My piece in yesterday’s Fin (over the fold) was about the failure of Telstra (or, more fairly, telecommunications policy) to give us even late-20th century standards of broadband service. Meanwhile Joshua Gans looks at how Telstra talks to regulators when it’s the underdog.
Make Telstra public again
Following Australian telecommunications policy is like watching one of those horror movies where the protagonist insists on going down the staircase into the cellar, even though everyone in the audience can see that disaster awaits. Or perhaps it more like Groundhog Day, where the hero relives the same bad day over and over again. Looking at the current crisis over Telstra, it’s striking that, despite the massive technological changes of the past decade, the same policy issues are being debated and the same mistakes are made.
The most salient example is the protracted sage of Telstra’s proposed privatisation. It was obvious to anyone who cared to look that the idea of partial privatisation, commenced by the Howard government in 1997 (in emulation of previous privatisations on this model undertaken by Labor) was a recipe for conflicts of interest, and for the creation of a regulatory nightmare.
As Treasurer Peter Costello said in early 2000, barely two years after the T1 sale,
If Telstra is going to be caught in a position where it is half privately owned and half government-owned, I don’t think that is going to be a good outcome. Telstra should all be either privately owned, or if people really think that nationalisation and government ownership is necessary they ought to have the courage of their convictions and nationalise it.
More than six years later, Telstra is still half-private and half-public and it seems inevitable that, even if a sale goes ahead, a substantial share of Telstra will remain in public ownership through the future fund. Certainly, there is nothing in the record of regulatory policy to suggest that full privatisation would work well. So Costello’s own logic would suggest that he should be advocating renationalisation.
But the debate over Telstra’s ownership is of secondary importance compared to the more fundamental problem that telecommunications policy has failed to meet the needs of telecommunications consumers or Australia as a nation. We lagged badly in the initial provision and take-up of broadband, and now seem certain to fall even further behind as other countries move to high-speed Internet technologies based on optical fibre all the way to the home.
More than ten years and several communications ministers ago, it was evident that poorly designed telecommunications policy was promoting investment decisions driven by considerations of corporate and regulatory strategy, yielding outcomes that were not in the national interest. The biggest example then was the race between Telstra and Optus to roll out duplicate hybrid-fibre coax cable networks, covering half the country, leaving everyone else to wait a decade or more for decent broadband access.
As I wrote at the time
the future of communications, and most notably the rapidly developing Internet, lies in digital networks based on optical fibre … the more progressive telecommunications companies in the United States are already discarding HFC in favor of building optical fibre ‘up to the curb’’ … The resources being wasted in providing duplicate analog networks could have made Australia a world leader in the development of digital telecommunications networks.’ (Pay TV’s wasted billions, Australian Financial Review, January 8,1996).
A decade later, with Japan and other countries already delivering fibre to the home, allowing high-speed Internet traffic for both uploads and downloads, Telstra finally came up with a proposal to roll fibre out, but only as far as local nodes. But, this was a mere bargaining chip in Telstra’s corporate regulatory strategy, to be withdrawn when the regulator did not give the right outcome.
So, apparently, we are supposed to rely on the second-class option of stretching ADSL technology to its limits, in the hope (contradicted by Telstra’s own statements on the subject) that the copper-wire network will stand up to the strain.
It’s time for the government to face up to its responsibilities for our national infrastructure. Telstra should be brought back into public ownership, and required to construct telecommunications infrastructure to meet national needs.
The first step in this process is that the government should take its role as majority owner seriously, and appoint a board and CEO committed to acting in the national interest. Peripheral assets like the Foxtel stake should be sold off. And the Future Fund could be used to buy out shareholders who would prefer a company more focused on short-term profits.
Australian telecommunications policy has been stuck in the same endless loop for a decade or more. If the horror movie we’ve seen so far is to have a happy ending, we need to turn around and head back upstairs.
John Quiggin 
James,
Your last paragraph would concern me if it were true. Fortunately, it is not – or at least there is no evidence I have seen that it is true. If you have that evidence then I suggest you publish it, rather than simply allege incompetence and criminal activity, the second of which may be a libellous allegation if unfounded.
The rest of your points I have dealt with ad nauseum, so do not propose to do so again – and, as I said, the Telstra debate is lost. It has gone the way neither of us prefer, so I do not want to waste my breath or time debating it.
Andrew,
We are engaged in a bloody war that has cost the lives of as many as 650,000 Iraqis according to one authoratitive source, that being a study in the British Medical journal Lancet. At the time the war was launched in 2003 John Howard assured us that the threat posed to world peace posed by the regime of Saddam Hussein was such that immediate invasion was necessary. Yet, in the years prior to that, John Howard and his Government allowed $300 million worth of bribes to be paid to that same Government that he held was such a mortal threat to world peace.
If that is not gross incompetence and negligience then what is? Does anyone on the planet actually believe John Howard and his ministers are that incompetent?
It’s interesting that such an avowed democrat as yourself apparently thinks that it is appropriate for Australia’s notoriously anti-democratic defamation laws to be used to prevent discussion on this critical issue.
Of course, yet again, none of the substance of my posts have been addressed, and I don’t expect this to change no matter how long you choose to prolong this discussion.
You shout over and over again that John Howard’s election in 2004 is the sole answer to any objections to the way that he is now (mis)governing this country, yet when I show concretely how the Australian public were deceived during that election campaign, you want to look the other way.
James,
Correct me if I am wrong, but on the prolonging stakes, I think the fault, if there be any, lies more with the one reviving the debate.
Interesting you bring Iraq into this debate, but i would make two points here.
1. There is no evidence the government knew it was being paid. If you have it I think several major news outlets would love to have it and I suggest you produce that evidence.
2. The rights and wrongs of the Iraq invasion are being debated elsewhere – but again, I have seen no evidence the government was lying in any of the information they gave us prior to the invasion. Wrong, yes (and plainly), but not lying. The difference is important for your argument.
On the defamation point – I am not using those laws, I have no authority or standing to do so and, despite several points where you have made possibly libellous statements about me I have no intention of using them. I was merely pointing out the possible legal consequences to you of you continuing down the path you are taking. It is up to you then to make any choices you intend to make – but please make them informed ones.
As for you last paragraph it is, again, arrant nonsence. I have not “shouted’ anything – I very rarely shout at all. I do object to many steps taken, as do you – I suspect you object more – and I do push for changes in the government’s program, but perhaps not in ways you would agree with. This, as with everything, has to be tempered with realism. I know we are not going to get a free banking system with private currency issue any time soon, so I do not push for it.
You, likewise, are perfectly free to continue to shout as loudly as you want (just, please, not outside my room during the night) for whatever causes you believe in. I will not stop you nor even try to do so. I just suggest you are wasting your time on this one. I may be wrong and you may be able to scream loud enough to change government policy – but somehow I do not think so.
Sun Tzu was right in saying “He who knows when he can fight and when he cannot will be victorious”.
Thats a real pity. I’d love to see an end to private currency prohibition.
Terje,
I did not see you at the thread of doom on catallaxy.
Andrew,
You wrote: Sun Tzu was right in saying “He who knows when he can fight and when he cannot will be victorious”.
If you are doing all of this to promote your own ideological agenda then I can hardly stop you, however if you are doing this to save me from expending my efforts needlessly, then your own efforts are not appreciated.
As much as you would have us all believe that the issue of privatisation of Telstra is dead and buried, I don’t agree. Whether or not John Howard and his Government are held to account for what they are now doing has important implications for the future direction of this country and, in particular the 2007 elections.
You are clearly uncomfortable with the facts of the unconscionable means employed to get John Howard re-elected in 2004 as I have explained above and the similarly unconscionable means employed to have privatisation and other facets of the neo-liberal agenda achieved again and again, in spite of clear overwhelming public opposition in the past two decades, and that is why you refuse to discuss them.
Nevertheless, it is a situation you would prefer to continue in the 2007 elections and indefinitely thereafter.
Anyone who takes the trouble to read what you have written in this thread and elsewhere will see a stark contradiction with that and your claims to profoundly democratic deep down.
My Apologies. The end of the last sentence in my previous post should have read: ” … your claims to be profoundly democratic deep down.”
James,
I would be very comfortable with a system that ensured that everyone understood the plain, unvarnished truth and a full democratic mandate. I believe that this would result in a minimal government and the greatest possible freedom for all, with no government run businesses of any kind. If it did not, I would be similtaneously surprised and disappointed but also accepting of the outcome.
As you, rightly, point out the current system does not allow for that plain, unvarnished truth to come out. I would contend that all sides of politics are guilty of this, with the two parties being most likely to attain government (i.e. those with the most to lose) being particularly guilty. Examples of this were not difficult to find (again, on both sides) at the last election and, indeed, in every election.
Politicians, as I have pointed out many times, are fully aware of this and are also aware that, should they say something that is true but unpopular, it tends to count against them. The “best” politicians are the ones that tell the truth and answer questions straight. These ones also tend to lose elections. John Hewson was a great example – he lost to the ALP in an election where he put the party program up front only to have Paul Keating, on the best possible interpretation, misunderstand and misrepresent what was in there – which he, from memory, tacitly admitted on leaving office.
Like your response to the last election, I was deeply disappointed in this outcome. I felt that Hewson was a truly liberal leader, whereas Howard is a true conservative and, in all, a nowhere near as good a leader for this federation of ours. We have to live with that.
That said, and despite the lack of complete candour on both sides at the last election, I feel the outcome was the best possible for Australia, particularly given Latham’s deceit around his own suitability as leader. Fortunately, we did not get to see what deceit they may have been guilty of on the policy front.
You may choose to see what I believe to be a realist POV as a belief that I am not profoundly democratic deep down. I believe you are a believer in democracy – but someone who has not truly thought through the consequences of the sort of democracy you are advocating. We can either keep or change our own views and, provided we impose no force on each other, I would not have it any other way.
That was a bitterly disappointing election result. It was pivotal in forging my opposition to compulsory student unionism. I was outraged that my student fees were spent on running such a nasty and emotive campaign against an honest broker offering a real set of alternatives.
Actually, I don’t recall anywhere that Hewson was misrepresented in that campaign. Please give examples. He planned to introduce a GST and slash Government services as I recall. The campaign by the student assocations,trade unions and other community groups against Hewson was the closest thing to a grass roots campaign that has ocurred in years.
Even Sam Neil flew back to hand out Labor how to vote cards.
The least memorable aspect of the campaign was Keating’s repetitive, carping, disingenuous one-tracked attack on Hewson’s GST. At one point in the campaign he cynically threatened to support the GST legislation in the Senate if Labor lost government. In fact, the GST, as odious as it was, was not nearly as feared as Hewson’s threats to cut back Government services.
The real losers of the campaign were those who voted Labor. Keating immediately betrayed the hopes they placed in him. He broke his promise in regard to retaining half Government ownership of the Commonwealth Bank, naturally with the support of the opposition, who have cynically exploited it to this day. Also, when he found that he could not implement his stupid “L A W” tax cut promise that he should not have made in the first place, the fate of his Government in 1996 was practically sealed.
In that campaign, he, together with Howard, colluded to conceal the “Beazley black hole” from the electorate, each for their own cynical motives. For Keating, it was in a futile attempt to cling onto power. In Howard’s case it was so that he would have a ready made excuse upon winning government to break his promises not to savagely cut services.
Upon losing in 1996, Keating immediately resigned from Parliament, abandoning his supporters to face Howard’s attacks on their own.
Years later, Keating, of course, came out on at least two occasions I can recall to support the full privatisation of Telstra and on at least one occasion to praise Costello for the supposedly great job he had been doing as treasurer.
James,
Interesting that your third paragraph contradicts your first. Hewson was not misrepresented, but the attack on GST was disingenous?
Paragraph 2 is interesting too – Sam Neill is a Kiwi.
I would, however, completely agree that the losers were those who voted Labor.
Andrew,
I say that Keating’s attack on the GST was disingenuous, because, he, himself, supported a GST a few years earlier. Also to restate what I wrote in that post: Keating threatened to allow the GST to be passed if he lost the 1993 elections. The fact that he has since lent his support to the full privatisation of Telstra even though he claimed to be against it in the 1993 election and that he tells us that Treasurer Peter Costello, who helped introduce Howard’s GST, has done a magnificent job, would also casts doubt on the sincerity of his stance against the GST in 1993. I can’t see why that should not have been obvious.
None of the above, however, means that the case against the GST was not sound.
I heard that Sam Neill did hand out how-to-vote cards for the Party in that election even though he came from NZ. Not that pertinent I will have to admit on second thoughts, but I am far from alone here in that regard.
—
Regarding your statement: “Examples of this were not difficult to find (again, on both sides) at the last election and, indeed, in every election.”
This is yet further obfuscation on your part regarding my point that the Australian electorate were deceived into voting for Howard in the 2004 elections. Please give examples of anything the Labor Party did in 2004 that matches the deceit employed by the Howard Government and the Liberal Party.
And where was Latham deceitful about his own abilities to lead? He did remarkably well in the circumstances with the media baying for his blood and so many on his own side undermining his efforts right up to the last. He had Howard on the back foot almost to the end. He beat Howard in the one televised debate that Howard agreed to that was conducted on John Howard’s terms.
The biggest failing of the Labor Party in the 2004 elections was not to have countered the lies of the Liberal Party advertising campaign. The failure of ALP staffers, who were delegated this responsibiity by Mark Latham is well documented in “The Latham Diaries”. If they had countered the lies, Howard would not be in power today.
If you have no serious concerns about the conduct of those elections, that’s fine, but, in my view, it is not consistent with a belief in democracy. (Nice of you to say that you think I am a believer in deomcracy, but I find myself unable to reciprocate.)
Actually,
If I had known how Keating was going to deliver his supporters, bound hand and foot, into Howard’s arms in 1996, I would have voted for Hewson myself in 1993.
James,
Keating plainly (to go further than I have before) lied about the GST. Even if you think it was bad policy, Keating plainly did not. The fact that he opposed it showed that he was lying.
Latham has the media eating out of his hand for the first few months – it was almost sickening the way he was fawned over. I think the reason some turned against him (he had plenty of support right up to polling day) was purely down to their assessment of his leadership abilities. I was on the polling booths on election day (I think you an guess wo for) and the thing that had many people turning up and saying “I was going to vote Labor, but that Latham fellow – no” was the handshake in the corridor with JWH a day or two before. People looked at him and saw the thug they thought he had banished on assuming the leadership.
His subsequent behaviour shows this was a missed bullet. The pathetic self-justification in his book just emphasises the point. Latham ran the last campaign, much to the frustration of his political advisors, whom he largely ignored, so trying to blame them for the failure is really laughable.
On the deceit question – as I said, we never got to see where Labor had lied (or changed position once in government on a more charitable view of this sort of behaviour) this time as they did not win. On previous occasions they have changed position – remember the no CGT and no FBT prior to the 1983 election and many other examples during the period to 1996 (you give the LAW tax cuts) – so trying to claim that this was unique to JWH at the last election really does not cut it.
Andrew,
I have explained many times before that I am not into the game of defending dishonesty by the Labor Party by pointing to dishonesty by the Liberal Party. Perhaps, for your part, you should stop hiding behind instances of deceit by Labor politicians that are, in any case, almost ancient history by now, in order to excuse the dishonesty of this Liberal government which seems to know almost no bounds.
In any case the beneficiearies of this dishonesty are invariably your side of politics, as have demonstrated. And where deceit may have momentarily, arguably served the interests of my side of politics, by, for example, possibly stopping an even more right wing Government from coming to power as happened in 1993, the benefits are usually short lived, and it nearly always proves to be counter-productive in the longer term. I doubt if many of Keating’s own supporters would be thanking Keating for what he did.
Let’s not forget that much of Keating’s deceit in 1993 was employed to implement John Howard’s own agenda, including the full privatisation of the Commonwealth Bank and the 1996 Telecommunications deregulation legislation, drafted by Labor and then enacted by the incoming Howard Government. This paved the way for partial, then full privatisation.
Let’s not also forget that Keating had privatised nine out of the twelve public enterprises that were on Howard’s 1986 hit list.
Howard’s conduct in 2004 and since has taken the practice of democracy and accountability in this country to hitherto unheard of depths, particularly with the extravagent $54 million taxpayer-funded campaign to indoctrinate the public into supporting a policy that was not even put to them at the previous election, that is “Work Choices”.
That you won’t discuss or acknowledge any of this shows that you only support democracy when it delivers outcomes that suit you.
—
Regarding the handshaking incident, that was provoked by John Howard almost crushing the hand of Mark Latham’s wife earlier, as you should well know.
Please provide me with some concrete examples of Latham’s “pathetic self-justification” from the Latham Diaries some time.
I wrote:
… then Andrew wrote:
You argue that it’s OK for John Howard to have lied in 2004 elections, because … ?
… because Labor also lied in that election campaign.
I ask where and all you can say is that we can’t know, because they didn’t win office. We just have to take your would for it that they would have.
Given that a Labor Government would have broken its promises, we can hardly object to this Government having broken all its promises and having introduced all kinds of legislation that no one was told of in 2004, can we?
Your logic is infallible.
James,
If you can point to where I have said you should not object, please let me know. Otherwise, I believe I have only said that it is pointless to maintain a lot of effort in your opposition to a plan that has been enacted and will not be overturned – at least in the short term. Fight whatever fight you choose to, James. As I have said – it would be against my principles to even try to stop you.
I have never said it was OK,James – it is merely the way politics is fought. It is on of the reasons why I believe the less power politicians have, the better. If you choose to fight to give them more power I will continue to fault your logic, but I will not try to stop you.
Andrew, you wrote: wrote : “… I will continue to fault your logic, …”
I don’t see where you have. I would suggest to you that there are quite a few points I have raised that you have yet to repond to. Of course, I won’t hold my breath waiting for that to happen.
The Government has cheated the public in order to be able to do now what it knows perfectly well the public doesn’t want.
Whether or not the damage that is now being done can be undone easily, or at all, in a healthy democracy, elected representatives, who treat their constituencies in this way, should be held to account for having done so.
James,
The logic I will continue to fault is that you continue to point out where the government has got it wrong (in your opinion). You seem to believe that the government should also have more power – but in almost the same breath you castigate them for being deceitful. If you cannot see the disconnect there then I am truly wasting my breath.
On to your other points.
The reason why true deceit by Labor politicians is “almost ancient history” is clear – it has been a long time since they were in power. OTOH, you yourself have pointed to numerous points where your own State (Labor) government have been either wrong (again in your opinion) or deceitful. With those, I would agree. So – where does this get us? Lord Acton again – “all power tends to corrupt, absolute power corrupts absolutely”. Take the power back – not even democratically elected representatives can be fully trusted; so don’t do it.
As for “my side” being the “beneficiaries”. You seem to imagine the whole economy is some enormous zero-sum game, with any decision giving only winners and losers. If this is wrong please correct – but if this is the case, it is nonsense. Most of the privatisations, if not all of them, have greatly increased overall welfare. If you can point to one where there have not been sustained reductions in prices I would be surprised, and then point to the rest where there have been. Prices in real terms, I mean. Profits have also increased, resulting in better returns to my super funds – about which I am also happy.
Again, on the last comment you go for the logical disconnect. It is because governments are run by people and are subject to sacking only every 3 years that they should have less power, not more.
You parade that I occasionally miss one of your missives – sorry, but you have not yet once come back with a reasoned response to just that one point.
A market gives feedback on performance every minute (or second) of every day. A political process only once in 3 years. I know which I prefer.
Andrew,
You accused Labor of also employing deceit in the 2004 elections in order to excuse the deceit by John Howard . “Examples of this were not difficult to find (again, on both sides) at the last election and, indeed, in every election.�
I asked you to substantiate this and you didn’t.
You stated that The Latham Diaries is full of “pathetic self justification”.
I asked for substantiation, and again, you didn’t.
So, now it now turns out that after thirty-odd more posts that none of what we have been discussing is important. Now you tell us, after all this time, the only thing that matters are your other trump arguments which you claim I have never addressed.
I have shown many times in other posts how market forces have demonstrably failed to look after our interests and are indeed threaten our environment the very future of our society. I have given many examples of privatisation has clearly made matters worse for the public: water privatisation in The United Kingdom, South Africa, and Bolivia, Electricity in South Australia, public transport in Victoria, The Commonwealth Bank and Telstra itself.
Even if you can’t see how these have harmed the public interest, the overwhelming majority of the public do.
Furthermore, as I have shown, the advocates of privatisation have never, in all these years, had the courage of their convictions to argue their case with opponents of privatisation before the public. And if they ever did, they certainly would not have got very far if they had employed the sort of sophistry that you have employed in these threads.
I am not going to spen more of my time in order to take up your challenge to demonstrate the truth of what I have written. I know that this can be done, and has been done many times by others, even in terms of the narrow bottom line accountancy approach that you demand.
But why shold I bother, when you refuse to acknowledge the other facts that I have taken the great trouble to present above in this thread?
You wrote:
What you are saying that if a particular Government deceives the public, as the Howard Govenment demonstrably has, in order to give away ownership and control of publicly owned assets to private investors, then neither that Governmernment nor any other possible future alternative Government can be trusted to use its powers to use its ownership of that asset to serve the public interest.
This ‘argument’ is plainly childish and stupid and I won’t dignify it with any further response.
You are indeed wasting your breath, and everyone else’s.
Very well – we will take this as a waste of breath. You plainly trust that there is, somewhere out there, some
mysticalgovernment that will get it right. The fact that none has ever been found seems to be neither here nor there to you. Oh, well – on to the next thread.Oh, and look what came up first when I googled “Latham” “Control Freak”:
https://johnquiggin.com/index.php/archives/2005/09/21/latham/
I see that the news of privatisation, just keeps getting better and better:
… and now:
… and here’s another privatisation success story :
Mussolini got the trains to run on time. Why can’t we? by Kenneth Davidson in The Age, 9 Nov 06
Amazing. Connex couldn’t manage to run a service out of Flemington for about an hour after the last race on Derby Day on Saturday. On Melbourne Cup day I caught the train from Flinders Street to Surrey Hills in the early afternoon. The carriage was filthy with tinnies and the floor sticky with stale alcohol from the night before.
Obviously the franchisee didn’t employ cleaners at midnight to ensure the carriages were reasonably clean for passengers using the trains on cup day. The performance of Connex during the peak of the spring carnival suggests the franchisee is more interested in maximising its profits than in customer service.
Stuff happens. But the increase in the number of cancellations and late trains over the past year and the number of trains out of service last week, detailed by Opposition transport spokesman Terry Mulder, show systemic neglect.
The system of franchising Melbourne’s tram and rail system has failed. All that has changed is the taxpayer subsidy to keep the service has doubled since privatisation. This should be a red-hot election issue.
…
James,
And all that at Telstra while still under the controlling ownership of the government. Bring on privatisation.
Quick question under the second one – did the trains always run on time and were clean under the full control of the government? I do not know I do not catch the trains in Melbourne. In Perth, the buses are certainly better after they were put under the partial control of private firms.
Andrew,
I thought you said you were leaving this thread.
By all means don’t if you have something new to add to this discussion, and I have to admit, that, for once, you have with your last post.
However, somehow, I don’t expect that this will be the start of a trend.
Have you yet realised, how your last post contradicts itself?
On the one hand the appalling and worsening behaviour of Telstra since partial privatisation is all attributed by you to the fact that the Government still has a controlling stake in Telstra and on the other hand you attribute the claimed success of the bus firms which are under partial private control (and presumably also under partial government control) to the partial private control.
Andrew Reynolds wrote:
… Another childish intellectually dishonest argument that I am constantly foced to waste time in order to deal with on this on these kinds of threads. Anyone with the least bit of nous should be able to see that what is driving this unconscionable behaviour is being driven by the imperitive to increase the rate of return on shareholder value.
If Telstra had not had to answer to those shareholders, and was, instead, accountable to the Australian people as a whole, it would not be necessary for it to be removing pay phones, axw 12,000 jobs over the next five years, and it would have simply got on with the job of building a national broadband network long ago as the “return on investment” would have been overwhelming and self-evident to everybody.
No-one but a complete fool, or else someone with personal vested interests in Telstra’s full privatiation, could possibly hold that full privatisation will fix these problems. Even John Howard doesn’t believe that they will.
I am not going to get into a debate about Mussolini’s regime. Take that up with Kenneth Davidson. The fact is that Melbourne public transport is a crock, as Kenneth Davidson has shown, thanks to Kennett’s privatisation and Bracks’s failure to reverse it.
Can’t comment on Perth, but every privately run public transport service I have ever seen has been woeful, and that includes Western Sydney and Toowoomba.
The Japanese commuter rail system was mostly privatised in the 1980s. It is now regarded by many as the best public rail service in the world.
The following article gives a good overview of why British rail privatisation failed to deliver for the public and why Japanese privatisation was a success.
http://www.libertarian.co.uk/lapubs/econn/econn091.pdf
In short the answer has to do with the regulation that accompanies privatisation and whether private owners are free to improve their property or are hamstrung by too many rules. Comparisions with Telstra seem relevant.
Terje,
Here’s one article that doesn’t conform to the view that privatisation has been a success in Japan: Privatisation caused the Japanese Rail Disaster from http://www.labournet.net.
Can’t yet comment on the article at http://www.libertarian.co.uk/lapubs/econn/econn091.pdf . Perhaps you should show, with suitable quotes from the article, how the supposed lessons drawn by a proponent of privatisation from the failure of privatisation of British Rail can concretely be applied to to stop the disaster of Telstra’s privatisation which is unfolding before our very eyes and which nearly every informed observer expects to get worse rather than better.
James,
You said it was a waste of breath – I agreed with you, finished up and then you came back with more. Again, who is guilty of persisting with the thread?
Perhaps we should also point out that most industries that we now see as being government owned were established in the private sector with all of the really hard work of establishment being done privately. Government then moved in, bought them (frequently under compulsion) and then proceeded to to bring them down. Now they are being returned to the private sector after they have failed to work well in the public sector they are frequently hidebound in regulation, as Terje correctly points out.
Who’s fault, therefore, is it if they do not work the way that James would like? Persuming he is even open to the idea that it is possible that private business should play a role in the economy.
Whilst the telegraph service in Australia was mostly pioneered by the government sector, voice telephony was most definitely pioneered by the private sector. In fact the industry was nationalised in no small part because it threatened the telegraph monopoly.
I can’t see much profit in killing your customers. It generally makes your service less popular. And it is not as if we have not seen rail disasters under public ownership.
Would that convince you? I doubt that I would achieve much. The article is offered merely to counter your assertion that privatising public transport appears to be a bad thing. Clearly it depends on many factors not least of which is the burden of regulation and the freedom to innovate and improve assets.
Terje wrote: “Would that convince you?”
It’s not about convincing each other. I don’t expect Andrew or yourself to ever concede that you are wrong, and I think it is very unlikely that you will ever convince me that I am wrong. However, I still think that these discussions can be useful out there for others, with open minds, who wish to weigh up the evidence on this issue.
I don’t, and never have, seen Governments as uniformly perfect. It is possible that where Governments are particularly bureaucratic, undemocratic, unaccountable and secretive, that a particularly well managed private corporation can do a better job. However, the weight of evidence in recent decades has been precisely the reverse. If you turn out to be correct about the Japanese Railways, this would only be a very rare exception in a sea of privatisation disasters.
In any case, given the sheer size of the Japanese commuter market, any half competently managed organisation, whether Government or private should not have a great problem in operating it well and at a profit, at least whilst the necessary stocks of fossil fuel and other non-renewable resources required to run the railways remain avaiable.
The solution to unsatisfactory management of government owned enterprises is not to hand over ownership and control to unelected corporations, but, rather to make the enterprises, and indeed, governent itself, more open, democratic and accountable. Of course, some insist that this can never possibly happen, and then, paradoxically, also do their level best to ensure that it never does happen.
James,
I agree that good big government is better that bad big government. And I think privatisation is a marginal issue of far less significance than other possible reductions to government such as substantial tax reduction.
I hope you will agree that there are badly organised privatisations and well organised privatisations. Unfortunately in taking a philosophical position we are both unable to control several factors associated with execution. If Telstra is to be privatised I would prefer that the job was done well. Just as if it was to remain a public entity I would prefer it to be well run.
For the interested third party I would suggest they take a look at the article I linked to.
Regards,
Terje.
Andrew, you wrote:
“You said it was a waste of breath – I agreed with you, finished up and then you came back with more. Again, who is guilty of persisting with the thread?”
It’s a waste of breath if you engage and prevarication and obfuscation, make unsubstantiated statements and refuse to acknowledge facts presented by others or fail to add new ideas or information to the discussion.
Whilst the issue of privatisation is far from dead, your capacity to shed any new light on this question appears to have largely vanished months ago.
We are doomed in the months to suffer the terrible whilwind that full privatisation will unleash, and all this needs to be openly discussed, particularly prior to the 2007 elections.
i meant to write in the last sentence of my previous post: “We are doomed in the coming months …”
James,
Strange – I was thinking the same thing about you.
To me, you are missing the contradiction inherent in your argument. On one hand you say because the polls have shown that a majority of Australians oppose something that it (what ever it is) should not happen. In other words, the vast majority of people cannot be wrong. Yet, in your environmental argument, you strongly argue that the majority is wrong in that we are living our lives in a way you regard as unsustainable. In other words, by their revealed actions, the majority is wrong.
Can you explain this apparent contradiction and, answer the question on whether you would oppose the privatisation of Telstra if it were popular to privatise it?
James,
If you do not have time to read Terje’s link, at least try these two. You may understand better where I am coming from. As John Humphries makes plain there is a lot of difference between we who believe in individual liberty, but they may help:
Link 1
This one should help re Hayek –
Link 2
Andrew,
I don’t really see how my views on overconsumption of natural resources have any bearing on the Telstra privatisation debate. The number of people opposed to privatisation is likely to be greater, at the moment, than those who would choose to reduce theire ecological footprint. However to acknowledge that doesn’t mean that we shouldn’t argue that people should reduce their ecological footeprint. I think that argument can be won in a fair and open discussion, unlike the case for the privatisation of Telstra.
Also, thanks for the links.
Read both of them, the first more carefully than the second. This may be unfair, but it is not obvious to me that these ideas have any basis in the physical world around us, and it is not obvious to me what light they shed on the debate about the privatisaion of Telstra.
Andrew Reynolds wrote: “Strange – I was thinking the same thing about you.”
Then why engage in a discussion with someone who “engage(s) in prevarication and obfuscation, make(s) unsubstantiated statements, refuse(s) to acknowledge facts presented by others or fail(s) to add new ideas or information to the discussion.”?
Again, the issue of privatisation is of ongoing concern to all Australians. Whether we can undo the damage I believe this Government should be held to account for the consequnces of its actions. That is why I raise these questions in forums such as these.
I am not going to be told by you that the issue is finished :
If you think that the debate is over then fine. Just please just go elsewhere. I don’t need to months of my life arguing facts that should be as plain as day to any compassionate thinking person.
You gave the game away in your post in which you cited the example of Perth where “the buses are certainly better after they were put under the partial control of private firms.” In that same post when you had said:
So, in the one post you tell us that if a partially privatised entity is run badly it must be the fault of the Government, but on the other hand if a partially privatised entity is run well it must be the the result of private management.
Clearly, any argument will do as long as it serves to promote your ideological agenda.
James,
I engage in this discussion for enjoyment and intellectual exercise and in the hope that I may learn from it. Why do you?
Personally, I gain little from the privatisation of Telstra. What I do want to see is a better country for my decendants and other Australians. I see the way to do this as being through allowing them to decide for themselves their own way in life – not carrying forward debts from past generations and allowing them to interact with anyone they choose to. A government enforced monopoly I see as running directly contra to both those aims.
If you choose to believe that through some mechanism a government monopoly will be more efficient and give more choice than a competitive private market that is up to you – just do not expect me to believe it without some incredibly strong evidence.
I take it you have not done me the courtesy of reading either og the links I gave you – very well, it is up to you. I hope you do not mind if I include a quote from one, though:
This would be a true reform agenda and one I hope future generations of Australians will work towards. I do not believe it is (yet) the reform agenda of either of the major parties.
Andrew, you wrote wrote:
I don’t think so. Very little I have written in any discussion has any noticible impact. Every question, no matter what the facts at hand may be, always one simple answer: leave everything to the free market and price signals.
It seems to me that you aren’t interested in an exhcange of ideas. It seems that you simply want to shout down any viewpoint on this thead which doesn’t conform to your world view.
Andrew, you wrote wrote: Why do you?
Explained many times before.
You wrote: “I take it you have not done me the courtesy of reading either of the links I gave you …”
I said:
I would have thought that the rollout of cable broadband which could easily have been done long ago, if Telstra had been wholly government owned and not subject to the requirement to maximise its bottom line only in the narrowest finacial sense wouild have been the best way for Government to have “maximise(d) an anonymous individual’s chance of achieving his unknown purposes” in this regard. Instead, millions of Australians are made to needlessly miss out for many more years to come, because Telstra managers only see that they will achieve a sufficient return on shareholders investment in providing ADSL2+ where competitors already provide it and don’t see any in rolling out FTTN broadband.
By the way, where Mark Latham was accused of plagiarism on 22 April 2004 was where he had, seemingly unwittingly, borrowed Bill Clinton’s stated policy of making broadband Internet connections available to every single American, regardless of economic status. (This wasn’t explicitly explained in the diaries, but I remeber the controversy in the newspapers at the time.) I dopn’t think a single fair minded Australian would have begrudged such plagiarism on Latham’s part, if that indeed is what is was.
You should take the trouble to read “The Latham Diaries” some time and then you might come to understand that in him we did a have a political leader who truly wanted to maximise every “anonymous individual’s chance of achieving his unknown purposes” although not at the expense of other anonymous individuals.
And perhaps you would bring yourself to finally admit that your claim that his book was an exercise in “pathetic self-justification”, for which I have repeatedly asked for substantiation, were groundless.
James,
Have a look at my comment 172 on Latham. If you need more, let me know.
On Telstra, to me the reason why we hav enot got the fast broadband is simple – Telstra has a monopoly to protect and does not have to do this. I will leave you to ponder why they have a monopoly in the first place.
The Australian market in telecoms is badly skewed and has been since it was nationalised. That is why I have clearly advocated it should have been broken up before being sold. As a second choice, privatisation (with competition allowed) is the next best with the worst option (IMHO) being to continue in the situation which caused this mess in the first place. To me, you are advocating the worst option, which is why I disagree with you.
I haven’t seen any really new aspects to this debate in over a decade. This discussion included.
Andrew,
I had already read the thread on Mark Lathams’s diary and the “Enough Rope” interview and I have read the transcript of the interview itself. Some of Mark Latham’s expressed opinions and actions since he resigned as Leader of the Labor Party may have been ill-advised, but in the circumstances I consider them understandable. In any case, they shouldn’t detract from what he achieved as opposition leader and he should be congratualted for the way he tried to change the culture of Australian politcs for the better and for having exposed so much of the truth of what goes on in our political system in his published diaries. Again, I say:
—
Your explanation of why we don’t have broadband is utter garbage. Any government with the political will to do so, and which had not been constrained by any need to have to make the whole world conform to the dicates of neo-liberal ideology, would have long ago got on and directed Telstra to roll out a comprehensive braodband network for all Australians.
How could that have possibly been worse than the current cirmcustances? Try telling that to any of the millions who are still denied access to decent broadband connections.
Given that the “pathetic self-justification” is a subjective view, it is difficult to prove – as is your view that seems to place him on a pedestal. Given that, it is simply a matter of showing that others shared this view to show that it is plausible, which may or may not increase its weight in your mind.
To argue from authority is a weak argument, but on subjective opinion it is all I can do short of doing a full book review here, which I have neither the time nor inclination to do.
Some, suggested links are:
Polemica which does contain many useful links to other reviews – most of which share my view.
Andrew Norton on Catallaxy
A good book review also helps – try here.
As for the broadband roll-out; a government direction to give it to everyone regardless of the cost would have been as silly as a direction to give it to no-one. Yes, it could have been done better and I maintain it would have been done better if the dead hand of government control was not there. May that hand be removed ASAP and give us a proper market.
The government could allow a broadband roll out right now by calling off the ACCC. Telstra would be pulling fibre up and down our streets tomorrow if not for government interference and over regulation.
Terje,
You talk like Phil Burgess moaning about how all the problems of rivate telephone corporations, whether they be “US Worst”, “Qworst” or Telstra, can all be laid at the feet of intefering Government regulatory authorities.
Just remember, Terje, the majorities who passed the full privatisation legislation in both houses last year, included a good many who were adamant that a private corporation coould be regulated to run just as well in the public interesst as if it were government owned. The silence on the part of those people now, in the face of Telstra’s ongoing open defiance of the ACCC and the government is deafening. For our part, our group “Citizens Against Selling Telstra” always maintained that a reglated privatised corpartion was a second rate alternative to outright government ownership and our stance has now been sadly vindicated.
Your statement that lifting the yoke of regulations will automatically ensure the rollout of fibre optic cable is very sweeping.
Just which streets do you imagine will get fibre optic cable?
Just the streets around where you live?
What about outerlying suburbs? Regional areas? Rural areas? Poor areas?
What is to stop Telstra from gouging monopoly profits from the streets in which it lays cable, if not regulation? Or do you think that other companies should duplicate the laying of cables so that there can be competion?
Could the cost customers would need to ultimately pay for duplicated cables possibly be cheaper than Telstra gouging monoply profits from its customers? And why would it not have been cheapest of all to simply have the cables laid everywhere by Telstra as a publicly owned enteprise that was not required to extract the absolute maximum possible amount of revenue from its customers?
It seems to me that your last post could bear some further explanation.
—
Andrew wrote “As for the broadband roll-out; a government direction to give it to everyone regardless of the cost would have been as silly as a direction to give it to no-one.”
You know perfectly well it doesn’t have to strictly be one or the other.
Why do you insist on persisting in wasting everyone’s time with these intellectually moribund straw man arguments?
Also, are you going to acknowledge and apologise for the other black and white example of your intellectual dishonesty that I exposed earlier. If you don’t, then why should I be expected to treat you seriously in this discussion?
No-one is asking you to ‘prove’ that Latham engaged in ‘pathetic self-justification’. I just want to see examples of what you regard as ‘pathetic self-justification’.
I could certainly very easily overwhelm this site with many examples of ‘pathetic self-justification’ from your beloved Prime Minister John Howard. Why won’t you do the same in order to substantiate your accusation against Latham?
It seems to me that the reason that you won’t is that you can’t find any that will withstand scrutiny by any reasonable and open minded person. Rather, they would be more likley to conclude, as I have concluded, that Mark Latham was spot on in most of what he wrote in his published diaries.
Fascinating “black and white” example. Because one privatisation has succeeded in its aims and one (in your opinion) has failed does that mean I am being intellectually dishonest if I point it out? Balderdash.
On Telstra – I was not constructing a strawman. I did not ascribe the view of putting it nowhere to you. I was illustrating the ridiculousness of your (seeming) conviction that the government should direct Telstra to give everyone broadband. It should only go where it makes sense to put it – satellite already covers the rest. The only downside on satellite is the upload speed and the ping lag, something most can deal with.
On your (seeming) hero, Latham – again, read the links. There are enough bully and bluster in there (from Latham) for you to read about. If all you wanted was an example there are more than enough in those links. The second half of the Polemica piece contains even more examples than I could remember. Spot on? Answer all of the Polemica arguments.
As for JWH – I think it was actually you who admonished me some time ago for calling him “Little Johnnie” (I may be wrong, if so, apologies) – I am content he and the Liberals beat Latham and the ALP at the last election but that hardly makes him my “beloved”. Read any of my comments about him anywhere and you will see my real attitude towards him. I challenge you to find a single instance where anything I have said about him could be construed as hero worship – or even admiration. Just one – that is all. He is a conservative politician – ‘nuf said.
I have answered you on Latham, do me the same courtesy. I will not hold my breath.