Graham you appear to forget that without public service membership, unions almost cease to exist. The main reason to resist privatisation could be considered a membership drive.

Rhrosty, & hound, how about Telecom, 3 times the business, with about 45% of the staff, & much cheaper calls. Railways the same. Privatisation can work.

Foyle, I agree selling the CBA was a bad mistake, as was the Government Insurance Office in QLD, however getting rid of railways, Qantas & Telecom were a good idea. As for doing what Norway is doing, if you will just find us a huge oil field, [& sit on the greenies], I'm sure Tony as distinct from Labor, would oblige.

Halduell if the only way to get, & support a middle class is to subsidise it with tax payer dollars, I'll do without one thanks. In fact, the sooner all our universities are sold, the better, they are one middle class bastion of tax waste, we could well do without.

Armchair Critic of course government run Telecom never had a profit of 4.3 billion. It was run by plodding public servant types, with a feather beaded union workforce 4 times that required. No government in our history, except perhaps old Joh could have made it profitable. Remember when he chucked the electrical linesmen out?

Sorry mac, but I disagree. Privatisation is just about the only way of closing down the empires of useless bureaucrats, all government seen to build. With out it, like Grease, we will all be on the government payroll, & none of us working much at all

I don't have an opinion on the broader pros and cons of privatisation verses public ownership however, in the case of Medibank Private I am a bit baffled.

I was of the understanding the members of the fund where the owners in partnership with the government, and the current share offer would be invalid given those buying the shares already own them, being the Fund is a public asset (owned by all tax payers and the govt).

Or am I wrong?

Hello Hasbeen,
Thanks for your response.
I just wanted to reply to your comment to reinforce the point I made earlier.
You said "Of course government run Telecom never had a profit of 4.3 billion. It was run by plodding public servant types, with a feather beaded union workforce 4 times that required..."

This in itself is EXACTLY my point, and completely highlights the problem.
If I owned a small business and it went bust within 12 months would anyone seriously think I had the competence to be state or federal treasurer?
If government doesn't have the skills to manage a business, then what hope do we have that they can run a country? - None.

How much money would the country save if we applied that methodology to all the rest of the state own assets?
We'd be in surplus year upon year with money in the bank earning billions in interest instead of paying it.
Its not hard to understand and we don't need millions spent outsourcing to independent reviews to figure it out and state the obvious.
- Spending money on ads to remind us were all in debt - What's the point of that?
I'd rather see an ad that says "The fact that we spent 8ml dollars of your money on this advertising campaign to remind you of how much debt we put you in only proves how inept we are at running the country." At least we'd have some honesty.
And they throw money away on things like plays called "Kill the Climate Deniers"

What interest on 667bn? -That's 667 Thousand Million, Right?
How much does that take away from healthcare, infrastructure and communities?
The bottom line is that in a space of 15yrs, bad monetary policy has virtually destroyed our kid's futures.

I simply cant see any way to pay back that debt, not matter how much anyone tries to play it down by comparing it as a percentage of GDP.

And can anyone list all state owned assets Australia-wide that have been sold and just exactly how much money has been squandered?

So Graham when we've sold off every asset, does the Govt then take our houses to pay for the debt ?

They should never have sold off the Commonwealth Bank. At least it was creating some money debt free for infrastructure.

Without a middle class we will have a very thin layer of the wealthy sitting precariously on a very large layer of the impoverished.
Homelessness will balloon.
So will ignorance.
Selling off the universities will blow the cost of a higher education out the window. This will result in an undereducated population, which when coupled with lower wages, emasculated unions and general uncertainty as to what in this life comes next, will require a militarized police to enforce the guaranteed discontent.
How many people in Detroit now go without water because they can no longer afford to buy it? The American Way - do we really want to go there?

Armchair Critic, Hasbeen and others,
You all need to get some knowledge of the fiscal space available to a currency issuing government before you comment on macroeconomics.

A fiscal space diagram has a Budget Balance (BB) axis running across the middle of a graph page with a surplus result plotted to the right of the central vertical Current Account axis. A positive current account balance is plotted above the horizontal BB axis.

The two values (CA and BB outcomes) allow a single point to be plotted showing the outcome for the financial year. The plots are usually figures that are a percentage of GNP.

A 45 degree line is drawn from the bottom LH corner of the chart, through the (0,0) point to the top RH corner. This line represent when the private sector is in balance. The plot of the CA and BB outcomes indicates whether the private sector had a sustainable outcome for that year. The private sector cannot continually borrow. It will run out of credit-worthy borrowers, hence liar's loans.

If the result is to the left of the sloping line the government has allowed the economy to operate in an unstable area. The most desirable operating space is to the right of the sloping line close to the (0,0) centre.

I have the CA and BB data for about sixty years to 2011. The best performance of any Federal Government was the brief period of the Whitlam Government. Fraser, probably with his foot on his treasurer's neck, was not too far wrong but Howard's was by far the worst performance.

If the Current Account of a currency issuing government is in deficit then the only way the financial wealth (not asset value wealth) of the private sector can increase, is for the sovereign government to run a deficit larger that the CA deficit.

This is not some weird economic theory. It is nothing more than the outcome of one of the the rules of accounting. For every entity that owes money (has a liability) there is another entity that has that debt as an asset.