise their annual loots.

The accepted ideas economists have promoted about the magic virtues of a free market are half baked and incomplete. The “free market” is a narrow subset of game theory. The “Game” is set by the rules and the players. In the case of Electricity supply as in this case, it is naive to expect a good outcome. What the public want is lower priced, better electricity, however if you look at the way the Game is arranged, the public are actually not players! The Corporations and the Government are the players and their idea of winning has nothing to do with the public. So, in that light, what other outcome would you expect?"

"“how in God’s name did this ever come to be veiwed as a more efficient way to go than a publicly-owned monopoly” you ask?
The mass hysteria that took over the world known as Neo-liberal Economic Theory around about 1980 or so.
We only just now are enjoying a bit of the buyer remorse. (nearly 200% GDP private debt, private monopolies of essential services, insolvent banking systems, etc.)"

so TT, in what respect has a deregulated mobile telecommunications sector failed australian consumers?

you said it was crap. why?

https://www.theguardian.com/commentisfree/2017/mar/24/the-childcare-bill...

van badham confused thinking. more interested in promoting her arm waiving than any actual critical examination.

you and badham would probably be a good couple TT.

Its been briefly covered elsewhere I remember, perhaps in comments dealing with tax avoidance in developing countries, but it is interesting to see how public utilities are privatised in the 3rd world as a condition dictated to the countries receiving aid from the World Bank. Its a further way the West/Capital screw developing countries ... sure we will lend you the $100 million US to build the dam to drought proof your people but best privatise that dam to that favoured Western country to ensure its run efficiently and you pay back the loan; but, but ... no buts, do you want the loan?

Privatisation obviously doesn't work.

But Why?

Why doesn't competition keep prices low like they said it would?

if the commonwealth bank was never privatised it would be running at a loss to the taxpayer just to keep up with all the other private banks. even the big bulky banks are continuing to loose market share to smaller cheaper lenders as competition increases. a loss to the taxpayer means it must be covered by taxes. maybe I dont want to pay taxes for that? unless you run a heavily socialist society people like shop with their hip pocket.

ill save you the expense of reply TT.......'crap'

@Indo, what's better, owning your own house or paying rent all your life? Privatisation is paying rent at an inflated price to account for shareholder profits to eternality. Its a simple example but that's it in a nutshell. Why sell the family house for a short-term fix on cash in hand? (or in the case of Howard he flogged off everything he could get his grubby hands on to pay for recurrent expenditure {middle class welfare - 1/2 CGT, super concessions etc} that we continue to pay for until we get a government with the balls to remove them).

@happyasS, where did you pull that from? that's crap Ray.

@ Guy Smiley

I agree totally, that house rent thing is exactly how i always think of it.

But why doesn't it work? Why doesn't it create competition and keep prices low?

Is it because if it's state owned it shouldn't need to run at a profit, it just needs to break even or close too, it shouldn't be about profits but rather providing a service.

While as a private business their aim is to earn profits as much as possible and instead of competing against each other they all basically try to make as much money as possible.

Is this part of the reason it hasn't worked????

The strange thing is when you look at things like local councils etc they are kind of public owned and shouldn't be about profits but be about providing services, yet they are terribly inefficient, money gets wasted left right and centre, generally massively overstaffed and get little back from these staff.

Public or privatised entities mostly operate in markets with very little competition (monopolies) meaning in some cases no need to become efficient, as in world's best practice just put your prices up each year!; in fact in some cases the rules set down by government for the privatised entity to operate under encouraged over investment e.g. gold plating the poles in wires with a guaranteed rate for return for the investor (main reason electricity costs have increased over the last few years). Lots of publicly owned entities did make profits which were paid to government (taxpayers) as dividends or put back into building infrastructure.

If you want to look at wasted money at LGA level in Victoria look at compulsive competitive tendering (CCT) introduced by Kennett. While all waste should be avoid I think CCT has increased costs to rate payers as contractors (profit based) now (poorly) do the work previously done by council staff.

GS. i know quite a few people that worked in govt over the years. government departments are highly inefficient. breeding grounds for contempt of the workplace, unaccountable mismanagement, massive cost overruns, and inflexible outdated workplace structures.

government departments are plain unable to pay for the high skill base many new industries require. engineers with over 10 years in the workforce will struggle to earn much more than about 100-120k no matter how hard they work in a govt dept. the government just cant pay anymore, the money doesnt exist. the base pay is too low for them and bonuses just dont exist. so what happens to them? they either leave for private industry or they work 'less hard'.

the days of governments holding all the skill base they need as our education requirements grow and we specialise our economy are well and truly over, you can't compare to the days of old, we live in a highly international mobile workforce these days. there is little choice but to outsource if we are to remain top of the ladder internationally.

While there is some truth in your statements there are lots and lots of dated generalisations there.

I Still don't get it.

I dont understand how the whole system works, but how can there be very little competition?

Looking at a comparison type website's there is at least 10 electricity providers in Victoria and similar for Phone and internet.

Are some owned by the same companies?

Or a these just like retailers and there is only say two wholesalers?

Ten or more is decent number it's not like Super market chains where there is only a few.

dated generalisations? why not take a look youself at payscales for the public service and tell me how many highly skilled professionals are even going to bother?

my bro is a draftsperson (tafe skill) for an engineering firm, even he earns more than people with engineering degrees in government.

are you suggesting that our economy hasn't becomes more and more specialised over the decades?

struggling to see what dated generalisations you think im referring to?

Indo, good point. How many power generators are there in Victoria? maybe a few. Operators of the poles and wires? probably more than number of power generators. Retailers? way more than poles and wires operators and power generators. So we have 3 tiers of private businesses all required to generate a profit for their owners while apparently wanting to make power cheaper for customers. Yeah right. How is that more efficient than the days when we had the SEC doing the lot and paying dividends to government (taxpayers)? Sold a pup we were.

Happy, are you serious? reread your first para at 4.37 pm, that all evidence based is it?
I actually worked in the public and semi public sectors for more than 2 decades. I don't see any of the malaise you refer to, maybe drafting is different, what I saw was a highly skilled, motivated and efficient workforce. Your statement about skilled staff not getting paid a good wage is also wrong based on my personal experience. When comparing wages and conditions of the 2 sectors look at: actual salary, superannuation, leave provisions, security of employment and actual hours worked, that way you compare apples with apples.

actual salary....basically 100k for engineers capped regardless of experience.

super is the basically the same, the old days of govt pensions are gone.

security of employment...well that works both ways - very hard to fire poor performers.

leave provisions....4 weeks....more flexibility in taking leave but otherwise same same.

actual hours worked. i'll give you that one. but highly skilled professional people want money, not an easy going job.

i can tell you for a fact that professionals leave the public service when they hit the pay limit.

I reckon Australia is just too small for the whole privatization thing to work. There's no competition or incentive for big corporations to play market hardball with each-other. There are cities with more people than our whole country combined so its just idiotic to think of ourselves as grand world players when we just don't have the population for it.
Surely only a meathead would think its a good idea to privatize an essential service that holds monopoly over a market (Centrelink, Medicare etc). Mixed feelings on Telstra though.

Having said that, I also have zero faith in the public sector to deliver the same services due to rampant cronyism and government interference so it seems we're doomed either way.

Both public & private lead to higher prices either through inefficiency or profit seeking. In South Australia we have SA Water (Government owned) pulling out dividends in excess of $300m per year so we get boned either way.

Batfink, I'm slow to get back but we are in agreeance. The government didn't close the SA coal power stations, but they did destabilize the market they were operating in which led to the private owners fleeing for their lives to cover profit margins. SA libs privatized it, then SA Labor chased the suppliers away by rooting the market. Dickheads. All they had to do was entice coal to stay another year or 2 while renewable energy suppliers worked out the kinks in the grid.

This was raised before, talk about putting the fox in the hen house. Privatising the Land Titles Office, there is no way a private company should have this information and be making money out of it, at our expense.
http://www.smh.com.au/nsw/land-titles-registry-selloff-the-lastminute-de...

"Even this guy who has argued for privatisation for 30 years is almost ready to change sides.
Prices go up, good jobs lost, service goes down while the profits go offshore."

S. McManus

http://www.smh.com.au/business/privatisation-has-damaged-the-economy-say...

oh thats gold. the ACCC is sooking because it doesnt have the teeth to do its own job.

is privatisation the problem here, or lack of governance?

Happy arse, teeth? Who's the dentist again?

John clark just died.

That sux.

RiP Fred Dagg.

its ideological SD. small govt. less tax. it sells to the public come voting time. do i agree with it? no. but in the absence of political/media structure in which we can actually debate and understand policies come election time, lower tax is one of the primary levers that gets pulled. both major parties are afraid to step outside and discuss the future in proper terms. labor has a fair go in many respects, but carefully treads around the tax debate too. an unfunded future isn't much better than no future. so for the while continued privatisation is any easy short term win.

You forgot the most important one , Sheepy.

No 4 - Comes in a brown paper bag.