One of the biggest economic myths, is "that competition keeps prices down".

There are heaps of examples where this deluded belief does not apply.

For example Australian's pay some of the highest SMS charges in the world, yet there are a number of competitors to this market.

A recent report show that Australians are paying the highest fees to manage superannuation, yet there are a large number of competitors to this market as well.

Another deluded belief is about supply and demand, in theory as demand falls, so should prices. Yet as demand falls for water and power, prices increase to improve profitability. This is a death spiral, as prices increase, the consumer looks for more and more ways to save money, driving down demand, and as demand falls, so does profitability and thus prices increase to increase profitability.

Regulation is actually much worse than the author suggests. The effect that it usually has is to increase the cost of the service (through compliance) and prevent alternative solutions from emerging to provide the competition that will drive the market to a balance between costs and profit.

Probably the biggest underlying problem in Australia is the almost exclusive focus on increasing margins as opposed to growing markets. It’s almost as if we have forgotten the lessons of QANTAS and Ansett and their airfares

the highest SMS charges in the world, yet there are a number of competitor
Wolly B,
I think you're mistaking business practise with the kind of greed/rip-off mentality peculiar to Australians.
Australia could be the best country with the best future if we could only change the mentality of so many of its citizens. The stuff you jack I'm alright mentality is gaining popularity instead of being condemned.
Australians are Australia's worst enemies.

I returned several days back from the small, remote, economically challenged and relatively resource poor country of Latvia.

They have one dominant telco and several smaller players, just like Australia. But that is where the comparisons cease to be meaningful.

In Oz I pay for SMS's. Not in Latvia, in any of the three systems. They are all entirely free, even for customers using pre-paid SIM's.

The cost for a month of phone plus data was less than 20 Euros, say $30, the same as for a landline in Oz.

For that I was entitled to hundreds of calls to anywhere in Latvia, including mobiles, plus several hundred of MB of data, which primarily ran Google Maps and carried my mail.

That same service in Australia would cost several times as much and achieve data speeds far less impressive.

My point is that, as for the point made in the preceding comment, markets, though superficially similar, seem to deliver substantially worse outcomes in Australia than overseas. This results in higher cost of living pressures and, worse, lower productivity for our enterprises.

[Continued]

PART TWO

Where are the comparative studies that might analyse the performance of our privatised freeways, airports, rail systems, water and sewer, telephony, electricity generation and distribution, ports and ferries, hospitals, schools and even cemetries? Where is the informed and educational public debate?

This article is founded on an assumption that private corporations are magically more efficient and productive and deliver lower costs to both the owners and their customers.

The opposite is generally true.

Australian experience has been that privatisation has consistently failed to deliver efficiency to the customer or the ratepayer, regardless of market structure.

The critical difference is that publicly-owned corporations are staffed by stable workforces of professionals with wide knowledge and experience in their business, their customers, their strengths and their weaknesses. Some even become centres of excellence with global standing.

Never have I heard, for example, that Macquarie Bank has world-beating engineering or asset management teams. What we regularly hear is that Sydney airport or some other asset has increased its charges, is accountable to nobody, has unhappy customers and has a history of outrageously excessive staff remuneration, especially at the top where tens of millions of dollars are flushed away without any problem.

So, please, either abandon the a priori assumption of the efficiency of privatised corporations, whether subjected to competition or not, or produce hard evidence that this is so. It is in general patently false, at least in post-Federation Australia. It is a sacred cow, an unchallengeable and unchallenged article of faith that has been relied upon by politicians and corporate mendicants for decades.

It is also the reason behind our nation's race to the bottom in many formerly publicly owned industries.

Last, but not least, privatisation has seen the legal and financial industries bloom. It has been a windfall for these privileged yet totally parasitic industries which gold plate everything they touch and return no tangible benefit to anybody but themselves. A pox on them all!

Exactly, that also applies to former co-ops, stupid enough to hand over control to private operators. We lose out twice, once when the operation is privatized, and secondly, when the increased profits are repatriated.
Hence we not only pay more, but taxes are foregone, along with most profits.
If there were real competition, instead of increased margins and so-called competitors, operating exactly like a cartel, there'd be an element of real choice and margins cut to the bone.
The problem doesn't end there, given most of these "privatizations" are debt funded purchases, we get the added privilege of repaying the loan, through premium prices.
We have, i.e., four major oil companies competing for our custom; and only if they're not operating as quite blatant cartels, competition that drives down prices!
Extremely occasionally, we might see that happening, until the real competition, independents are driven from the, so called free market.
And who do we have to thank for this state of affairs, the cooperating or roll over and beg for a tummy rub legislators?
Just the other day, I heard a dairy farmer, bleating that he was only getting around 35 cents a litre for his milk, and simply not enough to recover costs!
I replied, what would you have gotten, when you were still part of a self owned co-op?
The silence was deafening!
Well then I continued, what actually prevents you from getting together with your neighbors and creating another?
More deafening silence!
Its as though, patent right wing ideologues, just can't seem to get it through their thick as two planks, heads, that privatization serves very few save, [I'm all right Jack, the rest of you dummies can go visit the nearest taxidermist,] and that cadre, is still a shrinking number.
Only madness, makes us able to sell off income earning assets, in return for repatriated profits, far less tax, and the privilege, as captive consumers, of paying back the foreigner's borrowings!
As lamb chop chewing Sam, kick the ball Kicovich, would say, you know it makes perfect sense.
Rhrosty.

Rhrosty is, as he usually is, right on the ball. UniCredit provides a splendid service to its members and has a constitutional ban on privatising it without direct membership permission.

Is my gut feeling correct that Labor governments historically build the national asset base (goods and services) and non-Labor governments squander national assets by privatisation? How many dollars’ worth of such assets did the Howard-Costello government flog off to private investors? I do believe Keating also sold large Australian assets to global investors who in response dubbed him the world’s greatest Treasurer. And now we’re facing further wealth attrition at the hands of Abbott’s Coalition of the Lying. Bye bye postal service for a start?

A key role in inserting democracy into representative government would be played by a curb on corporate ownership of political parties and their politicians, though a binding citizen-initiated referendum provision would expose all sales of Australian assets to private investors to the will of the people.

lets not F0RGET/all the public money going into private tax free/trust-funds[if only govt could rent it back for double/
http://nypost.com/2014/06/24/va-misconduct-may-have-led-to-1000-deaths-report/

LIKE GOVT/MONEY IS GREAT
[IE NOTE HOW MEDICAL/HAS GOT PHONEY TONY/to pay top-up/into a slushfund/for\use of big-pharma/who get a nice/PERSCRIBED/SUBSCRIBD/SUBSIDIZED/drug cash flow/sel/ing fake copies of the real[cheaper god/made drugs/they declared a drug war on[by big pharma writing it into a treaty..
http://etfdailynews.com/2014/06/24/u-s-neo-cons-seek-to-rewrite-iraq-history-again/

by rights govt miss/managment[read polutions[//make us sick/so govt should own/control the research/too..
http://rinf.com/alt-news/sicence-technology/gmo-crops-india-profit-driven-destruction-agriculture/

[and while big money loves a hair growing cure[that grows/hair/but funny stop taking the daily 'medication;..baldness returns.

like cancer can be cured in many ways[but they dont get funding[why?]
because big pharma mAKES a motza from sickness/managment[ie suppressing the symptom/not cureing the diease[think jobs jobs jobs[thats why cancer never really gets any cure/too much money in not fixing it

ditto[they can kill teeth decay/bacteria/no more rotten teeth[just like we got ruid of other issues/but what/the dentists need jobs jobs jobs

besides what eklse are they going to spend our compulory super on
sure when govt paid pensions/they needed the income streams/but hey big money gives the orders here/bulls hit walks,

Obamacare subsidies to reach $11 billion;
healthcare system running entirely on unsustainable debt spending
http://www.thedailysheeple.com/obamacare-subsidies-to-reach-11-billion-healthcare-system-running-entirely-on-unsustainable-debt-spending_062014

According to the Los Angeles Times, a recent analysis of cost data projections by the Department of Health and Human Services regarding government expenditures related to Obamacare found that initial costs for the program were billions of dollars higher than projected.

this unprecedented level of money-printing is catapulting the U.S. debt to $28 trillion by 2018. But now, the U.S. government and the Fed are completely out of ammo. They desperately need money to maintain their own power, and taxes are no longer enough.
http://www.wholesaledirectmetals.com/index.php/gold-blog/622-govt-seizes-control-of-all-your-financial-accounts

So in order to keep the Ponzi scheme going, the U.S. government has made several highly controversial moves to be in position to seize control of all your financial accounts. And it’s becoming clearer by the day, if you want to protect your savings and wealth from government confiscation, you only have ONE choice...CASH-SHORTING
http://investmentwatchblog.com/too-much-leverage-risk-and-speculations-dubai-market-now-down-25-on-margin-calls-are-we-setting-up-for-another-2008-type-financial-crisis/

What would ensue, do you think, if one of the minor parties, or a loose confederation of minor parties, proposed that no publicly owned asset could be sold, without an accompanying referendum?
And then suggested that that requirement, ought also to be applied retrospectively, so we the people, could more closely, examine the so called benefits of these arrangements?
How many seats, would either of the major parties lose!?
i.e., when we privatized Telsra, the money collected, could have entirely purchased Woodside!
And with some change?
Think, what is Woodside worth today, and what does it earn annually?
And make a list, of all the former peoples' assets, sold of at bargain basement prices, without our expressed consent, [pre election flagging,] to balance a budget, and or fund recurrent spending!?
Could those exchanges be reversed and what have these entities earned since, or today?
And the original purchase prices, refunded, if the then since "stolen" monies could also be refunded, or returned as an additional tax burden/HECS scheme on current beneficiaries?
Well, what happens in other places when stolen property is recovered, from those who have made windfall profits, as patent receivers of stolen property?
Not only are their profits forfeited to the crown, but all and any assets as well!
And the expression of "stolen" is appropriate or applicable, to our property, that's resumed and sold without our, the owners' explicit consent!?
Most of these allegedly legal privatizations were rendered necessary, due to reduction in revenue; due in turn, only to tax breaks, and usually for the better off, rather than those, thrust into higher and higher rates, due exclusively to bracket creep!?
A series of wrongs, further compounded by many other wrongs!?
Rhrosty.

Australian experience has been that privatisation has consistently failed to deliver efficiency
John Bennetts,
Australian being the operative word in privatisation here. In other countries with different mentality people it is successful & consumers get a good deal.

Individual, some published examples please, that actually give a modicum of actual evidence, to your ebullient exaggerated claims!
Rhrosty.

horatio/quote..<<..loose confederation/of
minor parties,..proposed\that no publicly owned asset/could be sold,>>

the point really is/where*\do/claim
to/they\have permission..to sell?

and worse to..sell/crown-assets/for unlawful tender.

cure..<<>.applied retrospectively,>>

most surely/we are talking..FFICIAL/..
Oabout mal-feasance.up\to/treason

And that obtained..by fraud/or
BY/unfair/unlawful,MEANS,..never gains clear tile,

we the people,..should more closely,/examine
the so called =..claimed/benefits..of these arrangements..from them and their estates=^+*

<<..How many seats,>>if/the major parties get 51%..
this they will do..so we need\over half/the seats


Think,what is commonwealth/bank=is worth today,[who nows]
it was sold for 10 billion..and/today..pays 10 billion..in dividends/annually?

govt gave the gold silver from treasury/into the royal mint
then bankers leased the gold[at 44 dolars 44 CENT YANKI/THEN SOLD THE RENTAL

YOU EVER SOLD YOUR RENTAL HOUSE?

<<>.And make a list, of all the former peoples' assets, sold of at bargain basement prices, without our expressed consent,>>

sand set the thieves in jail
treason has no statute limits[plus sack the judcery]

<<..to balance a budget,>>
a tiny transaction tax on very/transaction
in/and\out and or fund recurrent spending!?

<<..Could those exchanges be reversed..>>
forget reversal/its proceeds of crime

<<..and what have these entities earned since,>>
get them back/the smallest 50%/users get it all free/the biggest pay/half\price..maybe indexation/no access user fees and other world bank fund raisers

<<>.what happens in other places when stolen property is recovered, from those who have made windfall profits, as patent receivers of stolen property?>>

PUBLIC AUCTION..EVERYTHING
[ALL CORPORATIONS ASSETS MUST BE AUCTIONED OFF OVER A PERIOD OF DECADES/BY SIZE AGE/AND INFLUENCE/WE BEGIN WITH THE BIGGEST TOO BIG TO FAIL?

our infrastructure/money systems/banking fed mint etc
phones water power/roads rail ports/all title installed with govt trustees/till we sort out whO GOT Defrauded[mainly it was our 'invested/funds/and compulsory\commerce/impositions..fees licences/permissions..[govt red tape/chARGES/etc

<<>.Not only are their profits forfeited to the crown,but all and any assets as well!..

FOR SURE

<<..And the expression of "stolen" is appropriate or applicable, to our property, that's resumed and sold without our, the owners' explicit consent!>>

agreed

<<..Most of]these allegedly legal privatizations\were rendered necessary,>>

undeney-ably so
trouble is govt is too affective..at stealing/from its people
to feed..ITS FATCAT MATES..on the cash-cow/teats...[open/to those--in the know.

This is a very old fight that goes back to the mid-20th century (and beyond) and the struggle between the post-war Labor government, who favoured people's-owned enterprises, and the powerful figures in Australian private industry - Reg Ansett, Keith Packer, Peter Abels, Frank Packer, Arthur Coles and of course Rupert Murdoch.

No prizes for guessing which side the Menzies government was on. Also no prizes for guessing which side the media took - and still takes to this day.

As these tycoons were building their empires, they could not stand the fact that the often much more efficiently managed and profitable government enterprises stifled their market share. A truce of sorts operated for a while under the duopoly system (e.g. TAA-Ansett ANA, SGIO-AMP, Commonwealth Bank-Bank of New South Wales), but by the 1980s the privateers had won. This was greatly helped by the fact that Bob Hawke was best mates with most of them.

Although there are many very good arguments against privatisation (several of them in the comments above), indeed plenty of evidence to show it's been an unmitigated disaster, the sad fact is that logic, evidence and history are no match for the power, wealth and cultural influence of the privateers.

Correction to post above: The name 'Keith Packer' shouldn't be there. I just keyed the wrong name and forgot to delete before posting.

give a modicum of actual evidence
Rhosty,
this is just one of the many links on the subject but it is better to correspond with people from other countries or even travel there to find out how things work where people aren't so money obsessed as here. Talk to tourists, there are many things you can do to find out, all you need is an open mind & not get pi$$ed off when you come across people not as greedy & self-centered as here.
Looking up cultures is another good way of learning. I recall a documentary on some german companies which did very well by staying as a family business rather than having shareholders. No hangers-on to feed lets you keep operating costs down.

http://books.google.com.au/books?id=kBMuSdPpLXkC&pg=PA85&lpg=PA85&dq=examples+of+successful+privatization+in+europe&source=bl&ots=HRIG5g-Woj&sig=GG4KAOT6b4fZkjshTm3_0gbmBnk&hl=en&sa=X&ei=FJaqU_W2PMnUkwXMjoGAAQ&ved=0CFsQ6AEwBw#v=onepage&q=examples%20of%20successful%20privatization%20in%20europe&f=false

IM MINDED/nsw\GOVT HAS ONE BILLION..to spenD
ON THE NEXT INFASTRUCTURE SALE..cause it just sold the powr generators off[that that carbon credit/money was used..TO ABATE/AND THAT NOW COAL WILL BE shut down[to get its next carbon credit/YOU WILL SOON WATCH THIS GRANDSCAM UNWIND

i try TO IGNORE THESE FOOLS
but..PLEASE NOTE..THE COST OF COAL[BEFORE YOU GUYS BEgan screwing them and shutting theM DOWN[OR THE FUTURE CARBON CREIT PRICED COAl

THING IS..THEse..fools..DONT REALISE WHY THEY ARE GETTING NEAR 4 TIMES THE COal price generated powER PRICES[THE EXPECTATION IS THAT keep doubling up the price of coal/and 55 cents buy back will look cheap

how to say..[nay demand/thEY INCLUDE PRICES/WHEN THE PRICE PARITY
FINALY SETTLES..TRIPPLE THE COST TODAY.

RELitivly speaking..55 cent buy back mob wiLL THEM BEGIN TO FEEL AS WE WHO GAVE THEM THeir free lunch feel today[SURE WAY BACK..IF MY POWER BILLS WERE the same..in a tyear as free solar cells/i too [as a huge user abuser/POWeR USER[IF SO THEN YES I WOULD TOO HAVE SNAFLED UP 55 CENTS extortion fron everyone else

i now seE THOSE FACTORY ROVES/AND Rooves on them semii private public buILDINGS AS A WAY TO DO A HUGE CASH CRAB FOR THE ARTS/AND SPORT STADIUMS/OFF SETTING THEIR HUGe powr costs/of my full rice power bill

you scum are doing treason
how dare you lot keep pronising[all rEADY MY POWRR RATE HAS DOUBLED
CODE RADS COAL .SOLAR PARITY[SURE/but at what cost?..who is gETTING THE BIG BUCKS BY THE HECTARE?..audit their boOKS[I HEAR SOME ARE TAKING OFF peak..at 11 cents/to charge up solar cells/by lights/to sell back at 55 cents/24/7..MINUS THe two hours off peak shuts off.

GREAT ENRON SCAMING
http://www.washingtonsblog.com/2014/05/enron-2-0-wall-street-wants-manipulate-state-energy-markets-just-like-manipulates-every-market.html

AHH YA GOTTA LOVE NEST FEATHERING
NOW HOW..TO/JUSt get the coal price up..TILL 55 CENTS LOOKS CHEAPER

YOUR GREAT GRANDkids will reap the pain
done by fear mongering spin/of big money down the drain.
THIUNK WHAT OUR POWER EXPENDITURE USED TO SUPPORT/NO MORE FAMILY TREats/thanks to you greenie freaks.

your scam MUST/die/your EXCESS IS KILLING US/ALL
YOUR IGNORANCE/Gullability\is endangering us all

Monopoly both ways but what about the separation of powers. State owned has the Regulator in same bed as the Provider whereas private hands provides a separation of economic from political / coercive powers. Now with State Monopoly supply even if you use all tank water and cut off the connection you still have to pay for "ACCESS" to it, don't use it but still pay. Sell the Poles and use it to improve NSW, private suppliers will be asses from time to time but bad transport and other fundamental infrastructure is bad ALL the time.