JimC wrote: ↑Fri Feb 08, 2019 8:59 am
Certainly some of the privatisation measures by both federal and state governments in recent years have been fire sales to rescue flagging budgets, and the resulting private ownership is not always been good for the people at large.
Having said that, it is still reasonable to ask the question as to which sections of an economy are best under government control, and which are best left to free enterprise.
While fire sales were welcome topups for budgets, most of them, including Keating's sales initiatives were ideologically motivated. Keating's electoral campaigns were actually based on his claim that he could run capitalism better than the conservatives. Hence his bargain basement sale of the Commonwealth Bank (which has now become one of the four chief culprits fleecing hundreds of millions of dollars off its customers, including dead ones, for services that were not provided) and Qantas (which used to win the safest global airline award year after year, but since maintenance contacts have been outsourced to foreign businesses keep having bits of its airliners falling off or exploding). Power plants were supposed to reduce electricity bills after privatisation. What happened instead was that prices increased faster than before the selloffs.
None of that is particularly surprising for two reasons. Firstly, the superior efficiency of privately run enterprises turned out to be fictitious. Secondly, privately run enterprises had to add a profit margin to the already existing overheads.
I have personal experience of this when the St George Building Society was sold, becoming the St George Bank. Having had a savings and a mortgage account with that institution at the time, I received a letter promising that the new outfit will, unlike all the other privately (that is shareholder) owned banks, it will never introduce account keeping fees, and I will always be greeted by a friendly face from the other side of the counter.
A year or 18 months later account keeping fees were introduced and the smiles of the bank's staff had disappeared. They were replaced by stressful looks because staffing levels had been drastically cut across the board, leaving the remainder struggling to cope with their workload. I mentioned those broken promises to the bank manager of the Oatley branch one day while negotiating a mortgage on another property. Her reply? "Well, yes." she sighed, then continued. "We had not reckoned on the pressure by the shareholders to increase the profit margin."
Businesswise, the St George Bank was quite successful. It swallowed some smaller banks, eventually becoming one of "the big six" in Australia. Then Westpac swallowed it. Westpac turned out to be the worst offender of today's "big four", all of which were involved in the shearing of the flock scandal the Banking Royal Commission reported on in gory detail last week.
I need to mention that St George was never a government-owned institution. It was a community, not-for-profit one, growing quite nicely for decades until the board of directors somehow became stacked with personnel which decided that making it a private enterprise owned by profit-seeking shareholders was "a good thing". Account holders were offered a carrot in the shape of small parcels of shares, the size of which was determined by the number of accounts they ran with the building society, and the number of years they held them. The bulk of the shares were sold via IPO. Of course those small parcels finished up on the open market before long, to be snapped up by the bigger fish, and they were the rapacious profit seekers. St George is not the only community owned service provider that died in that manner. Would you like to me to tell you about NatMut? The NRMA? I had personal experience with them too, and the result was the same. My bet is that the Bendigo bank will fall victim of the greedy fuckers before long too. We never seem to learn from the past. Big business keeps winning at the expense of ordinary folk. Stupid us.
