Privatisation, Corporatisation and the Role of Government

Local news broadcasters in Western Australia today were running stories about the issue of Gas Supply. The perthnow news site was headlined "WA gas prices three times higher than in the east". The Australian news site headlined the story "WA gas cheap by global standards". The ABC News site headlined it "Low gas price won't hurt economy: forecaster". And Gas Today Australia magazine headlined it "WA gas crisis?"

Reading the detail of each story was not really illuminating. It seems to me that one's view in the matter was entirely dependent on which vested interest you were supportive of.

What is unavoidable is the reality that for domestic consumers in WA gas, electricity and water prices have all escalated quite dramatically over the past two years, and some commentators suggest that more rises are still in the offing. The reason for these rises is that since the providers of these utilities have been privatised or corporatised they have had to charge prices that enable them to make a profit for shareholders.

This, in my view, is an extraordinary situation for us to be in because I can remember when the pressure was being applied within the political processes that led to the selling off of our Gas services and the segregation of our electricity supply, generation and network services into three separate companies, we were assured that consumers would be the beneficiaries of the competition that would be possible in a privatised market for these services. The reality of our experience seems at odds with this claim.

There seems to have been a view around over the past few decades that if the private sector thinks it can make a buck out of something the government usually does, then it should be allowed to have a go. As a result we have outsourced, corporatised, and privatised more and more services that were previous only provided by the government. This new direction was born on the myth that government-provided services were intrinsically inefficient and tax-payers should be allowed to get better value for their money.

Examples of privatisation delivering cheaper services to consumers are few and far between, but what Governments have liked about these strategies is that they are no longer responsible when things go wrong. They can bleat and carp at the new entity just like consumers but they can't be blamed. (The most extreme example I can think of in this line is the way the Government was able to duck for cover over the death of Mr Ward, the aboriginal man who died of heat stroke while being transported in an un-airconditioned van on a 40 degree day in the outback.)

I have always held the view that there are certain essential services that we, as citizens, should have delivered to our dwellings in a manner that is free from the pressures of commercial gain. Water-supply and sewerage makes sense. Roads and pathways are taken for granted. Reticulated Gas and Electricity are vital for public health and well-being. I would also argue that the network for telephone and high-speed broadband fit into this category these days because the government, not a profit-driven company, is best place to meet the universal access obligations that have applied for telephony for generations. Who we get to send services down the fibres is another matter, just as we can choose whose services we use for transportation of goods and services on our roads.

We live in a great state with an abundance of resources to provide all these services. It makes me mad when I hear politicians ducking their responsibilities in this area with false arguments about the benefits of having the private sectgor provide these services.

What do you think?