In some instances it makes sense where the service being delivered is specialist and/or not capital intensive. Sadly most of the privatisations are not in that category...
There is an old saying that I heard over 30 years ago now that holds true here - "Privatise profit and socialise costs".
Amen... very well put. Governments have a phobia at borrowing (debt bad! unless Govt is urging households to spend! spend! spend! in which case debt good!) which makes little sense when they can leverage their sovereign credit rating. Another old saying... what’s the point of an AAA credit rating if you never use it?
I don’t have an issue where genuinely contestable services are “privatised” (which is the wrong word, but it’s so ingrained no point fighting it...). An example was the Government Printing Office. A genuinely contestable service that is not central to social function, so a good argument can be made that the government didn’t need its own printer.
But airports, roads, social services... land titles offices... not so much. Look at the profitability of Sydney Airport - can anyone say with a straight face that the consumer is now better off? What about the litany of dodgy commerical training and employment services providers that have done little except rip off the taxpayer before going bust?
And the real problem with governments “privatising” non-contestable services is that they have demonstrated time and time again they are truly appalling commercial negotiators. They have no clue, and get totally reamed by the experienced commercial negotiators in the huge listed companies they are dealing with.
Governments go to water when these companies bluff their risk profiles and so they agree to all sorts of terms and conditions that are close to immoral. Toll roads for example... 4% or CPI indexation, whichever is
higher? Seriously? Where is the sharing of risk there? Free money straight from consumers to the owner. Constraints on permitting competing transport options during the term of the contract? Disgraceful... the ACCC should be all over that.
Part of this is due to the hollowing-out of public sector expertise because of... you guessed it, perceptions that public sector expertise is lazy, inefficient, and not worth the money. We all lose in the end.
If I was on the government side of the table, I would say “here are the costs, terms and conditions of this deal which would deliver this service or bit of infrastructure at the same or better quality and at the same or lower cost than we can. If you don’t like it or don’t think you can meet those Ts & Cs, then we’ll do it ourselves.”