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Privatisation: Coming to Public Schools and Hospitals Near You

Here is @KayRollison’s latest rant, I mean, post.

Usually it’s nice to be proved right – but not when you’re proved right about something as bad as this. I’ve been saying for some time that an Abbott government would have a much more right wing, neoliberal, or just plain nasty agenda than some people seem to think. And here we are, seeing an example of a right-wing privatisation agenda played out in Queensland for our edification. There is no doubt that this is the same path Abbott would love to take this country down.

One of the reasons sometimes given for the premise that an Abbott government would be essentially inactive is that the right wing agenda of small government has run its course – there’s hardly anything left in government hands to privatise. But anyone who thought that is mistaken. Not only is there Medibank Private and Australia Post, there’s all those services left to outsource, like education, health, and disability.

Abbott and Newman probably didn’t figure out for themselves how to push the boundaries of outsourcing further than asset sales. They didn’t need to – their Conservative mate David Cameron in Britain has been showing them the way. This article in The Guardian describes what is happening there as the creation of a ‘shadow state’; all the real state’s substance is being eaten away by outsourcing of what should be its core functions, in favour of an unaccountable, corporate, copy of a state. ‘The winners are private equity and shareholders. The losers are the low-paid and the vulnerable. And in the end we all pay,’ writes Zoe Williams. Here are some of the issues she raises; I’ve expanded on them a bit.

  • Outsourcing is based on the principle that private provision is always more efficient than public provision. This is an article of neoliberal faith, not an evidence-based assessment. It is rarely true, unless you put the bar of what constitutes ‘efficient’ very low, and forget about ‘effective’ altogether.
  • Efficiency is always defined as doing more with less. Services deal with people, and the only way of doing more with less is to process more of them in less time, or get rid of them altogether off the books. There’s often an incentive system, based on how much you’ve reduced your case load by. In non-efficiency speak, that means dealing less effectively with people’s needs by shorter consultations, being more impersonal, and making the service more regimented and rule bound. And it’s not like there’s competition within a service – the consumer can’t shop around. They’re stuck with the company that’s won the contract.
  • Services must now make a profit – why else would they be attractive to private enterprise? Other than greater ‘efficiency’, the main way to make profit is to cut costs – which in this case means wages. Government employees (in Britain, often local government employees) lose their jobs, and a lucky few of them get re-employed at lower wages with worse working conditions, probably as casuals with no job security.
  • Competition is supposed to push down costs. But Williams explains that contracts are written so that only the largest firms, like Serco, Liberata (love the name) and Capita are able to tender – we’re talking billions here. ‘And when they say competition,’ she writes, ‘what you’re actually left with is four or five – sometimes only three – companies, who barely compete with one another at all but instead operate as an unelected oligarchy.’
  • There’s no accountability. The government is no longer responsible for providing an effective service. The company won’t disclose any information; everything is ‘commercial in confidence’. If things go badly enough wrong, the government may have to break the contract – and pay for the privilege of doing so. So it’s lose/lose for the taxpayer as well as the ‘consumer’ of the service. The failed privatisation of Modbury hospital in SA is an instructive local example.

What Williams describes is an excellent example of the operation of a market society as opposed merely to the market economy we already live in. In a market society, the only human role is as an individual consumer. Getting the services you need becomes your particular responsibility, rather than the responsibility of the state. In Britain they talk about the ‘welfare market’. Says it all, really.

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Privatisation is, of course, already quite advanced in Australia. However most of what has been outsourced so far has actually involved something physical, like buses (Serco here in Adelaide), or water supply. Not much by way of human services has been privatised. Prisons are arguably a human service, and there are already some private ones –Serco again, and GEO Group (a subsidiary of an American company.) The old Commonwealth Employment Service, which was definitely a human service, was privatised by the Howard government. But outsourcing human services is not a road we have generally taken – until now.

The Queensland Commission of Audit, chaired by none other than Peter Costello, has now delivered its final report on ‘ensuring value for money in the delivery of front line services’, which is not very good code for ‘what other government services can we outsource’. Unsurprisingly, it recommends a massive sale of assets including electricity providers Energex and Ergon, and seven government-owned corporations, including the Queensland Investment Corporation, and SunWater. Queensland obviously has some catching up to do; most other states have already sold off such assets. But LNP thinking on privatisation in Queensland goes further – just like the British Conservatives. Over the last few days, we’ve seen press releases announcing that private companies will build and maintain 10 Queensland state schools, that all prisons will likely be privatized (with fewer staff per prisoner) and that the delivery of a range of health services will be through private and not-for-profit health providers and partnerships. (I’m sure it’s just a coincidence that Ramsay Health Care donated $100,000 to the Liberal Party last year.) So you cut the public service, as Premier Newman has done, then say that services can be better delivered by the private sector. This complements the ideological agenda of asset sales, and has the added advantage of undermining the power of the public sector unions and thus the Labor Party. A win all around for the LNP. And all announced after the election.

Abbott shares Newman’s love for privatisation. He’s even copying Queensland’s post-election audit commission. Not much left to privatize? Don’t be deceived. They’ll be eying off all those (by definition) inefficient government services. And it’s hard to unscramble an outsourced omelette. By the time we get another Labor government, the damage to the state and its citizens will have been done.

By Kay Rollison

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  1. mrharmony60

    as usual Victoria, a great post. Seriously scary stuff. Can’t believe that those who’ll be most affected by privatizing govt services are amongst the ones who’ll be lining up with the baseball bats in September…We truly live in an economy now as opposed to a society. It’s such a shame that only the politically aware in this country grasp the significance of what is unfolding in Qld, and soon to unfold nationally.

  2. Truth Seeker

    Kay and Victoria, excellent post, and what a coincidence, as I wrote my latest post last night “Tony Abbott’s Mini Me” which I posted this morning.
    Basically saying the same things, with Campbell Newman being Abbott’s Mini Me.

    Tony Abbotts Mini Me

    I also made the point that Hockey has already foreshadowed a Costello style audit as one of the first things that they will do if they win government.

    Be afraid people, be very afraid

    Keep up the great work 🙂

    Cheers 😀

  3. Marcus

    One wonders why *any* State or Federal Government in Australia would countenance the adoption of the policies of a nation which has endured double dip recession & the loss of its Triple A credit rating. Didn’t Einstein Say that insanity was doing the same thing, over & over again, but expecting a different outcome?

  4. Ken Brown

    Yes once again another great article from the Kay/Victoria team(?)
    It would be fantastic if articles of this standard and integrity were appearing in and on Australian mainstream media!

  5. halloweenjack1

    Great post Victoria. Not only did Ramsay Health donate $100,000 but Paul Ramsay Holdings through in another cool half mil. Watch him do very well out of the coming fire sale of Qld assets.

  6. Joy Cooper

    Agree totally, Marcus, particularly when the deep slicing “austerity” measures made in the UK were apparently based on a lie. I remember reading recently (somewhere) that there was no such deficit in the UK’s budget that warranted such measures & that they were just political. In fact these so-called “necessary measures” which devastated the poorer people of Britain, were the sole reason for that country’s downgraded credit rating & double dip recession.

    Tony Abbott goes every year to sit at the feet of David Cameron, George Osborne & William Hague to immerse himself in their pearls of wisdom which is much to our disadvantage. This country isn’t broke in any way shape or form & to hear such austerity measures being claimed to be essential is really scary. The LNP will break us.

  7. Joy Cooper

    Apologies, Kay, great article. People have forgotten how much of that which was in public ownership was privatised by Howard.

    The CES in particular, sold off to the highest bidders by Howard, has become a true cash cow for the private providers when they were granted the rights to retrain & obtain employment for the unemployed. These providers really need full scrutiny as they aren’t value for money. The same will happen to all government services which will be privatised. Private does not lead to more efficiencies or better services just more money in the pockets of those that own them.

  8. Tom of Melbourne

    Victoria said “”Over the last few days, we’ve seen press releases announcing that private companies will build and maintain 10 Queensland state schools

    Perhaps someone might explain why the government has to own the real estate that is used to teach children.

    For example, with changing demographics and the redevelopment of inner city industrial suburbs into residential housing, is the government supposed to own a slab of the high priced real estate to provide a school for the kids in the area?

    If “the left” thinks that leasing space for schools is the thin end of the wedge, then “the left” has clearly lost the plot.

  9. Tom of Melbourne

    Try again…

    Victoria said- ‘Over the last few days, we’ve seen press releases announcing that private companies will build and maintain 10 Queensland state schools’

    With the redevelopment of previous industrial suburbs into modern, high density residential areas, is the government required by ‘the left’ to own a slab of high priced real estate in order to educate children?

    If ‘the left’ thinks owning the real estate schools sit on, is necessary to provide education, it has genuinely lost the plot.

  10. Kay Dee

    How on earth does Costello have any financial credibility at all? A treasurer who presided over boom times and gave none back to the people, sold off government assets to make a surplus and lost five billion (5,000,000,000) dollars of taxpayer money in poorly thought out investments, plus did a fire sale of our gold bullion just before the price went through the roof. When will the real story be told? Great article Kay Rollison.

  11. GB

    Indeed, Tom. Honestly, ‘the left’, always ‘requiring’ something. And for the provision of education why do we even need governments employing teachers at all? You’re on to something! The more I think about it, your idea could be extended to so many areas …

  12. GB

    Thanks for the cheap deal on the land mate. Those sports fields though? We’re going to subdivide, bung up an estate. The brochure will look good – there’s a school right next door!

  13. lmrh5

    Reblogged this on lmrh5.

  14. Rob

    And selling TAFE colleges in Queensland, sacking teachers across Australia, whilst the cost of courses for students inceases.

  15. Bob Lloyd

    And don’t forget Abbott will sell the NBN to his boss Rupert because Rupert doesn’t like any competition to his businesses.

  16. Bob Lloyd

    Yes Denise, “Don’t think of an Elephant” is an enlightening read. Will have to dip into it again.

  17. denniallen

    “Dont think of an Elephant” by George Lakoff…Google books $6+ …read online…short but great read…tells you everything Tories around the world are up to!

  18. Tom of Melbourne

    I see, “privatisation” apparently now means off loading some chain dragging public servants.

    I thought that was “contestability” which has been recommended by the productivity commission under AL and Liberal governments for a decade+

  19. johnlord2013

    Very thoughtful and constructive. An Abbott led government is a frightening proposition.

  20. Joy Cooper

    Yes it is John. What really irks me is that Coalition governments act as if public assets are theirs to sell off as they choose. These aren’t “theirs”, they belong to the people.

    As for claiming they are just “paying off debt” from a “wasteful” Labor government that is sheer nonsense. It was “wasteful” Labor governments that built assets for Noalition governments to flog off. No government that is doing its job properly should be running a surplus. That means taxpayers are paying too much tax or services, that should be, aren’t being delivered.

    Do hope that all conservative voters are well off financially, as they will certainly need to be if the Costello & IPA nirvana of privatisation, they lust after, comes to fruition. .

  21. Buff McMenis

    This is what the Main-stream Media should be front-paging with vengeance! Istead of this they are supporting the LNP and Abbott, a proved liar and inefficient LOTO! IT IS WRONG! We MUST get some way for the lowest common denominator population to see this!!!

  22. Pingback: Interesting Conflicts of Interest | The Australian Independent Media Network

  23. Stew

    Excellent article my thinking exactly on this.

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