[LINK] selling the furniture-- in Detroit

[stephen at melbpc.org.au]

Frank writes,

> .... something has to be done to stop the erosion of our infrastructure,
> assets, lifestyle and standard of living as governments 'sell of off the
> farm' to cater to current cash demands necessitated by the politics of
> selfishness that's been endemic for the last 25 years..

Thanks Frank.

Good points regarding privatization, made in a powerful, persuasive manner.

Yet, according to recent media reports, Australia and NZ leads the world .. 

"Privatization Raises Billions in Australia, New Zealand" G. TAN, 5/11/2013
Australia and New Zealand rank among the global leaders in privatizations 
this year, raising billions of dollars as lawmakers seek to cut debt and 
plug budget deficits. Three (recent N.Z.) deals are among the five biggest 
privatizations via IPOs in the world in 2013, and raised a total of US$3.7 
billion—ranking New Zealand first globally in privatization via IPO this 
year. Australia, meanwhile, this year ranks 2nd globally in privatizations 
through direct asset sales, raising US$9.65 billion, according to Dealogic. 
And more assets could soon be up for bidding, including the country's US$22 
billion student-debt portfolio and health insurer Medibank Private, which 
is worth up to US$3.8 billion, according to analysts."

Ref:http://online.wsj.com/news/articles/SB100014240527023034825045791793621
70155466 

And, http://thestringer.com.au/wall-street-journal-cheers-on-an-aussie-
privatisation-spree/#.Ur10e9IW3SM


> I guess what I'm saying is that if we sit back and let it happen, it'll
> all get sold out from under us and one day we'll all wake up as permanent
> tenants in what used to be our home. We'll have dispossessed ourselves..
> As for us, we should also take the long view .. but .. baby boomers don't
> seem to have much of a talent for that.. Which is why I still reckon we
> should get out of the way of the following generations now ... they at
> least have more motivation to fix the situation. Whether they have the
> ability and tenacity remains to be seen.


But here mate may I say with respect, having raised this problem, it seems
a bit of a cop out just to offer as one solution , "we (oldies) should get 
out of the way." Here's a problem, you formulate/implement solutions. Haha.

It seems to me that competition or regulation are the keys for any success.

Eg, only privatize industries that can compete. A problem is that public 
assets like toll roads, airports and rail systems tend to be monopolies or 
quasi-monopolies. Any potential benefits of competition are extremely hard 
or impossible. So in such situations careful regulation is essential. Sure 
it's tough to fine-tune such laws, but, both a competition AND regulation
vacuum will obviously be a cash-cow enemy to our longer-term public good.

*The central point is, Australian governments should NOT be allowed to use
privatization as an expedient source of funds*

This report below seems to sum up the Au privatization situation very well:


"Growth 50: Privatisation: A Review of the Australian Experience"

Privatisation in Australia is bringing mixed results, this report argues. 

Private ownership with regulation is one option. In other cases government 
ownership may better achieve society's objectives. But neither option is 
perfect - this is the fundamental privatisation trade-off.

Most contributors to the report agree that privatisation is beneficial when 
it results in private firms operating in a competitive market. But 
contentious issues can arise when natural monopoly assets are privatised. 

The crux of the privatisation debate lies in those areas where markets may 
not achieve the desired objectives. In some areas competition may not be 
viable; in other areas private incentives may not match public welfare 
criteria.

While there are still many government assets which could be sold, many of 
these assets provide services which are not profit-making. These sectors 
are more likely to involve private sector participation through long-term 
contracts, rather than divestment. However governments will need to improve 
their skills in designing and managing such contracts in order to attract 
private capital into these areas.

The report also notes that:

* The overall verdict on privatisation from a consumer perspective is one 
of mixed success, with insufficient attention to consumer outcomes.

* Governments are grappling with needs for a new or extended accountability 
model when monopoly business activities are privatised.

* Governments should not be allowed to use privatisation as an expedient 
source of funds.

Ref: http://www.ceda.com.au/research-and-policy/research/2009/11/growth-
report/growth50

Cheers,
Stephen


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