The Forum > Article Comments > Privatising Australia's water > Comments
Privatising Australia's water : Comments
By Selwyn Johnston, published 9/2/2006The sale of water assets though privatisation is very tempting for Australian state treasurers.
- Pages:
-
- 1
- Page 2
- 3
- 4
- 5
-
- All
1. Privatisation is coming, whether we like it or not;
2. Water quality must be regulated (so that none of us need to take any responsibility for our own welfare);
3. The government must do the regulating (because we all trust the government implicitly);
4. Because the industry must be regulated, we can’t have competition;
5. That only leaves a monopolist, who must be heavily regulated to make sure they don’t gouge consumers and poison us.
Why all the focus on government control and regulation - what’s wrong with opening the market to anyone who wishes to compete, and letting competition regulate quality and prices?
Scaremongering about water quality to support an argument for one or two heavily regulated monopolist suppliers is ridiculous. People are not entirely stupid, and they don’t drop like flies in countries where there is little regulation of water quality. In an open market with many suppliers, those who start supplying poor quality products don't last very long. Word spreads very quickly among customers, who then switch to another supplier, or at least won’t be prepared to pay as much. We should remember that consumers had no such choice in Sydney a few years ago, when virtually the entire city’s water supply became contaminated.
In economic terms, water is a scarce resource. Controlling scarce resources by central planning and decree is feudal. Allocating them through a free market is not only fairer and more efficient, but also mitigates against shortages, and requires minimal regulation - essentially only rules to prevent stealing and deception. Were such a competitive water market operating in Sydney, I’m quite sure we wouldn’t now be forced to wash our cars by hand, or see our gardens die off through lack of water.