Is it a sin to sell a government asset?

An even greater political issue is that the funds raised by the Telstra sale were used to pay-off government debt, but this benefit has now been lost with the current debt being currently higher than the debt that Howard paid off. Stated in blunt financial terms, the Telstra sale provided the nation with no cash benefit.

The passion about asset sales has grown to a dramatic high in more recent times.

Firstly, a proposal to sell some Energy assets in New South Wales caused the demise of NSW ALP Premier, Morris Iemma, but this was more a political power struggle within the ALP than a fight over the righteousness of asset sales.

Morris Iemma failed to count his numbers before he moved to implement the sale, and his political enemies proved to be real good counters. However, Victorian Premier Jeff Kennett ran into very few problems when he sold assets, but he did lose the next election. This was not because of asset sales, rather more due to his strong impression of arrogance that voters disliked.

Then, Premier Anna Bligh was badly beaten in the Queensland State Elections of 2012, and many commentators said it was because she sold a majority stake in Queensland Rail. I doubt that.

The ALP had been in power far too long and had grown tired, so the voters went for change, particularly as there were some political scandals around as well.

But, let’s look more closely at the QR controversy.

This historic entity had been operating for 150 years and had lost money every year, costing taxpayers countless millions of dollars. It also had a record of poor service to its customers, irrespective of whether they were passengers or movers of freight. It badly needed a management revolution.

Anna Bligh achieved the sale by dividing it into two entities. The first is now a successful and profitable public company, Aurizon, which carries minerals and other bulk freight nationally and is providing its shareholders with dividends and capital gains. Anna Bligh deserves credit for its profitable launch.

The second, which retains the name Queensland Rail, runs Brisbane’s metropolitan rail system, plus the country rail tracks that were not passed over to Aurizon. It remains under government control and is not yet profitable. The end result is that the proceeds of the sale of Aurizon through an IPO on the ASX has still not solved the huge debt problems that the Newman Government inherited from Anna Bligh.

Campbell Newman is now considering more assets sales after he gains a mandate to do so at the next election. In the meantime, the O’Farrell Government in NSW is proceeding with sales of some of its assets, as it is not restricted by the mandate issue. Other states will move in a similar direction, particularly the Federal Government in Canberra — no matter who wins the September Election.

Few can see any benefit in the Australian Rail Track Corporation remaining in government hands, as it is a commercial enterprise.