What lot of rubbish Alan, the true facts are that it is only you and the elitists that beleive deregulation and privatisation are benefitial to the people of this country.

Just look around and see where this has led, higher prices, huge money hungry sleazy monopolies, lower services and lower full time employment within those industries, if they still exist. The only ones to benefit are the rich and the Beaurucratic elite. Our country is about to collapse whilst people like you spruik nonsense about things inmroving because we deregulated. Look at our primary industries, our manufacturing industries since deregulation, collapsed. You elitists rave about low unemployment, but you don't say what is the truth, you speak in riddles and hide the truth.

In the last 10 years, we have lost huge amounts of full time jobs and only got back part time jobs that only benefit the elite rich. MOst of these jobs provide less than 20 hours a week, yet you say that these people are employed. I bet your hours haven't dropped, nor your take home pay, I bet you have had large increases as well as huge tax cuts and the ability to claim just about everything as a tax deduction.

Ordinary people don't have those perks, you beleive that they are there solely to provide for people like you, whilst the average person struggles to survive.

Get real, remove the blinkers that form your life and stop trying to feed us with such ridiculous fallacies, you and you ilk are as bad as the relgious, just a bit more sinister. Provide one example of benefit to the people of Australia that they have recieved from deregulation and privatisation

Deregulation and privatisation only shrinks competition, not enhances it, the facts are there. But I forget, the elite only see themselves as being capable of thinking, but the facts say it is the other way round. The elite of the world have always been slaves to stupidity, thats why infrastructure is collapsing throughout our country.

Part of the problem stems from 'corporatisation' whereby the government is a shareholder rather than running the utility as part of a service. Maybe that does create a conflict of interest. So, it's better for government to assume total responsibility for the service on behalf of those who elect them than have an unelected elite use utilities as a slush fund.

Notice I used the word 'service'. Telstra, for example, should be a service provided to the Australian electorate. Not a trough for rich mates of Howard and Co to get their greedy snouts into. But of course if Telstra or Energy Australia was totally privatised then shareholders funds would be siphoned off to pay millions for CEOs. In addition, more workers would be made redundant and as a result services would be reduced. But hey, the CEO would get a fabulous multi-million dollar payout on retirement.

The IPA are so transparent. It'd be interesting to see where Alan Moran is forwarding his CV. Does he know anything about electricity?

The privatised Victorian electricity industry appears, from this piece, to have simultaneously been stripped of profitability and to have outperformed its rivals. So what on earth constitutes underperformance?

The "Alchemist" has a well chosen name as someone who would substitute magic and fantasy for logic. Surely nobody thinks the economy has not prospered mightily over the past decade and few would deny a role for privatisation and deregulation in this process.

I don't have the luxury of claiming vast tax deductions but am flattered to be called a member of the elite.

Solving the problem of corporatisation by leaving the integrated monopolies in place, as suggested by "DavidJS" would, of course, leave us with the same inefficient and moribund government owned entities that we started the 1990s with.

For the benefit of "anomie", underperformance would be characterised by higher prices and lower performance or a mix of the two. As evidenced by the Victorian Essential Services Commission and by factual industry data on price and performance this has not been the outcome of the energy reforms.

Alan Moran

Moribund and inefficient?! Medicare, a government run health insurance fund is way more efficient than other funds in terms of serving consumers. Medicare and the HIC have far less overheads than private health insurance companies who have to pay CEOs excessive salaries and other administrative costs. If you look at the comparison between the US with its predominantly private health insurance system and Australia with its mainly public run system, you'll see that the former system costs the US economy far more compared with the Australian system. In fact, the US system leaves over 40 million without health insurance. Great private system, eh Alan?! And In NSW, STA bus services have always delivered a better service, especially to low-income earners, than private bus companies.

But what are we talking about in terms of "efficiency"? An electricity company that only serves those who can afford excessive charges? I am reminded of the "efficient" Fawlty Towers system of hotel management - okay so long as there are no customers.

Um, Alan, doesn't being stripped of profitability indicate reduced performance? If not, what constitutes perfomance for a public company?

Another apologist for the "capitalism is [without exception] good for you" brigade. It isn't, and never will be.

Alan says "[s]urely nobody thinks the economy has not prospered mightily over the past decade and few would deny a role for privatisation and deregulation in this process."

There was an interesting article in last Friday's Fin Review that analyzed the new-minted wealth Alan speaks of, and where it has been spent. I haven't the article to hand, but I recall noticing that the majority of this additional spending capacity went on housing, health and education - i.e., simply keeping up with the basics of living.

Roads. I'm now paying between $80 and $100 a month for the privilege of driving on roads/and crossing bridges that used to cost me less than a tenth of this figure. That is because the government in its wisdom has allowed private enterprise to dip into my pocket in the name of capitalism, simply to save themselves the bother of building roads.

Telstra. Taxpayers' money built the network over decades, now they sell our assets to a bunch of overpaid do-nothings and pretend its a good deal.

If we follow the UK, rail will be next. Nothing to do with "privatization creates efficiency" - there is nothing wrong with our railways that a good dose of proper management couldn't fix - it is the wanton destruction of the assets that we taxpayers have built up, so that a small band of capitalists can wallow in a trough of our money.

The fundamental, underlying problem in all this is that we have been led by the nose by successive governments, all of whom have a single aim (to be re-elected so that they may continue to be paid by us for ever), and who roll over to have their tummy tickled by any fat cat brandishing a wad of cash and saying "get with it, guys, privatization's the go. Don't be stick-in-the-muds, the electorate will love you for it - its capitalism, democracy, your patriotic duty."

Give us back our infrastructure!

To the barricades!!

Alan, semantic twaddle.

State owned assets and infrastucture operated in the proper way, would bring profits to the people and relax the burden of taxation.

The path you ascribe to puts the payed for assets of the people into the hands of a small minority, meaning that the pittance they pay for the amount the people have put in, will always give them a profit and a continuing loss to us.

Tollways, increased energy charges, bigger bank fee's, lower productivity from the beaurucracy, higher taxes, lower services, catastrophic health system, illiterate education system, collapsing superanuation schemes, lower work benefits and monopolic control.

No need to go on, to the barricades we should go, because if we stick with the fantasy that your ilk envisage, we are all doomed to a monumental collapse of our society and then chaos.

Just a quickie. Alchemist wrote -

"State owned assets and infrastucture operated in the proper way, would bring profits to the people and relax the burden of taxation."

"... operated in the proper way ..." Research I did in 1990 showed that the productivity of Australia's government-owned infrastructure was typically about 40-45 per cent of the industrialised country average. It was not customer-focussed, and was characterised by inefficient manning levels and practices, loss-making capital expenditure and "gold-plating" - providing conditions or equipment levels far in excess of what was required. Only governments can maintain such wasteful activities - businesses faced with competition must operate efficiently or lose market share and ultimately go bust - they have to respond to customers to survive and prosper. In my extensive experience working within government, state governments - which are responsible for most infrastructure - are rarely driven by considerations of public benefit but direct infrastructure spending to help their mates/address problem constituencies etc with little or no regard for public benefit, efficiency and effectiveness. Much government infrastructure spending actually reduces wealth and future incomes because returns are either negative or well below opportunity cost (the return available on alternative uses of the resources). As Alan says, there has been unprecedented growth in productivity and incomes - including for the poorest in our society - (and in government spending) as a result of the reforms undertaken since 1983. Where results are poor, it is generally because governments have ignored good advice. For example, at least 15 years ago most economists across communications issues advocated splitting Telecom/Telstra into an infrastructure provider (which might or might not be government-owned) and a service provider, privatised and exposed to competition.

Faustino, you are simply underlining my point.

"It was not customer-focussed, and was characterised by inefficient manning levels and practices, loss-making capital expenditure and "gold-plating" - providing conditions or equipment levels far in excess of what was required."

None of these has anything to do with "government" per se, it is simply the result of poor management.

As someone said, private businesses do have to respond to customers or go bust. Well over 50 percent of small businesses in a year (it maybe as high as 80 percent) do go bust. But does that mean we should abolish small business per se because of obvious inefficiencies? No, and the same goes for publicly-run enterprises. I said before that STA buses in metropolitan Sydney is more efficient and delivers better services than private operators. Not only that, STA has had to pick up services when companies like Westbus go broke. And that leads me to another major inefficiency of private business. Not only do they do broke regularly, the taxpayer often has to foot the bill. Sometimes it is better to have only publicly-run enterprises in the first place in some industries - passenger transport and electricity are just two examples.

I am not for publicly-run companies in all industries. There is no need for them in retail or agribusiness. But when it comes to essential services I believe there is a role and I'm tired of this reflexive "government bad" ideology coming from some quarters.

And speaking of efficiencies, was efficient to give the outgoing Commonwealth Bank chief such a huge payout? That money could have been put back into services.

Pericles, government-owned enterprises operated the way they did BECAUSE they were government-owned and faced no competition. The main incentives for those running and working in GTEs are to keep the pollies happy, keep your head down and don't rock the boat. That pretty much rules out innovation, identifying and addressing problems and customer focus. I know from bitter experience the fate of those who seek higher standards in the public interest. It's hard to believe how poorly-run governments and GTEs are unless you've been a well-informed insider. The lack of interest in facts, evidence, theory and good practice in other jurisdictions is almost total.

I may not have made my point clearly enough Faustino.

You argue that it is the magic of "competition" that creates efficiency. My point is that any business simply needs an attention to normal management tasks - identifying demand, creating solutions, allocating and managing resources, responding to change etc. etc. in order to become and remain efficient.

The fact that you accurately describe what actually is allowed to happen - "keep the pollies happy, keep your head down and don't rock the boat" - in most cases, does not detract from my argument. The point I am trying to make is that there are other solutions apart from selling the citizenry's assets to commercial enterprise. Management discipline instead of political laissez-faire.

The problem that underpins it all is that the entire system of turning public assets - paid for by generations of taxes - into profit for corporations, is open to corrruption.

Government has no business being in business. Hawke & Keating had the right idea when they started the big government sell-offs and I'm glad to see these sell-offs continuing. At least when you can buy shares in a company (or have your super fund buy them on your behalf) there's some real, genuine public ownership.

Most governments can't even get their trains to run on time - why would anyone think they can run utility companies any better? Government owned enterprises are nothing more than political footballs or weapons. Capitalism is not the answer? Well government ownership of the means of production hasn't exactly been a roaring success.

If at first you don't succeed.

"Most governments can't even get their trains to run on time - why would anyone think they can run utility companies any better?"

That is because they appoint poor managers, allow political posturing to come between the service provision and its clients, confuse making a noise with being useful... being typical politicians, in fact.

My point is that there is fundamentally no difference in the tasks that managers need to perform on a daily basis in order to make a business, or a service, function efficiently. The fact that this does not happen in a politically-driven environment does not invalidate the basic argument. Precisely the same things - train drivers have to drive trains, electricity generators need maintenance, buses need to be scheduled - are essential, regardless of ownership.

One thing that does change with private ownership is that the concept of a public service disappears entirely, and is replaced by the profit motive.

My aged mother in the UK has just seen her bus service - the one that takes her into the nearest town - axed, because there simply aren't enough paying passengers. As she herself says, "there's only ever a couple of us oldies use it". This is the difference between "public transport" and "user pays".

It is ultimately a matter of what we want as a society. Do we actually want public services that are available to all, or do we want a series of commercial enterprises that work for those most able to pay, and benefits only shareholders. It looks as though the profit motive is winning at the moment, but to me that's sad, rather than something to crow about.

Pericles point is a good one because it illustrates how private enterprises can be more efficient than public ones because they can exclude groups of customers through high charges or other means. For instance, private schools can exclude certain students (and maintain good HSC scores) whereas public schools must take all who apply to enrol. Public hospitals have waiting lists which make them look inefficient. But private hospitals are simply too expensive so there are no waiting lists. Is this real efficiency in the wider scheme of things?

On the subject of electricity, it would interesting to see statistics showing how many people die because they can't afford adequate heating. My guess is that deaths are generally higher in countries which have privatised electricity.

Pericles says that governments perform poorly running business “because they appoint poor managers, allow political posturing to come between the service provision and its clients, confuse making a noise with being useful... being typical politicians, in fact.”
Well what’s your point? Of course the jobs are the same if something is privately or publicly owned but you yourself admit that governments aren’t up to the job because they are politically motivated. The governments role is to provide services where private enterprise cannot – whether because of capital expense or insufficient profit. Public transport is probably one of these areas; power and telecommunication services are not. Governments had to take on these responsibilities initially simply because private enterprise could not fund the infrastructure. This is no longer the case. Get out of the way and let that which has taken us from the Stone Age to the Information Age run the show; that being the profit motive.

Apart from the pursuit of profit, (which some people seem to regard as being in bad-taste), private enterprise is also motivated by a sense of professionalism, competition, and a need to please the consumer from a hip-pocket and service point of view. None of these are motivations for public entities. The government has the luxury of shifting blame, the luxury of time to “look into the matter” or appoint useless committees so they appear to be taking action, all the while just ignoring problems and hoping everyone will forget.

If governments are worried that private enterprise will not provide services to the poor or to remote communities then they should do what we pay them to do. Legislate responsibly. Some people really fail to grasp the fact that the more government involves itself with business and the lives of the people, the worse the lives of the people become.

Bozzie, surely you jest.

"Get out of the way and let that which has taken us from the Stone Age to the Information Age run the show; that being the profit motive"

Human ingenuity does not suddenly get switched on when a couple of dollar bills are thrust under its nose. The "profit motive", as you so tweely redefine "greed", comes into the picture quite late in the day - probably about the time of the industrial revolution, I would guess. Before then, duty, honour, charity and loyalty were the most prized characteristics of the ruling classes.

The problem with "the profit motive" is that it becomes, in and of itself, a goal or an objective. It used to be simply a means to ensure business continuity, but I defy you to justify to me why each one of our big four banks needs to gouge a billion dollars a quarter from its clients in return for its services. What could possibly happen that would demand that level of financial cushion in order for it to continue to survive?

How can you - apart from applauding the company's ability to dance around monopoly laws - justify a software company charging its customers ten times the cost of production and distribution of its product? And a pretty shoddy product at that?

Building a profitable business is patently a Good Thing. As a business owner myself I am fully aware of the need to make a return on investment. However I am also sure that maximizing profit at the expense of everything else is utterly destructive.

As far as public services are concerned, you seem to want your cake and eat it too.

"The governments role is to provide services where private enterprise cannot"

Oh really? From their actions, they seem to believe that nothing is beyond the powers of the private sector. And the mantra of "user pays" will ultimately ensure that an increasingly sizeable portion of society will be excluded from the business plan. Once profit is your only measure, it will happen.

Pericles I jesteth not! I can assure you that the profit motive has been around for a lot longer than the industrial revolution. People profited by having the means of making fire, by developing more efficient hunting practices etc. Money is not the only means by which one profits.

“Before then, duty, honour, charity and loyalty were the most prized characteristics of the ruling classes.” Well you could have fooled me!!

When has profit ever been seen as only a means to continue business? Businesses are formed for one reason only – to make profit. A business does not exist for the sake of its own existence. Making profits, according to the laws of the land, is the responsibility and duty of a company – especially a company that has thousands of share-holders, and no pie-in-the-sky socialist idealism can, will, or should change that.

That's a pretty weak sidestep bozzie. To suddenly decide that the word "profit" can mean "benefitting from the use of" certainly allows you to include fire, the wheel and hunting dinosaurs in your argument, but it carefully ignores the reality of today.

I - and I suspect most of the readers here - are referring to monetary profits. Like the twenty billion dollars of profit taken by our banking system that comes straight out of the pockets of everyone in the country. We have no alternative - try asking your employer to pay you in cash - in exactly the same way we have no alternative to public transport, electricity, water etc. etc. In the hands of private enterprise, we are no longer "members of the public" or "residents of NSW" but simply customers, whose task is to provide profits for shareholders.

To object to this form of extortion is not "pie-in-the-sky socialist idealism". As I mentioned before, I am a business owner, responsible to employees and customers as well as shareholders for the proper conduct of my business. I take a longterm perspective on these responsibilities, and making a profit is essential to this longterm view. However, it is not, and never will be, the sole reason for starting and running a business.

I suspect however that you are just saying the stuff you say because it sounds tough and macho - survival of the fittest and all that. Sadly, there are people out there who are unsuited to having to be part of the rat-race simply to catch a bus. Spare a thought for them occasionally, even if only because you might be one of them yourself one day.

I'm confused when people refer to government ownership of enterprises as "socialism". I understand socialism to be "workers' control of the means of production" (at least in the Marxist sense). I don't believe the Commonwealth Bank was a proletarian hotbed before the previous ALP Government flogged it off. When the state owns enterprises it is simply state capitalism. See Tony Cliff's work State Capitalism in Russia. It clarifies this point well.