I was always a reluctant believer in the conventional wisdom of privatising everything that wasn’t nailed down, and much that wasn’t. Some services really should be provided by governments, I thought, especially in cases where:
- There is a natural monopoly.
- Access should not be restricted by ability to pay.
- Private control may confer disproportionate power.
I deplored the rush to privatise utilities, transport infrastructure and a mind-boggling range of government activities including even prisons and aspects of the military.
The stupidest example to come to my attention recently was the South Australian Land Titles Office in my home state of South Australia. Did the cash-hungry Labour government never pause to wonder why a consortium comprising a commercial bank and a foreign pension fund would be willing to part with A$1.6 billion for the right to run the LTO for 40 years?
Anyway, I have just read a concise and well-documented article by Ross Gittings, economics columnist with Fairfax Media, entitled ‘The Experts Told Us Not To Worry’. I recommend it – if you can find a way to read it without subscribing to the Sydney Morning Herald. He chiefly blames state governments and their supposedly expert advisors, who little dreamt of the depths to which private investors would sink in the pursuit of monopoly profits, or the enormity of the loopholes in the regulatory frameworks conscientiously erected in a vain effort to protect consumers.
Do you have a favourite privatisation horror story to share?