Is it a sin to sell a government asset?

So what will be the voter reaction?

My feeling is that it will be hostile if the funds are used to repay debt. It will be positive if the funds are used to build new infrastructure or create new services. The key is that voters know that the running-down of debt by one government is an open invitation to the next government to run it up again. Nothing is achieved except the loss of an asset.

It is also a fact that Superannuation Funds are willing to buy existing assets from governments and make them more efficient and profitable. But, they won’t risk funds on greenfield projects that take years to become cash flow positive.

So, the key is to start a perpetual investment turnover program with those Funds — sell them an asset, use the funds to create a new one and then, when it is earning revenue, sell it to them and build yet another one. The voters will get enthusiastic about this, as their government will always own assets.

So, what would I do in the totally unlikely event that I was in government. I would sell every asset on the books, including schools and hospitals, and use the funds immediately to build new ones. This is an urgent task as Australia is decades behind in meeting the nation’s basic infrastructure needs.

The key issue for voters to remember is that, because a government owns an asset, it does not mean that this asset automatically provides a good public service. Many bureaucrats have no greater sense of service to the people than private entrepreneurs do.

The key factor in selling a government asset or service is to pass legislation that covers the conditions of the sale and sets-out levels of service to be provided. Failure to adhere to this must mean that heavy penalties are payable, including, in the final analysis, the terms on which the assets must be returned to government.

One idealistic hope is that, in many cases, not-for-profit corporations can be established to buy and operate assets. In the case of ownership by Superannuation Funds, a plus will be the financial benefit to millions of ordinary Australians who are their members.