As a user of electrical and other utilities I have to deal with the corporate entities that supply those services. Whether these corporations are capitalist under private ownership or socialist owned by the government is not important to me. In either case I am dealing with a large, generally unresponsive entity. If I am dissatisfied with the service I have limited recourse. It really doesn’t matter to me as a consumer who owns the entity. To me the problem is to make such entities responsive to the needs of the consumer not who owns them.

Dear david f,

I don't have a problem either with privatisation
or government ownership of services so long as they
are properly controlled and regulated to high
standards in the interests of consumers.

In Japan for example, private health insurance is
regulated by the government at set scale of fees,
which are much lower then in Australia,
and private health practitioners cannot charge more
under strictly inforced penalties.

Government run bureaucracy tends to be slower because
they're not forced to be competitive compared to
private industry which is by its nature forced to be
competitive.

To my knowledge, Aged-Care facility Design, Construction,
and Maintenance (Accreditation) is controlled by
Federal Government for High-Care, and State Government
for Low-Care (Assisted-Living) but there appears to be
no definitive regulations or control for the quality
of the actual care of the residents.

That is why qualified staffing standards may be low,
quality of the food, care in general may be sub-standard.
These facilities only attract attention when serious
problems develop and families complain.
Up until then they're only regulated by the physical
standards not by the quality of services and care that is
actually being provided.

Foxy wrote:

Government run bureaucracy tends to be slower because they're not forced to be competitive compared to private industry which is by its nature forced to be competitive.

Dear Foxy,

There is nothing about private industry which forces it to be competitive. That is a common misconception. Where private industry has a monopoly and no competition it is not forced to be competitive. Henry Ford at one time made almost all the automobiles in the US. When asked about colours he said, "You can have any color you want as long as it's black."

I used utilities as my example because by their nature they are generally monopolistic.

Propaganda for privatisation mentions competitiveness and efficiency. They are not necessarily factors. Private industry produces private profits.

Foxy

I have worked in both private and government organisations (primarily government). Part of the problem for both sectors is size - the bigger. the more layers of staff and the more bureacratic. A large slice of government administration is spent on ensuring that whatever policies are currently in effect are followed (whether the policy is good or not is another matter entirely). But procedures must be followed and decisions accounted for. Where this can be disastrous is where policy is particularly rigid, for example, the treatment of refugees.

Private also has to meet procedures but no where near level of government. This gives it greater flexibility - depending on its management. As Davidf stated there is no obligation for a private business to be competitive so long as it is making a profit. Examples of this are monopolies like Coles and Woolworths. If anything, they are anti-competitive.

What is important is the desired outcome. For example Health Care is better handled by government where there is no conflict of profit over human wellbeing. However, innovation and development are best in private hands, for example, sustainable energy.

Therefore, some services are better in government control, others in non-government organisation (Red Cross) or Public Private Partnership (public housing) and finally completely private ownership (manufacturing).

Like much in this life there is no 'single' or 'either/or' answer. A blend of all where appropriate is best. The problem is that many services were privatised that should never have been and many large corporations were de-regulated to the point we have now - financial melt-down.

Balance is everything. But there will always be those who believe that their way is the only way, hence the conflict.

It's a fairly generalised concept.

I agree that it depends on what service you're talking about.

How would a privatised Police Force or Fire Brigade work out for the public?

From my experience in both sectors, I found that public enterprise generally works in the public interest while a private enterprise works only for the shareholder.

However, since many existing public enterprises (such as electricity) have become corporatised and try to function as profit motivated business enterprises so the lines have blurred.

Maybe it's management and not ownership that makes the difference.

Efficiency is also not the same as effectiveness.

Anybody like to name a public enterprise that's become more effective since it was sold off?

*Maybe it's management and not ownership that makes the difference.*

Ah very true! If we take Australia Post, these days they are actually
reasonably efficient. But I gather that is because they were read
the riot act, ie. if they did not pull their fingers out, they would
be sold.

Where we have a problem these days, is that many laws that applied to
the public service, have now been forced onto the private sector,
like the right to fire people who are useless.

Small business is where things are generally highly competitive.
If they ran their businesses like Govt runs its business, most
would be broke.

Lets just look for instance, how the Australian Defence force wastes
money. I was reading the other day, about a piece of equipment
worth many millions, which is required to train submarine staff
in getting out of submarines at depth. Apparently they have
one sitting over here, but due to some disputes it is not running.
Easy, just fly everyone to Canada for training, the taxpayer
just coughs up. If private enterprise worked that way, they would
soon be out of business.

I am very hapy when I see profitable state organizations to privatized for a bunch of dollars and I am even happier when taxpayers pay billions of dollars for the bonus of failed managers in the private sector.
The privatisation of the profits and the socialsizing of the loses is my top specialite, I LOVE IT!
There is no diference between state and private enterprises , as we (citizens) are always from the losing side!
Antonios Symeonakis
Adelaide

Davidf
This one of civilization’s compromises and unsolvable conundrums if only because it has become a matter of political faith or ideological belief/bigotry.
Objectively both options have their weaknesses it all comes down to which set of objectives are chose and to what degree they’re implemented.
The one overriding factor in my mind is the size of the organization involved. At either end of the continuum the larger the size the less responsive it is to need.
Organizational theory/Group dynamics teaches that the primary purpose an organization is its survive/benefit and the bigger it becomes the more that focus tends to be. In either case the individual tends to become less important both internally and externally. Both tend towards monopolism of the sector. This isn’t good for service.

At the Govt end statutory compliance becomes the defining inhibitor. Large departments are often typified by a lack of flexibility, overly structured responses, slow to act/change (red tape, bureaucratically arthritic).

Yet large mega Corporations tend to suffer the same symptoms only here the objective is profit for a relatively few beneficiaries Upper management and share holders. Because this version is based on profit then those involved tent to be less statutory compliant spending inordinate amounts of money on defending, lobbying and ways to circumvent or reduce controls. The result is an organization that arguably encourages greed and reduction in apposite/equitable wealth distribution.

Consider the wages of top departmental execs, departmental expenditure
multimillion $ wage packets executive jets , Perks limos (scale) or on tax avoidance, abuses of power, off- shore dodges and off-shoring services?

In conclusion I think the determining factors are the size of the organization and its inherent objectives that determine the management and style.

I would suggest on balance if the most efficiently requisite of the organization to manage a service is large or monopolistic then it should on principle be in the hands of the people. Business/capitalism is best when it serves the people not the other way around. Total reliance or either extreme should be avoided.

There used to be clear distinctions between public and private enterprises. Public entities characterized by being run by bureaucrats, management by committee, for the provision of collective goods and services, such as education, utilities, public transport and many more. The private entities supply goods and services, mostly in a competitive market for profit.

Fractelle, there may be private entities that have a monopoly but I can’t think of any, though you are right about Coles and Woolworths being anti-competitive, more to do with total grocery market share, but not as monopolies.

Many previously government owned enterprises have been sold to the private sector or their functions “outsourced”. We now have a confusing mix. I tend to support David f that it’s not who owns them but to what extent they meet customer expectations.

There will always be good and bad examples from either perspective, it’s up to the pollies to decide what fits in private and public ownership and the consumer can vote with their feet, unless of course we are facing a monopoly.

Yabby’s example of Australia Post is a good one; they have certainly achieved customer focus. The driving force behind that transformation was however competitive. In the early 90’s, TNT and the then privatized Dutch Postal service made a joint bid for AP’s exclusive franchise in Australia. AP responded to the government with their own modernization proposal which was accepted and I believe well implemented. I would also nominate the ATO as a star of customer focus transformation. I would also nominate from experience, Telstra as one of the worst examples.

I guess the issues facing the government are how much of our money they are prepared to spend on public ownership? Both sectors provide employment, tax revenue and a product or service. The government can exercise more control with public ownership but is that what is needed. I guess I’m saying, if public ownership is the answer, what was the question?

Examinator, I’m really at odds with your suggestion that the size of an enterprise correlates to reduced service, monopolism, the encouragement of greed and reduction in equitable wealth distribution. Where on earth did you dig that lot up from, some pre-1980 dissertation by Engels?

There is no way a $90bn corporation with 120,000 employees in 35 countries could survive without enormous focus upon their main assets (employees), their customers, and a total understanding of the social, political, economic, religious and ecological factors for every part of their business.

I accept that there are some dreadful examples of executive “piggery” out there and I do not seek to excuse these however, your generalizations on large enterprises are simply not true.

From the early 80’s large entities embarked upon major transformations. They adopted flat management structures with downward delegation, bureaucracies maintained hierarchical structures with upward delegation. Corporate Cultures were interrogated and modified; Business Process Engineering and Entity Relationship Analysis were introduced. Many multi-national corporations implemented “Bill of Rights” and anti-discrimination 10 years before Australia adopted the 1994 Act.

The greatest improvement in behavior was the introduction of 360 degree assessments, employees were assessed by subordinates, peers and superiors. Try to be a “corporate toad” in that environment.

Your generalization of employees in large enterprises is as sad and ideological as it is untrue. I spent 40 years in small, medium and large enterprises; I do not recognize your characterizations as being remotely close to the real life I have experienced.

This quite sad really, we had an excellent exchange on another thread; I learned much and I thank you for that. However, my disappointment is that your balanced and thoughtful insights on another thread were replaced in this thread with an ill informed and ideological hissy fit

Errr... spindoc?

>>There is no way a $90bn corporation with 120,000 employees in 35 countries could survive without enormous focus upon their main assets (employees), their customers, and a total understanding of the social, political, economic, religious and ecological factors for every part of their business.<<

How about a $169bn corporation with $60bn in revenues and 90,000 employees in 105 countries?

I give you - Microsoft.

Anyone who has been Windowed, from Version 3.0 through to Vista, knows exactly how Microsoft values its customers.

They love our wallets, though, you have to give them that.

*Telstra as one of the worst examples.*

Spindoc, but even in this case, Telstra having some pups snapping
at its heels, has made a difference and consumers benefit.

I was the first around my district to link up to the internet.
Telstra/MSN was the only ISP, they charged 5$ an hour and later
9$ an hour for access! I had some huge arguments with Telstra
people, pointing out that how much went down those lines hardly
mattered, unlike electricity. I rang my local MP, mentioning
the potential of the internet (this was in 1995), but he really
did not know what it was.

Telstra, still Govt owned, just did not want to know, they had
the monopoly and the money was rolling in, their staff lived
in dreamland.

Eventually a tiny ISP set up in the area and was struggling to
find 10 people to get going. Things grew from there. Without
that competition, we would have ISP charges which still would be
through the roof.

Yabby, good points, I’ll explain why I used Telstra and Aust. Post as examples.

Both entities were formerly publicly owned. They were bureaucracies, hierarchical in structure, internally focused and would not have recognized a “customer” if they fell over one.

Aust.Post changed everything, their culture, flatter structure, their customer focus. I hate the expression however, they “re-invented” their entire organization. I think most would agree that this has been a positive change even though they still enjoy a monopoly.

Telstra on the other hand has some severe problems. They are still a rampant bureaucracy, hierarchical, internally focused and predatory. I agree, there has been some improvement.

Some of the biggest problems for Telstra include the fact that they are still regulated to “wholesale” some of their infrastructure to their competitors, crazy I know, but they cannot escape the regulation imposed by the Minister for Communications. So they have ended up as a hybrid, a federally regulated bureaucracy but with majority private ownership in an increasingly competitive market.

Telstra has little choice other than to adopt some of the predatory, market control mechanisms that the public often find distasteful, not to mention the negative impact on customer service. Today, every single product and service offered by Telstra is exposed to competition, often from very small entrepreneurial start-up companies as you rightly point out.

Sadly, Telstra is left with trying to hang onto its little bits of exclusivity for as long as it possibly can. As I said in an earlier post, the distinctions between public and private ownership are blurred and we are left with a mix that mystifies us.

I think you’re on the money with your earlier post, that “Maybe its management and not ownership that makes the difference.” The examples supporting this are Aust. Post on the one hand, a bureaucracy that still holds a monopoly but seems to be pleasing its customers,.

On the other hand, a hybrid like Telstra that has made some progress, but has stalled and is now fighting for survival in its retail sector. I would love to hear of other examples.