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Rachel Nolan on the case for privatisation

December 2nd, 2012

During the long debate over the Bligh government’s sale of public assets, I was frustrated by the government’s refusal to mount a serious case in favour of the sales. The official argument, that the money gained from the sale of income-earning assets could be used to finance the building of schools and hospitals was such obvious nonsense that even strong advocates of privatisation like Henry Ergas were willing to sign a letter I organized pointing this out and calling for a proper debate. Now finally, former Transport Minister Rachel Nolan has given us some idea of what the government was really thinking.

Nolan has a piece in Quarterly Essay (paywalled, but there is a summary from Laura Tingle here), in which she laments that Australians “have little philosophical grasp of the (rightful) diminution of governmental power which deregulation has brought” . She retails some anecdotes of being besieged by “rent-seekers” wanting her to direct Queensland Rail in various ways[1], and complains about constituents wanting her to fix various things outside her control.

Some notable features of the piece:

* While complaining that we haven’t accepted the implications of deregulation, Nolan doesn’t acknowledge that we never asked for deregulation in the first place, nor does she present any positive case for deregulation. It’s just part of her background assumptions about the way the world works and should work

* There is no mention at all of the Global Financial Crisis and its implications. Nolan’s world view, formed in the 1990s, has been utterly unaffected by this massive failure of capitalism

* The remaining role Nolan sees for government is minimal, even by the standards of market liberal orthodoxy. She briefly mentions a “social safety net” (the preferred term of the most residualist market liberal view) but otherwise says nothing about equality, or even equality of opportunity. There’s a handwave in the direction of basic public goods, and a nod to sustainability. And implicit in the post is the assumption that all of this is already baked into the cake and that the only problem is that the voters aren’t yet willing to accept the offer they can’t refuse.

Overall, there’s nothing particularly remarkable about Nolan’s views. They are what would be expected from someone who absorbed the prevailing conventional wisdom 10-15 years ago and hasn’t reconsidered them since then. At least she does a reasonable job of articulating her position.

Looking at Nolan’s bio, it’s representative of the more able section of our political class these days – straight from university (where I assume, but don’t know, that she learned the ropes in student politics) to a couple of political advisor jobs, then into Parliament at an early age (at the time the youngest woman elected to Queensland Parliament, according to Wikipedia), and early promotion to a ministry. Particularly in Queensland, it’s natural that she went for Labor rather than LNP: more urban seats, more friendly to women and more completely dominated by career politicians.

For those of us who don’t think much of the diminution of government power that deregulation has brought, what lessons can be drawn here?

First, I think, that despite the awfulness of Campbell Newman, those of us who refused to support the Bligh government were right to do so. Only by making it clear to Labor that embracing market liberalism is a path to electoral oblivion is there any hope of pushing them to provide an alternative.

Second, Labor needs to reform itself so as to ensure that career politicians like Nolan are the exception rather than the rule. Affirmative action has done a great job in ensuring gender balance in Labor’s Parliamentary representation, to the point where this balance is probably self-sustaining. What is needed now is affirmative action for the people Labor is supposed to represent – members of working families. I’d suggest that future Labor candidates shoud be required to show a minimum requirement of five years working in paid employment (excluding political advisor and union official jobs[2]), a small business or raising children.

Third, this shows the necessity of keeping up public debate on issues of more relevance than the decades-old indiscretions of Abbott and Gillard, and at a serious philosophical level, rather than the kind of trivial Tweedledum vs Tweedledee pointscoring that dominates the news. In this respect at least, Nolan’s essay is a welcome contribution.

fn1. I met her on one occasion at an official event when the government was in office, and heard some of the same anecdotes first-hand. This is one of the rare occasions I’ve actually had such direct contact with politicians, beyond handshakes and chitchat at awards events and the like.

fn2. In the old days, this requirement wouldn’t have mattered for union officials, since almost all of them got their start working in the trade or industry whose workers they represented. These days, lots of union secretaries and presidents have never worked outside a union office. Craig Thomson (not a typical example in most respects, but with a typical career path) went straight from university to an industrial officer job.

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