In the following paper I argue that there is one very specific kind of privatisation which, under the right circumstances, does provide indisputable benefits for the Australian public. After providing evidence that the economic arguments in favour of privatisation are weak, I distinguish two distinct types of government enterprises - those operating in a competitive environment and those which are natural monopolies. I argue that there is little contemporary support in Australia for the privatisation of natural monopolies. If a government enterprise operating in a competitive market can be sold at the right price, however, and the sale accords with public opinion, then overall utility is enhanced and an indisputable political benefit has been
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Some industries that we naturally think of today as public enterprises, such as utilities, road and rail, began as separate private undertakings which were later combined and nationalised (Sturgess 1996: 63-68). The early twentieth century perhaps marks the high point of the welfare state ideology in western economies including nationalised industries, Keynesian economics and a strong social support network (Hughes 2003: 93). Since then, neo-liberalism has become the hegemonic economic ideology (Braithwaite 2013: 6) and there is general global agreement on both sides of politics that privatisation of government enterprises is beneficial, while nationalisation of private industry is not (Braithwaite 2013: 2). Thus privatisation has been happening all around the world, particularly in the 1990s (King 2005: 1) and became common in Australia from the late 1980s onwards (Abbott and Cohen 2014: 436). Australia has been particularly energetic in the area, privatising at both the state and federal level and more than most other countries. Australia is second only to the UK in terms of total sale value and second only to New Zealand in terms of revenue earned as a percentage of Gross Domestic Product (GDP) through privatisation (Reserve Bank: 8-9). More recently, however, privatisation has slowed in Australia (King 2005: 21) and overall public support is in decline (Mead and Withers 2002: 11). Privatisation has been a contentious and contested issue in recent state elections and may have been a defining issue in toppling at least one government (Ferguson 2015; Sansom
Some industries that we naturally think of today as public enterprises, such as utilities, road and rail, began as separate private undertakings which were later combined and nationalised (Sturgess 1996: 63-68). The early twentieth century perhaps marks the high point of the welfare state ideology in western economies including nationalised industries, Keynesian economics and a strong social support network (Hughes 2003: 93). Since then, neo-liberalism has become the hegemonic economic ideology (Braithwaite 2013: 6) and there is general global agreement on both sides of politics that privatisation of government enterprises is beneficial, while nationalisation of private industry is not (Braithwaite 2013: 2). Thus privatisation has been happening all around the world, particularly in the 1990s (King 2005: 1) and became common in Australia from the late 1980s onwards (Abbott and Cohen 2014: 436). Australia has been particularly energetic in the area, privatising at both the state and federal level and more than most other countries. Australia is second only to the UK in terms of total sale value and second only to New Zealand in terms of revenue earned as a percentage of Gross Domestic Product (GDP) through privatisation (Reserve Bank: 8-9). More recently, however, privatisation has slowed in Australia (King 2005: 21) and overall public support is in decline (Mead and Withers 2002: 11). Privatisation has been a contentious and contested issue in recent state elections and may have been a defining issue in toppling at least one government (Ferguson 2015; Sansom