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Issue #1432      21 October 2009


Privatisation: a question of ideology

The stench of corruption that hangs over NSW thickened this week with the announcement of the sale of an historic estate to a wealthy, elite, private boys’ school for $35.2 million. The sale adds to the long list of public property being sold off in a last minute dash by a morally and financially bankrupt government whose days are numbered. And while the Church of England Boys Grammar School (commonly known as Shore) expands its real estate from 5.65 hectares to 8.32 hectares, the government is thieving and selling off the grounds of under-funded, under-staffed public schools. (See page 4 for NSW’s privatisation hit list and Victoria’s power station woes.)

This latest sale of public property highlights the neo-liberal (economic rationalist) privatisation agenda that was set in train by the Hawke/Keating Labor government in the 1980s and carried on by the Coalition under Howard and Costello. State and federal governments have over the past two decades sold off publicly owned banks, insurance companies, electricity, water, gas, transport, housing, land and other infrastructure and services. If it wasn’t sold off, it was contracted out, opened up to private competition or handed over through management contracts and so-called public private partnerships (PPPs).

Public is bad, private is good, according to the prevailing neo-liberal ideology. If it can turn a profit, then it should be in private hands. And just in case it doesn’t turn a profit then the privatising government should guarantee the profits, and pick up the pieces when the private sector has bled it dry. The failed privatisations of public transport and power plants in Victoria are classic examples of public responsibility and private profit. The hundreds of millions being paid every year to private consortiums to shore up the profits of private tunnels and roads by the NSW government, are other examples of private profit, public responsibility.

Privatisation involves more than just new sources of capitalist profit-generation and accumulation of wealth by private individuals. As the Political Resolution adopted by the CPA Congress two weeks ago stated: “Privatisation results in a fundamental change in the objective of service provision from one of providing government or the public with a service based on needs to one where the service becomes a vehicle for making private profits.” Hence the decline in quality of services, higher prices, loss of access where it is not profitable, the run-down in maintenance, and many other problems that follow privatisation.

The Political Resolution also notes that privatisation also “involves a transfer of power from sovereign, elected governments to corporate boardrooms whose whole raison d’être is the making and accumulating of private profits.” People’s needs, health and well being, jobs, working conditions, quality of life, and the environment come last. The Political Resolution continues: “The term ‘public service’ has been redefined from meaning a service provided by the public sector to a service which is used by the public and increasingly provided by the private corporations.” When it comes to public housing, they have even dropped any pretence of calling it public; the spin doctors have coined the term “social housing”.

Public housing was once built by government public works departments and provided affordable housing to thousands of families, pensioners and other individuals. It is another victim of privatisation, public works departments have been dismantled, public housing is being sold off, rentals reset at unaffordable “market rates” with the government subsidising some of the gap to ensure private profits.

Every new round of privatisation is accompanied with a variety of pretexts: creates competition, lowers prices, is more efficient, shortage of funds, paying off the stimulus debt…. Every reason given is a lie, a cover-up for the ideological underpinning of privatisation. The public sector is proven to be more efficient, to cost less (no layers of profit), to provide better services, is capable of providing universal access, creates more jobs and apprenticeships, and is more likely to be unionised.

As for the money, there is no shortage, it comes down to priorities. Why will Shore, with $35.2 million to spare, receive $9 million in Commonwealth handouts over the next four years? Why are we allocating $25 billion or more per annum to the military budget? Why are we subsidising the private hospital system to the tune of $4 billion plus a year? No, there is no shortage of money. It is a question of ideology, as summed up by the well known expressions: public versus private and people versus profits.  


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