To Sell or Not to Sell?

I don’t know if any of you know this, but it costs a lot of money to run a country. I mean a whole lot.

In 2009 the Australian government plans on allocating $1.5 billion to increase the Army size. It plans on spending $2.3 billion in rebuilding roads and infrastructure. For this financial year the government is going to give $248 to each family that meets the Large Family Supplement requirements of three children or more.

Can you imagine how many families meet that criterion, or for that matter, do you even know what a billion dollars looks like? I know I don’t.

Of course, all of this costly nation-running comes at a price—to us. I don’t know a man or woman who hasn’t looked down at his or her paycheck and breathed a sigh of disappointment when they saw how much tax ate away at their final earnings.

In a world where populations are continually rising, and therefore so is the demand for services these populations require, it’s becoming harder and costlier for governments to keep up with the pace. There’s no shame in a government saying, “Look, we can’t handle the job right now; someone else could do it better,” whether that job be building roads, supplying water, or managing the telecommunications system.

I won’t get on my high horse and extol the virtues of capitalism and a free market (you can just read an Ayn Rand book if you want that), but the fact is free markets drive down costs by allowing competition into the marketplace and that’s just plain good for everyone’s pocketbook. If the Australian government ran every aspect of services we use in our daily lives, the costs to us would be enormous. It’s just too much to take on.

In the past ten years under John Howard’s leadership, Australia has become a world leader in privatisation. Everything from Telstra, to Qantas, to detention centres, to educational facilities, to electricity providers has been handed over to private companies. While I generally support any advance towards a more consumer-friendly environment and a free marketplace, such rapid movement towards corporate culture does not come without catches.

In a democratic society the theory is government’s main job is to make sure the people’s well-being is guarded. This doesn’t fit the job description of a corporation. A corporation—and this shouldn’t shock anyone—exists to make money. That’s the bottom line.

The problem is that there are a lot of people that live beyond that bottom line—such as the good country folk who have to pay more money for poor phone service due to Telstra’s privatisation (Critics Against Selling Telstra – see below) or the roughly two-thirds of Australian school children who can’t afford to attend private schools yet must suffer the inadequate funding of the public education system.

And then there’s the dilemma of what exactly should we privatise? What responsibilities should the government absolutely be required to handle? There are countless horror stories of correctional centres hiring security from private companies, only for prisoners to report abuse and conditions that even a prison doesn’t warrant.

Privatisation is not an end-all, be-all answer to the costs of running a nation. A government’s basic job is to ensure the safety of its people, and at times when a once-public service becomes private it can seem like throwing the sheep out to the wolves. In these cases, the only thing that will save us is this word: “accountability”.

If governments are going to pass the buck on to corporations, they must also be willing to hold those same corporations accountable if their business practices become unethical. This can be done in several ways:

1. Regulatory agencies are crucial. Corporations may not always like them, but regulatory agencies that work within reason are essential to making sure business practices are on the up-and-up.
   
2. Governments should make it a habit to research who they are leasing out business to. If a company doesn’t have a history of being socially responsible, or customer welfare is not their priority, then it wouldn’t make sense to trust them to provide services to the public.
   
3. There are some things governments MUST take responsibility for. I argue that public education and security (i.e. prisons, national defence, etc.) warrant full government attention.
   
4. Corporations themselves need to set higher standards of self-accountability and develop a sense of responsibility to the community. Surprisingly, many already do this— but every now and again power can fall into the wrong hands.

In the end, there is no perfect way to run a nation or even afford running a nation. Privatisation is a great way to ease the burden governments carry, but it’s not always the right way. I mean, I like my pockets full as much as the next girl, but that doesn’t mean I want them full at the cost of a society empty of values.

How do I know this?

Barbara Miner. “Australia Battles Privatization: Interview with Angelo Gavrielatos.” ZMagazine Online. 21 January 2007. http://www.zmag.org/content/showarticle.cfm?ItemID=11915. 

Chris Aulich. “Privatization and Outsourcing: The Australian Experience.” http://www.blis.canberra.edu/chinacentre/cn/news_cn/
documents/PrivatizationNanjingo.pdf

Citizens Against Selling Telstra (CAST). “Citizens Against Selling Telstra Submission to the Senate Inquiry into Privatisation of Telstra.” 24 September 2003. http://www.aph.gov.au/senate/committee...

Department of Treasury. “Budget at a Glance: 2006-2007.” http://www.budget.gov.au/2006-2007...

Paul Moyle. “Unsafe Work Practices Lead to Findings of Negligence Against Private Prison Operators: Jarvis v. Australasian Correctional Management Pty. Ltd.” ELAW-Murdoch University Electronic Journal of Law. Vol. 5, Issue 1. March 1998. http://www.murdoch.edu.au/elaw/issues/v5n1/moyle51.html.

Roger Wettenhall. “Privatization in Australia: How Much and What Impacts?” Asia Review of Public Administration. P. 144-159. http://unpan1.un.org/intradoc/groups...

“Privatization.” Wikipedia. http://en.wikipedia.org/wiki/privatization.