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Issue # 1418      8 July 2009

Top ten reasons a member voted against privatisation at ALP Qld State Conference

The “Renewing Queensland: Future Investment Plan” – announced by the Queensland government on June 2, 2009 – involved the sell-off, over the next 3-5 years, of Queensland Motorways Ltd, the Port of Brisbane, Forestry Plantations Queensland, Queensland Rail and the Abbot Point coal terminal (north of Bowen).

I voted NO to the privatisation. Below are my Top Ten reasons why.

1. Myth – The global financial crisis is to blame. It’s “punched a $14 billion hole” in our budget for the next four years.

Wrong. Queensland now has budgetary problems because of years of mismanagement and adhering to the ridiculous “low tax state” policy. Since 2001 Queensland has experienced a property boom, a resources boom, and larger than expected GST payments. And what have we done with this one-off surge in revenue? Answer – given it away as permanent tax cuts. Every year since the first Mackenroth budget in 2001 we have given away tax cuts or concessions in relation to the fuel subsidy, payroll tax, stamp duty and land tax.

It has been the financial equivalent of “pissing it up against the wall”. We should have been saving for a rainy day. As summed up by respected economics commentator, George Megalogenis (The Australian, December 10, 2008) in the article entitled “Qld Treasurer Andrew Fraser’s deficit of foresight results in taxing times”:

“Queensland gambled on a never-ending property boom. Don’t blame Wall Street for this. The mistake is home grown ... (they) didn’t bank the windfalls, so they could spend in bad times such as those we are going through now. They used the proceeds instead to cut taxes elsewhere. In effect, they took a temporary revenue surge and returned it as a permanent tax cut. By not imagining the day when the property market might go bust, Fraser has condemned his taxpayers to more pain than necessary in a downturn.”

And don’t forget – we’ve also raked in billions since 2001 from selling Ergon Retail and Energex Retail ($3 billion), the TAB ($500 million), the Dalrymple Bay Coal Terminal ($643 million) the Brisbane Market Corporation, Golden Casket’s lottery operations (the state government now only owns the trademark brand), Mackay Airport and Cairns Airport. Where’s all the money gone?

2. Myth – If we don’t privatise, we won’t get back our credit rating

Wrong. Queensland lost its triple A credit rating with both Moodys and Standard and Poors this year, primarily due to what was described above. NSW, widely viewed as a “basket case” economy, still has its triple A credit rating – and it hasn’t privatised!

3. It will cut jobs

During the recent state election campaign, the predominant mantra of Anna Bligh was that her government would “protect jobs”. Selling assets as listed above will cut jobs and most probably leave remaining workers on non-union contracts.

4. Selective drawing upon of other states and other privatisations

Treasurer Andrew Fraser talked about Queensland being different. “We are a decentralised state with large infrastructure needs. We are different from Victoria, Tasmania and South Australia where once you take care of the capital city, that’s pretty much everything covered.”

Why didn’t he mention WA and NSW? Both are decentralised states as well, and both have “growth” areas e.g. NSW has the West Sydney-Macarthur region and the Central Coast; and WA has the northern suburbs of Perth and South West WA. Both States have not privatised to fund infrastructure programs.

Premier Anna Bligh also talks about the “success” of privatisations by looking at Qantas. Why didn’t she talk about the “success” of the privatisations of Telstra, the Commonwealth Bank, the Victorian electricity system, the Victorian public transport system and the South Australian electricity system? All cases have resulted in job losses, higher fees or prices, and reduced quality of service.

5. Where’s the beef?

At Conference we were told the privatisations will realise $15 billion and help cater for a $14 billion hole in state government revenue over the next 4 years. Where’s the supporting evidence and information of such claims? What modelling was used and what methodology and assumptions underpinned such modelling? Will such information be made public and transparent?

6. Infrastructure spending

Listening to Bligh and Fraser you’d think it was just the Queensland government solely responsible for infrastructure spending in our state. Has consideration been given to federal infrastructure spending that will help ease the burden on the state government? For example the $20 billion Infrastructure Australia initiative, the Education Revolution which will see $3 billion spent in Queensland schools in the next four years, and the new $10 billion health and hospitals fund. Have such adjustments been taken into account for Queensland’s annual $17 billion infrastructure spend?

7. By privatising now, we avoid the need for the govt to find $12 billion in required infrastructure investment for the entities in question

And the private sector, in the middle of the gravest economic crisis since the Great Depression, will readily cough up this money? Are you kidding! Again, where is the evidence in support of such claims? At present every week we read about the government bailing out the private sector.

8. Winners and Losers

Winners of this policy will be the Brisbane stockbroking mafia and the Macquarie Banks and BBIs of this world – who will make millions and acquire assets for the purposes of simply making more money. People involved here have never been in a trade union in their life.

The losers will be current workers in these entities and trade unions which now represent such workers. Losing members weakens trade union representation power. Have we forgotten the wonderful work the unions contributed for federal election ’07 and Queensland state election ’09?

Consumers also stand to lose from higher prices and reduced standards of service. This is an absolute given. Ask people how they feel about electricity prices now that the state government privatised the retailers in 2007 and brought in a deregulated market.

9. Patrick could get hold of the Port of Brisbane Corporation

As reported in the Queensland financial pages, Patrick (of waterfront dispute, Rottweiler and balaclava-wearing goons fame) are likely to bid for Port of Brisbane and, given their expertise, have a great chance of acquiring it. What does the Labor government think of that? If Patrick lodge the best bid on commercial grounds, it would be a brave government to say “No’ – particularly with the rating agencies keeping a close watch on things.

10. The “take it or leave it” approach

Why is the government holding a gun to the community’s head and saying we have to do this and there is no other way? Why don’t we have a constructive debate and discussion about all options? Why do the dumbed-down economic rationalists at Queensland Treasury rigidly adhere to their free market dogma by way of privatisation? Perhaps it’s time some of the Old Guard at Queensland Treasury move on. They are simply living in the 1980s.

Peter Simpson is assistant secretary of the Communications, Electrical and Plumbing Union.

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