Privataizations over the last 20 years from both sides of politics have saved NSW taxpayers from being locked into the ownership from some frightful businesses.
The Coalition with Peter Collins as State Treasurer, sold the State Bank and the GIO in line with the Keating Government’s advice that followed a financial collapse in Victorian caused by the mismanagement of a State-owned bank. Imagine if we had continued to carry those incalculable risks through economic cycles?
My government carried out three exemplary privatizations. TAB raised us $984 million in 1997 – off the government’s books because we could see Internet gambling on the horizon and the state should not be owning a chain of betting parlours; Freightcorp in 2002 because this state-owned corporation was never going to fend off competition from private freight companies (the rail union saw it and backed our sale package ) ; and Powercoal because the only way to renew these coal mines was with private money not money from the state budget and the coalminers union understood this too, and supported the sale.
Now we’ve got state lotteries and waste services off the state’s books as well. What interest have taxpayers have in running a lottery – less well than private lotteries overseas – or a network of waste treatment plants and land-fills?
The case for privatizations is:
- to shift risk out of the public sector ( the State Bank, the GIO, TAB )
- to get private capital for expansion ( coal mines, rail freight )
- to lift productivity in the interest of the state and national economy ( freight, coal mines ).
All these arguments apply to electricity.
Queensland Labor can be proud of winning through on the IPO for Queensland Rail – the risk shifted from the state’s books, money from share-holders available for investment and efficiencies bound to follow.
Because of the naive Fabianism at the heart of the electorate ( “selling off the family silver” ) these are never popular. They happen best when they stay off the front pages. But we are better off because they have been made to happen.