Current Issue #488

Modern Times: Power privatisation's failure is no shock

Modern Times: Power privatisation's failure is no shock

It has become clear that privatisation, once considered a great monument to neoliberalism, is an edifice of clay. The idea that privatisation leads to greater efficiency, which benefits the people, has proven to be a delusion of grandeur.

There remain, sadly, those who continue to wish for important public assets to be placed in private hands.

The fallacy and fallibility of privatisation is clearest in the case of electricity. The abject failure of the removal of electricity assets from public ownership has been keenly felt in Australia. The people’s interests are served when energy is secure and delivered at a low cost. A policy that allows natural monopoly to be in private hands, motivated by profit rather than social benefit, is fraught. The vast majority of voters didn’t want electricity privatised in the first place.

The ownership of electricity assets has been a blind spot in South Australia, the last state to nationalise electricity in 1946. Little more than half-a-century later, it was returned to private ownership — in direct contravention of John Olsen’s Liberal Government’s pre-election commitment for ETSA to remain public-owned. This decision was wildly unpopular, with polls suggesting that around 90 per cent of South Australians wanted electricity assets to remain in public hands.

The people instinctively knew that the decision to privatise electricity was not in their interests, and this public sentiment has since been vindicated. Prices have increased and service has become less reliable. Will this mistake be repeated with respect to water assets? The current generation of South Australians, who live in the driest inhabited state in the driest continent in the world, surely do not wish to see water assets become an unquestioning slave to the profit motive. South Australians would no doubt prefer secure and affordable water.

A society functions best when basic needs are universally guaranteed. Secure and affordable energy and water are basic needs. Affordable access to transportation, communication and hospitals are basic needs. Access to culture is a defining feature of inclusive, progressive societies: galleries, libraries and museums open to the public fulfil the need for humans to think, to understand, to reflect. Yet there remain politicians and political parties that exist to place assets and institutions, which hitherto guaranteed basic human needs, in private hands.

For some modern politicians, the temptation to privatise remains irresistible. It satisfies an ideological craving. It has an instant positive impact on the bottom line, and the resultant surpluses may, from a distance, give the appearance of disciplined frugality. It abdicates responsibility for efficient and cost-effective provision of services, as well as administrative burden — even if regulation is always necessary, and ultimately government is seen as responsible when basic needs are not met, or are too expensive. The compulsion to privatise should have been condemned by its reality.

The decision to privatise often comes at the loss of significant political capital. To prepare the ground for privatisation, a narrative that discredits the state is first necessary. The irony is lost on politicians who actively discredit the state and its role in society, while harbouring a personal ambition to lead a government that they so determinedly disparage. Neoliberal politicians adopt a strategy of winning government by discrediting it; seizing government to render it impotent. It is difficult to see how this is personally satisfying.

Small, inactive governments may appeal to a minority of people whose economic and social securities are guaranteed. For those born into unfavourable circumstances, the freedom to roam in a dog-eat-dog world is hardly liberating. And the things that were once shared in public spaces gradually disappear, removing the links that bind citizens through common experiences.

Most people would prefer to share essential public goods and services, the sum of which is the hallmark of society. As they flee the crumbling neoliberal edifice of clay, they will turn to the party that sees government as a structure able to accommodate our basic needs, protect us from the vagaries of the market, and provide ample space in which we can explore, then realise, our individual and collective dreams.


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