First, this episode confirms that privatisation is political poison in Australia, as is shown both by opinion poll evidence (links to come on this) and by election results in NSW, Tasmania and elsewhere. The more experience people have with privatisation, the less they like it. When you have the National Party celebrating a victory for people power, the point is pretty obvious.
Second, while the promoters of privatisation have criticised opponents as emotive, the case in favor of privatisation was made up in equal parts of emotive appeals to ideology and economic illiteracy. Ideologically, privatisation was assumed by its advocates to be a Good Thing, with no attempt to identify, let alone quantify, any concrete benefits in the case of Snowy Hydro. Economically, this was (I hope) the last outing of the idea that selling income-generating assets “frees up” or “unlocks” cash that can then be spent on schools, hospitals and so on. If the asset is sold for an amount equal to the risk-adjusted present value of expected future earnings, there is no change in the government’s fiscal position. In practice, higher risk premiums in the public sector and the absurd restrictions on ownership that are usually part of deals like this means that the government ends up worse off, not better off.
Coming to the arguments against, the “iconic” argument is indeed emotive, but not necessarily the worse for that. If it’s paying its way, why shouldn’t we keep ownership of an asset like the Snowy in the hands of the public sector that created it?
In any case, there were substantive arguments against privatisation that weren’t effectively answered. We’re in the middle of trying to sort out what to do with the water in the Snowy-Murray system, and not making a really good job of it. The last thing we need is to have a private company (probably with foreign owners who can appeal to the protection of the US-Australia FTA) with large, but still poorly-specified, entitlements to use the water or receive compensation for changes in use.
Finally, there are some big losers from the cancellation of this deal, namely the banks and financial institutions that would have had a cut of it. To that group can be added the politicians involved, whose prospects of highly-paid post-political jobs in those same banks have just taken a nosedive.