In last night’s Budget the Federal Government tried to sweeten the state
government pot. The formula to top up state assets with resources obtained from
the privatisation of Medibank, recently discussed between state governments and
the Commonwealth, might sound a good idea, but it will have a negative effect
on state governments if they accept the offer.
The effects would be felt in both financial income to the states, loss
of regional employment as well as reduced services and the movement of monies
overseas, not to mention increasing the Australian balance of trade through
increased foreign capital.
"State governments should be advised not to fall into the trap of
considering this option and to look beyond a year one 15% percent
incentive," said ASU Assistant National Secretary Greg McLean.
"If you were to take a 15% increase in sale revenue and spread it
over the life of the asset the amount would be far less than half of one
percent based on a short 30 year asset going forward value."
"State governments, local government, communities, public sector
asset employees, as well as their unions, should oppose this pea and thimble
trick of the Federal Government that will see communities and families lose and
see the price of the services increase. Any asset once privatised must increase
its charges to get its revenue stream increase to offset its asset spend, let
alone the additional increase in asset price and in turn charges if the asset
is onward sold for a second or third time," said Greg McLean.
The public has come to realise that privatisation means:
- Less service
- Monies moved from their local communities to other communities where the new owners live, almost always outside Australia
- Reduced efficiency
- Recovery issues after natural disasters
- Less financial gain for the community
- Less employment
- Fewer skills
- Increased prices
- And more losses to our communities
In the case of the NSW poles and wires corporations, as an example, that
returned almost $1 billion to the NSW Treasury this past year. That would mean
the sale revenue would need to be many, many times this figure, even with a 15%
bonus, just to break even. And that figuring does not include the above short
and long term negative effects.
The ASU commissioned paper, "Electricity
Privatisation in Australia - A Briefing Note" produced by Dr Phillip Toner
of the University of Sydney, plus a range of news items from the media
earlier in the year and numerous international examples all support the view
that privatisation of state government assets, with or without a Federal
Government subsidy, just does not add up and is a failed economic mantra.
Contact Details
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Name:
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Greg McLean, ASU Assistant National Secretary
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Telephone:
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+ 61 419 796 801
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Email:
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