Matters of Public Importance – Privatisation

19 Jun 2024

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The Greens have proposed this MPI, matter of public importance, debate calling on the Victorian Labor government to end its privatisation agenda because the Victorian Labor government has got a problem.

It has got a problem with privatisation, and it is time, I reckon, for an intervention.

The Greens believe that public services should be delivered in the public interest. We believe that public assets should be used for the public good.

But the Victorian Labor government is embarking on a massive privatisation agenda, arguably bigger than what the Liberals did. The government are privatising parts of government that one would not have thought possible in the past, and now they have reviewed every single Victorian government asset for privatisation.

Let us go through the evidence of what we have seen under this government: the privatisation of public housing estates, the Port of Melbourne, the land titles office, VicRoads licensing and registration functions and public land sales.

They have continued on with the privatisation of the train and tram network, continued on with the privatisation of toll roads, continued on with the privatisation of prisons – private prisons – and continued on and expanded the privatisation of infrastructure.

We are now seeing construction and basic maintenance of roads, schools and hospitals all under public–private partnerships.

We see the privatisation of policy advice – around $100 million going to the big four consultancies for policy advice; they are basically a privatised government department.

Looking towards the future, we have now heard that they are looking to privatise Births, Deaths and Marriages Victoria.

That is extraordinary. And now we find out the fact that they have got an investment bank to review all of the state’s public assets for privatisation.

That means that every single government department, every single government agency and every function of government that requires a transaction can be outsourced to a private company. They are on a hit list to the point where we could just have a shell of a government.

This is a neoliberal dream, no doubt, but this will be a nightmare, an absolute nightmare, for Victorians, who will have had their government hand over control of critical functions of governments for decades to come.

It is Victorians who are going to pay higher prices for lower quality services, and it is going to be workers who will have less jobs, get paid less and have worse conditions.

This policy of this government to underfund public services and to run down public assets and then sell them off to the highest bidder is neoliberal economics at its worst, and it is all being undertaken by the Andrews–Allan Labor government here in Victoria.

The Greens want to see an end to privatisation here in Victoria and put an end to a state completely controlled by the interests of corporate profits and not being run for the public good.

The privatisations that Labor are undertaking now will have consequences for decades and for generations to come.

This government is handing over control of public housing land, essential services, tolling rights on major roads and public assets for a decade.

They are creating massive private monopolies for investment funds and for private asset managers to profiteer from.

How much more do we have to hear of the damaging consequences of privatisation before this government stops handing over government assets and services to private corporations trying to make a profit off essential services?

These are supposed to be delivered for everyone in our society.

Labor are creating what has been described by economists as a rentier capitalist state where the government, and ultimately the Victorian public, are bankrolling private companies to extract profits from public assets and public services, instead of being focused on delivering public services for the public good and making sure that everyone gets access to the services they need.

Why is this government doing it? What are the so-called benefits, the reasons, why they might be privatising nearly our entire state?

Is it for the benefit of competition – putting things out to the private market to lower the cost or deliver services better or more efficiently?

Well, no, because the government are handing over public monopolies where there is no competition.

They are creating a private monopoly where there is still no competition. There is no competition on the port and no competition on VicRoads. There will not be any competition for births, deaths and marriages or on the train or tram network.

There is no motivation to improve services, no motivation to lower prices and no motivation to increase efficiency.

The only incentive for these private companies is to extract profit. We have seen what the supermarkets are doing with a duopoly – what they are doing with prices.

Now the government is literally creating a private monopoly.

The Essential Services Commission found that the privatised Port of Melbourne overstated the revenue it needed to operate by as much as $650 million and warned consumers could be forced to pay prices that are higher than they should be for imported products because the private operator has run the port in a way that is not consistent with prudent or efficient service provision.

It is extraordinary that just recently we had the Minister for Transport Infrastructure out there, without a hint of irony, complaining loudly that a private operator of Melbourne Airport was blocking airport rail.

You would have thought that that might have just provided a hint – a bit of a hint – as to why handing over massively important strategic assets and services to private companies for decades would be problematic.

But this government is going full steam ahead, potentially privatising every single government agency in Victoria.

Is this because of financial management – getting the billions of dollars up-front?

Again, no, it means that the government’s financial position is worse off, because once the asset goes into private hands, the revenue and the dividend no longer go to government.

On top of that, we have got the increasingly large subsidies the government and the public pay to private operators.

This is what makes these sorts of privatisations bad financial deals all round.

Is it about the private company taking the risk while the community gets the benefit?

Well, in fact, the reverse is true. Whether it is an essential service or a major infrastructure project, it is always the government that bears the risk.

It is always the public that is on the hook if things go wrong, and private companies know this.

Just look at what happened with the public–private partnership under the West Gate Tunnel or the North East Link, where the government is taking over the tolling before it sells it off because the private companies will not bear the risk that the traffic modelling just does not stack up.

We are told that under PPPs risk will now be shared.

Well, if that is the case, why on earth are we continuing on with these generous availability payments that are far more expensive than taking on extra debt?

Look what happened when the public transport operator walked away. The same thing would happen if a private company walked away from VicRoads or births, deaths and marriages or whatever agency the government wants to privatise.

It is always the public that takes the risk while the profits are privatised.

Is it because this government believes that private companies run essential services better than government?

We have heard this from Labor before.

They have said that the state is a terrible housing manager to justify their public housing policies.

We heard the Premier say it was common sense to have private services involved in running government across a wide range of government areas.

What an extraordinary right-wing ideological position to take.

If they genuinely believe that, I tell you what, Margaret Thatcher and Milton Friedman I am sure could not agree more.

I was quite bemused actually when I read a recent article that mentioned that privatisation was once an article of faith for Labor, as if this was some sort of recent thing.

Well, I can tell you that was a very, very long time ago.

That ship sailed the best part of 30 years ago. Labor is now well and truly a pro-privatisation party.

The debate now between the Labor and Liberal parties is not whether or not to privatise but rather how to privatise public services: should the asset be sold, or should it be leased for decades?

These are two wings on the same plane when it comes to privatisation, and it is only the Greens who are standing up against privatisation.

It is only the Greens who are on the side of public services being run in the public interest for the public good.

Labor understands the politics of privatisation. They know it is unpopular.

I have heard them rail against energy privatisation. They had the former Premier out there with the SEC logo on his hat and on his clothes.

Well, that promise was not going to be the old SEC, which controlled and owned all the energy generation it had.

Suddenly it shrank to a 51 per cent share in them. Then they realised, no, the private investors were not going to cop that.

Now they have shrunk it to around a third of the project that they are investing in.

We have heard that they also claim that just because they are not selling assets, they are only leasing them, it is not privatisation.

It is a joint venture or it is asset recycling or it is the ground lease model – all these new terms they have come up with for what is part and parcel privatisation.

Private companies running, operating, leasing and profiting from public assets and public services is privatisation every step of the way, and from economists to workers, everyone knows it.

If you honestly think that is not the case, well, you are drinking the Kool Aid, and if you stand up in this place and actually say that it is not privatisation, you are mixing the Kool Aid as well.

Just to give you an idea of where Labor’s ideology now sits when it comes to privatisation, I will take you back to 30 years ago.

Yes, they had already started privatisations at the state and federal level, but when Kennett got in, there was a flicker of hope.

There was a rush by the Kennett government to rush through the State Owned Enterprises Act 1992, which would give the government unfettered powers to privatise public assets.

Labor railed against the bill. The shadow minister called it a disgraceful example of Parliament being asked to surrender its position as the custodian of state-owned assets.

They went on in that debate to list a number of bodies that potentially could be privatised under the bill, one of which was the port of Melbourne. Does that sound familiar?

Another one of them was the roads corporation, aka VicRoads.

Now some decades later, not only did this government privatise the port of Melbourne, but they threatened to use the provisions in that very act to bypass Parliament if Parliament did not vote in favour of privatising the port.

Then of course later on they did privatise VicRoads, the roads corporation, something that they warned about in 1992, but it came to fruition under a Victorian Labor government.

Labor has well and truly adopted and is implementing the neoliberal economic policies of the Liberal Party. It is well and truly a neoliberal pro-privatisation party.

Just look at their treatment of public housing estates.

This is a prime example: abandoning the principle that it is the government’s job to provide housing for people, underfunding existing public housing estates from basic maintenance upgrades to security, claiming then that the only way to actually fix the problem is to privatise estates, and then to cap it all off an edict from the top, from the Premier, that all estates had to be demolished, a gift to the property industry.

There are clear alternatives to this. We could be retaining, reinvesting in and renewing the estates without the need to displace communities – not some sort of convoluted privatisation deal but actual direct investment in public housing.

This extraordinary far-reaching right-wing privatisation agenda will impact the lives of Victorians for generations to come.

Every time someone in a public housing estate pays the rent; every time you need a birth certificate, death certificate or marriage certificate; every time you catch a train or tram; every time you drive on a toll road; every time you pay your car rego; every time you need to register a property or search for property information; and every time there is a need for maintenance at a school, a hospital or on a road a private company is extracting profit.

When the government needs policy advice, when someone enters the justice system or when a ship comes into port, a private company is extracting a profit.

When there is excess public land, it is being sold on the private market, not being used for public housing.

The government even tried to sell off parts of Federation Square. Nothing is sacred under this government.

There is an alternative: a government with strong public services it invests in, not privatises, that keeps its natural monopolies in public hands, runs them for the public good and invests in them to make them better.

The Greens are the only party standing on the side of people, the only party to stand against privatisation – corporate profiteering from people’s daily lives and essential government services – and stand for public services being run in the public interest and for the public good.

It is time to turn the page on the error of neoliberalism and end Labor and the Liberals’ privatisation agenda once and for all.

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