I’ve been opining in all sorts of media on the Queensland government’s asset sales programs. A couple of general points, both favorable.
1. The government has said that the sale process will take 3-5 years, and that the assets won’t sold if the offers are inadequate. They need to be held to this
2. The privatisation story has swamped the abolition of the fuel subsidy. At some level, I think everyone recognises that this program was at best an unaffordable luxury in the current environment, and at worst a counterproductive and damaging misuse of public funds.
Coming to the asset sales, and with a whole day to reflect on a $7 billion program here are my provisional views
Good: Queensland Forests. State forestry has never made commercial sense, since the timber industry has always had effective control, ensuring no proper return on the public capital investment. There were moves towards reform, but plenty of obstacles. Easier to let a private buyer set commercial prices
Bad: Queensland motorways. Toll roads are bad, private toll roads are worse. We need a comprehensive system of road pricing, with congestion as the main driver. The existence of privately owned toll roads is a huge obstacle to this goal
Ugly: QR coal freight and coal terminals. There are potential gains here, but there are also some huge traps, as illustrated by disastrous rail privatisations elsewhere. And there will be a lot of problems with wages and working conditions to be sorted out. I don’t think the government will be able to get away with using privatisation as a backdoor route to large-scale redundancies, but a sale with union conditions attached will have obvious problems
Indifferent: Port of Brisbane. A regulated monopoly asset with secure returns. Selling this and using the proceeds to repay debt doesn’t really change anything but perhaps it will fool Standard and Poors.
John Quiggin 
good thing they waited until the market was totally deflated. it would be terrible for the Our New Private Monopolist Overlords to get ripped off.
Is the Queensland Treasury Corporation being flogged off too?
An asset that makes a profit in most cases is one that the government should hold onto – for long-term financial gain. That will enable governments to provide more services/lower taxes in the long-term.
Interesting how, despite the alleged collapse of the free market, the ALP look to the free market for a bailout.
QR is the most efficient railway system in Australia. It’s coal operations are miles ahead of anything in NSW. It’s utterly bemusing to me that the Queensland government would want to sell off its most profitable assets.
QR’s revenue last year was 2.3 Billion dollars and the Queensland government wants to sell it for 7 Billion. What a joke.
Bobalot, assuming your figures on QR are accurate, that makes the sale of QR an absolute disgrace!
The neoliberal tightwad agenda just goes on and on doesnt it? Doesnt matter what party – libs or labor. Doesnt matter what the majorityn of Australians think either. There is a really major disconnect happening between the Australian people and its governments.
I have a few questions for the *cough * expert economists.
The assets being sold off include Queensland Rail’s (QR) coal business, and the Abbot Point Coal terminal, north of Bowen. And guess who is building a 490 kilometre railway line and a two-berth export terminal at Abbot Point?
Yes, Clive Palmer, arguably Australia’s richest man, who also happens to be suing Anna Bligh for a million dollars.
So has Clive Palmer, the man who bankrolls the failed rightwing Liberal National Party, just bought the supposedly lefwing Queensland Labor Party Government? Looks like that to me.
Or will Clive’s mates in the Chinese government be buying up the state? And if so, is that “Socialism” we can believe in? Jeez, I’m confused!
Forget the ideological debate. I just don’t see how selling off all your public assets during a massive global downturn can be a good thing. Unless maybe it gets you off the hook in a $1 million lawsuit?
Or does privatising these things under Clive’s nose mean he has to pay exorbitant prices to buy them, or else pay someone else for the privilege of using them (as they would have him by the cojones).
Alice #6, it’s not just Australia, have you seen what’s happening in the UKGB?
When both parties in a two-party system gravitate towards wherever the money is, then wherever the money is becomes “The Centre” and it’s even easier to manufacture consent for whatever the people with the money want.
Why do you say that toll roads are bad and that congestion should be the main form of rationing roads?
Here’s my guess at what John’s answer might be:
Whether tolls divert cars from the new to the old road will depend on the price of the toll compared with the time and stress saved from driving on a less congested road without traffic lights. Some people will choose the ‘free’ congested option, others will pay for a faster ride.
The effect of congestion on the old routes is to divert cars from the old road to the new.
There is a good debate on congestion currently raging over at the ALS blog.
http://blog.libertarian.org.au/2009/06/02/queensland-fuel-rebate/#comments
Very please to see forestry being privatised. It is a really very obvious decision that should have been taken long ago. I hope NSW follows Queenslands lead some time soon.
A correction:
‘…abolition of the fuel subsidy. At some level, I think everyone recognises that this program was at best an unaffordable luxury in the current environment, and at worst a counterproductive and damaging misuse of public funds.’
It is not a subsidy, it is a tax collected for all states except Queensland (until now, that is). In other words, additional tax will be collected.
So I guess Timbercorp and and Great Southern whatevers were,say only a few weeks ago,and not like privatisation at all!? I guess selling a government owned asset off is worth more than a private investment thing around dodging government tax, to keep the assets maintained as assets! Oh! And fires! That wouldn’t happen in sunny Queensland at all! And without fuel subsidies the business people want parity with world oil pricing!? Trains…..who ever heard of back loading coal trains..say moving water,converting coal to other stuff,moving aluminium around from places to other places via empty coal trains! And rail lines,flat as pancakes could carry massive numbers of solar panels,and by electronic sensoring move off the lines to let the train and bogeyed trucks through.And who as ever heard of recycling timber sleepers and rail line for say,bridge making and concreting!? And who has ever heard of moving completed rail systems if the demographics suggest they are now in the wrong place,and convert such that remains for motor cyclists,bikers and scooters,and build the rail lines somewhere else,if it duh um, rains in Queensland. And why not solve traffic problems where there are pipelines above ground by further concreting so you can zoom over them.And what about striving for Australian population ownership use and exploitation of forests,by asserting the taxpayers rights,and teach how to run the resultant business entities through education facilities,thus the taxpayer would have a Service enlightened by direct use and Administration. The Palmers’ of the world are not the problem,they surely can accomodate the requirements of the citizenry to have a fair go about Australian assets,and thus organize but of their attempts to reduce risks for thecitizenry by two distinct levels of investment,but, not administration.Why does the owning of the means of production imply competing with those who finance investment in the means of production.!?Surely if more Queenslanders owned the assets more directly,as a citizens right from birth,rather than it being administered away from the majority at birth,then the end result will be a a greater sense of citizenryship and ownership. I have avoided the question mark ,after all this is a Professor’s site,I am not a Queenslander,and share and share alike can be applied to the use of statements without a question mark at the end of them.
<emI hope NSW follows Queenslands lead some time soon.
you wish. I’m also glad plantations have been sold, a more commercial focus is needed by both NSW and Qld.
The basic issues that are being downplayed are democracy and accountability.
The Queenslander public, and not Anna Bligh, are the owners of these assets.
If Anna Bligh and Andrew Fraser are so confident of the merit of their case, they should be prepared to put this to the public at a referendum.
In any case, whether by design or incompetence they denied Queenslanders their democratic right to decide this question at the recent needlessly early and needlessly short state elections, by neglecting to inform Queenslanders of their plans.
So, if they are not prepared to put privatisation to a referendum, they should withdraw. I have written of this in an Open letter to Anna Bligh, which I e-mailed to every member of the Queensland Parliament.
To sell assets without the consent of the owner, particularly when the owner has made his/her collective opposition to the sale emphatically known, is theft.
Those wishing to help prevent this theft should attend protests at the Queensland State Labor Party conference, particularly the protest to be organised by the ETU on Sunday at 11 AM outside the South Brisbane Convention Centre.
What a mystery. Why would a Labor government want to put heaps of “working families” on to the dole at a time of a rising unemployment ?
Why would peforming assets be sold at a time off falling prices, if this is economic “rationalism” (what, indeed, about “economies of scale” )?
I suppose it will come back to the info supplied by Gandhi, along the lines of a QLD version of Tasmania’s John Gay and Gunns usurping control in that state awhile back.
Why are politicians always so eager to stab the people who trusted them in the back and to enthusiastically and obstinately choose something destructive in preference to something constructive?
No answers to my previous question? Too complex?
Ghandi – watch the law suits against Bligh and Fraser dissappear. You are spot on. He has been bought off by Bligh and Fraser and will snap up some nice assets for bargain base prices. That is simply all this about. Bligh and Fraser don’t want defamation suits of which I hear the cases are solid. End game- they’ve sold out QLD to save their careers. This truly is the biggest disgrace in QLD political history.
Steve, Ghandi?
Under what legislation could he possibly threatening to be suing Bligh..let me guess some sort of private trumps public legislation whereby corporations can sue governments for some sort of loss of business access, if they dont privatise these assets.
Well – when the public assets are all gone and unemployment is perpetually higher there could be a rethink on the stupidity of assuming that this country has enough private interest and investment to keep the majority employed.
When governments are forced to impose higher taxes (as they should be now on the wealthy) to deal with budget deficits (when there is no assets left to sell and no income streams from profitable assets and those pesky infrastructure costs are still there).
‘Under what legislation…’
Common law of defamation, Alice. It’s paid for many a politician’s and lawyer’s beach house or extension over the years. In Queensland it has particular resonance as a means of silencing political debate. The Fitzgerald report had a number of things to say about it.
“He has been bought off by Bligh and Fraser…”.
Who he?
PM – I think they mean Clive Palmer?
I note that the South Brisbane branch of the Australian Labor Party has voted unanimously for the expulsion of Anna Bligh from the Labor Party.
See report in the Courier Mail.
Good on them!
At least some in the Labor Party still have backbones.
Yes it sounds like it. Clive has been delivered some tasty (and cheap and possibly nasty) assets via Bligh and Fraser and in return the defamation cases be gone! Only one way to find out, when are they scheduled to appear in court?
If anyone wants to know the story behind these words in the editorial in today’s Courier Mail:
Madonna King put the question to Andrew Fraser on my behalf and mentioned my named during the interview. It was the one attempt by the ABC to raise this issue during the whole of the election as far as I am aware, and an extremely lame attempt at that. I have written of this in “Brisbane ABC suppresses alternative candidates in state elections despite listener dismay with major parties” of 30 Apr 09.
As far as I am aware, I was the only candidate who contesting those elections, who anticipated the outrage that is now unfolding before our eyes and attempted to do something to prevent it.
If anyone here is going to the state ALP conference this weekend and intends to stand up to the Bligh/Fraser junta please read articles at candobetter.org/QldElections, where you should be able to find ammunition that will help you to tear them to shreds.
I’m uncomfortable with people indicating that there is some sort of payoff going on between Bligh and Clive Palmer. I think that very unlikely. Labor – as a government – are acting as you would think, selling assets to bolster income. They have been hopeless, and support the wealthy over the vast mass of the people. But that is normal for Labor, there is no need to see conspiracy, and I don’t think Bligh has demonstrated any sort of personal financial dealings that deserve being thought financially corrupt. The corruption of power is far deeper and more subtle – it is a corruption of values and perception.
(Cross-posted to Larvatus Prodeo)
I think the fuel subsidy is a bad idea, but they have no right to break this promise in the way they have.
People must not allow this to be used as some kind of bargaining chip that would in any way sweeten the outrage of the asset fire sale.
The dishonesty is beyond belief.
—
Has anyone got a copy of the Courier Mail?
I couldn’t locate the story about Bligh’s own branch calling for her resignation. (I will have another look at it when I get it back off my neighbour.) I would have thought that such a sensational story deserved to be on the front page.
Having briefly slapped the Government on the wrist for its blatant deceit, in a short article by Steven Wardill on Thursday and in yesterday’s editorial, the Courier Mail is now running full steam ahead in its uncritical clamouring for privatisation.
Thanks for the replies. Given that $1 million aint what it used to be, and presumably the ALP (i.e. the taxpayer, eventually) would be paying the lawsuit, not Anna Bligh, I would tend to agree with Nanks:
“I don’t think Bligh has demonstrated any sort of personal financial dealings that deserve being thought financially corrupt. The corruption of power is far deeper and more subtle – it is a corruption of values and perception.”
But indeed, I would be very surprised if that defamation case doesn’t magically disappear now.
Rudd Labor’s close ties to China also merit some thought when it comes to this privatisation. I am hardly a nationalist, but I am amazed that the idea of Australia’s biggest mine being called “China First” has not received more scrutiny from the popular press. Twenty years after Tianenmen Square, we’re all pro-Beijing, right?
(Cross-posted to Larvatus Prodeo)
So, the Queensland branch has carried (60%/40%, I gather) a “motion acknowledging that the sales are going ahead”, thereby raising the white flag before the Bligh/Fraser junta.
What a disgrace!
I would like to see how those 60% of conference delegates justify their shameful surrender before the trade unionists and ordinary workers that they’re supposed to represent, not to mention the broader Queensland public, who were never told of these privatisation plans at the last election, and who are every bit as opposed to privatisation.
So, did anyone else here attend the protest against privatisation today?
There should definitely be another at the opening of Parliament on 16 June.
Am I the only person here who is capable of grasping what has occurred in Queenlsand last weekend? Am I the only person here who cares?
Sic transit gloria in blog comments, dagget. LOL
Amazing today to see the Borg calling the unions “a gutless bunch of fairies” because – wait for it! – they don’t OPPOSE the privatisation.
Meanwhile, QLD electricity prices are going up $55 a quarter, just approved by the Qld Competition Authority. Who remembers Peter Beattie promising that nobody would be worse off under privatised electricity?
I am interested also in the privatisation of Forest Plantations Queensland too. At first it sounds positive, why is government in the business of that anyway? However in the hands of a particular multibillion dollar company currently eyeing it off? Anyone who doesn’t see that as a disaster for the environment and any move to green jobs may need to have a think.