PASSWORD RESET

Magazine of the Socialist Party in Australia

Privatisation push threatens public assets

Public infrastructure assets worth up to $220bn are under threat by a renewed privatisation drive, pushed by superannuation funds and capitalist strategists. Previous rounds of privatisation were disastrous, resulting in higher consumer prices and worse services, as well as mass sackings.

In every state and territory except Victoria, publicly owned electricity assets are on the list of potential sales to profiteers. Water assets owned by multiple state governments are also being targeted. Rising power bills are only a small taste of what is to come if water assets are handed over to private management as well.

Worsening precarity, working conditions and wages would all result from privatisations. Mass sackings, devastating communities, would be carried out too. Just look at the effects of privatisation on the towns in the La Trobe valley after Victoria’s electricity sell off in 1995.

After privatization, Victoria’s private electricity companies cut back on maintenance. This was a cause of the catastrophic “Black Saturday” bushfires in 2009 with a death toll of around 180.

Trade union leaders colluding

Among those driving the privatisation agenda is global investment fund IFM. Trade union leaders are strongly represented on the boards of Industry Superannuation funds, who are major clients of IFM.

Union leaders who genuinely stood for working class peoples’ interests would use their board positions to oppose and block privatisations.

Unfortunately, most trade union leaders in Australia have fully capitulated to the market system and it’s profit-first ‘logic’ and follow the lead of those like IFM.

Superannuation itself is based on individualising and privatising the responsibility for retirement income.

When Labor Prime Minister Paul Keating made superannuation compulsory he saw it as a way of cutting down on publicly funded pensions.

This system leads to notoriously unfair outcomes that reinforce inequality and the specific oppressions faced by different layers of workers.

Women on average have much lower superannuation balances than men. Workers in socially vital but low paid sectors face retirement in poverty. Workers who are injured or seriously ill during their careers suffer as well.

We shouldn’t base individual retirement income on the chaos of capitalism’s boom and bust cycle. Instead we need a system of publicly funded pensions that reward workers for their social  contribution without leaving anyone in poverty.

Public infrastructure needed

Australian capitalism is struggling to stay out of recession and keep corporate profits flowing in the wake of the housing downturn. Bosses are seeking new sources of profit.

As well as privatizing existing services and infrastructure, new infrastructure projects which are publicly funded but privately built are a part of their strategy.

Pro-profit governments have overseen decades of under-investment and poor planning in cities and towns across the country. The result is increasingly clogged transport, ballooning commute times, rising costs and falling living standards.

But the debate about infrastructure in the corporate press and among the rich and powerful is not centred around social or environmental necessities.

Instead it’s all about how private big business interests can maximise profits.

Rather than taxing corporations more, or governments borrowing money while interest rates are at record lows, big business and their representatives propose more privatisation.

This would fund lucrative contracts for the big construction firms and at the same time hand over profitable and reliable utilities to ‘investors’ to “strip-mine”. It’s a way of making workers pay twice for new infrastructure while bosses walk away with fat profits.

The current boom in big-project construction in some parts of the country, like Victoria and New South Wales, is merely catch-up for what is needed.

For example some estimates show there is a shortage of at least 430,000 affordable homes nationally. We would need 30,000 new affordable homes every year for decades to come to meet the demand!

In addition we need a massive expansion of public transport in the cities and better provision of health, education and other services in local communities nationwide.

All of this needs to be done in a way that works against the looming climate catastrophe.

Funding for pensions and infrastructure alike shouldn’t come from gouging workers. The record profits of the banks over the last decade give an example of how much untapped wealth exists.

Even a modest increase in corporation tax could provide tens of billions of dollars towards proper pensions and climate friendly socially useful infrastructure. Socialists envision going much further than just tax increases. Instead we need the opposite of privatisation.

Public ownership of the biggest companies in the economy would provide us all the resources we need to collectively and democratically plan to meet the needs of all workers.

By Kirk Leonard