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Privatise and make government honest

By David Leyonhjelm - posted Tuesday, 31 March 2015


It seems the more successful a policy the less popular it is.

After the stagnant years of Malcolm Fraser's Prime Ministership, successive governments abandoned protectionist industry policy, cut tax rates for companies and salary earners, deregulated industrial relations, increased skilled migration and privatised government-run businesses. Each of these policies lifted the standard of living of great swathes of the Australian population.

But reversing each of these policies is political gold, and defending and continuing such policies is political suicide. Take, for example, the privatisation of government-run businesses.

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Privatisation makes good sense from every possible angle.

Government-run businesses are never run as well as private businesses. Private sector bosses and staff typically have a keener interest in the business's profitability, as their remuneration and continued employment depend on it. And supervision by shareholders and a board is more focussed and rigorous than supervision by voters and a Minister.

Government‑run businesses put taxpayers at risk. Even if they receive no ongoing government funding and pay taxes and dividends like other businesses, government‑run businesses can still borrow irresponsibly, run down the value of taxpayer-funded assets, and ask for a bail out when the business turns sour.

And government-run businesses distract the government from its core role. Ministers that regulate a market are conflicted if a government-run business is a player in that market. And the time and attention that Ministers devote to supervising government-run businesses would be better spent on core government functions like formulating policies and keeping us safe.

Privatisation is not just good economics. It's good for the community.

For instance, the Liberal Democrats and its sister party in the NSW election, the Outdoor Recreation Party, believe national parks should be sold off or gifted to community groups who will actively manage them to promote native flora and fauna and open them up so we can all enjoy the great outdoors. Such privatisation would probably generate little revenue, but the community benefits would be enormous, particularly given that current government 'management' of national parks consists of locking the gate and letting feral animals and pests run wild.

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Selling government-run businesses also helps those who don't care for the business. For instance, a majority of Australians never watch or listen to the ABC, so selling it and stopping government funding would benefit them. Then there are those who hate the ABC. They find it galling to be shareholders of a company who are barred from selling their shares.

The government-subsidised, ad-free ABC is responsible for hollowing out the rest of the news industry. Every day, thousands of Australians scan the headlines on the home pages of the SMH, the AFR or the Australian, then jump to the ABC site to read more about a story of interest without paying a subscription fee. The ABC is also a publisher of books, magazines, DVDs and music, has a string of retail outlets, and of course has an array of TV and radio stations. When it comes to explaining why each of these markets is struggling, the ABC is the elephant in the room.

Much of the recent debate about privatisation has revolved around the leasing of NSW-government-owned electricity assets to fund spending on things like roads. The Outdoor Recreation Party supports this, because you can't enjoy the great outdoors if you're stuck in traffic.

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This article was first published by the Australian Financial Review.



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About the Author

David Leyonhjelm is the Liberal Democrat Senator for NSW.

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