The Andrews Labor government has finalised plans to privatise the Port of Melbourne, selling it off for $9.7 billion. In doing this they have shown themselves to be loyal servants of the profit-hungry capitalist class.
The sale of the most valuable publicly owned asset in Australia (under the guise of a 50-year lease) to the Lonsdale Consortium came after the government cleared away all the port’s debt. Simply stated, this is the largest privatisation deal in Australia’s history and it was financed by the taxpayers to the tune of $653 million!
This consortium includes the Future Fund run by the former Liberal Treasurer Peter Costello and the China Investment Corporation, whose driving force in acquiring the asset is more political than economic.
In selling the port debt-free the government is making it easier for the consortium to load the asset up with debt to minimise on-going tax liability. Once they’ve finished, it will be worthless.
This sort of ‘financial engineering’ is common with privatised infrastructure monopolies, as over the period of the lease there will be a need for new heavy investment. How it is structured is crucial. The ACCC chairperson Rod Simms recently said that: “a sharp uppercut is necessary and that’s why I am saying: stop the privatisation”.
There is much evidence to show that unregulated monopolies also damage the broader economy. In this instance, we can expect extensive price gouging that will inevitably impact on exports.
While much has been made of the $9.7 billion revenue boost, the consortium will have factored in a handy return on investment. Inevitably Victorian export producers will be slugged more which they will pass down the line to the public.
There is no doubt that privatisation only serves to increase the profits of the capitalist class. It is imperative that we fight for important infrastructure assets such as ports, public transport, roads, banks and so on to stay in public hands.
By Michael Naismith