A critique for Crikey's Christian Kerr

Christian Kerr’s lazy dismissal of Acacia Rose’s opposition to privatising the Snowy River (Crikey May 30, 2006) smacks of blind faith and economic ideology. Without evidence, he simply asserts that privatisation does it better.

He states that government owned and funded infrastructure is an outmoded concept (sooo last century!) and that opposition to privatisation must be green inspired xenophobia. Please explain? Since when did not wanting to sell your nation’s natural heritage to foreign investors become xenophobia? It is revealing that Christian only sees privatisation of the Snowy River as being about delivering services. What about the ecologically sustainable management and preservation of the Snowy River? And since when has the value of natural heritage and iconic status been meaningless (unless viewed only through the rosy prism of economic dogma)?

Enthusiasts of privatisation seem to regard public ownership as an affront to economics, depriving astute middlemen and spin-doctors of their right to take a cut of the action. To keep shareholders happy, privatised infrastructure has to perform at least 10-15% more efficiently than public infrastructure just to maintain the status quo. If the public infrastructure is already run efficiently then the profit margin must come from less efficient service or by running down capital assets (presumably to be rectified with government handouts a decade or two down the track). In the case of the Snowy River, we are also risking the already fragile health of a major ecosystem. Poorly managed, a privatised Snowy will have long term and irreversible consequences paid for by the nation as a whole for generations to come.

How does putting an entire river in private hands benefit the nation? Regulation to limit foreign ownership will be changed by a future government with the numbers and desire to do so. Regulating a major river system owned by several corporations with competing interests is not a recipe for efficiency or effectiveness. If the government has to be the regulator it may as well be the owner.

Rather than serving up glib assertions of an increasingly discredited economic ideology would Christian please provide even one example where water privatisation has resulted in a better long-term outcome for the common good and wealth of a nation? Privatisation vaporises expensive public assets into short term profits for shareholders and consultants rather than creating true investment and economic growth.

For a rigorous and insightful analysis of the state of free market globalism, may I suggest Christian have a good read of Ralston Saul’s The Collapse of Globalism: And the Reinvention of the World. Only an unreconstructed ideologue could fail to reflect on Saul’s informed and thoroughly researched erudition.