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Ideology shows tangible benefits

THE 20th century was more intensely ideological than all preceeding centuries, except perhaps those of the Reformation and Counter-Reformation era that gave rise to Christendom’s many dissenting faiths.

Communism, fascism, and corporatism, which former Premier Brian Burke favoured, became significant ideological forces, plus the blossoming of what left-wingers call capitalism, that is, free enterprise.

Each is a markedly different economic order.

With the collapse of communism in Eastern Europe in the late 1980s, a trend that had begun shortly before, in Margaret Thatcher’s Britain and named privatisation, received an unexpected kick-along.

Communism’s backers and non-totalitarian socialists immediately went onto their back foot as privatisation spread worldwide, even having an impact in distant WA.

Not coincidentally, in 1990 new Labor minister, Geoff Gallop, took-over a portfolio that he named ‘microeconomic reform’.

Here Labor, once a socialist party, still couldn’t bring itself to using the word privatisation in a ministerial title, opting instead for new speak .

But, in those dying days of the Lawrence Labor Government, Dr Gallop started – even if only just – what the Court Government fulfilled by selling-off many socialised agencies, including WestRail Freight, BankWest and Alinta Gas.

The worldwide privatisation wave produced another word ending with ‘tion’ – corporatisation - which sought to put public enterprises onto long-established private sector managerial principles.

WA’s public sector encountered both ‘tions’.

But did Western Australians benefit?

Those with a leftist outlook will undoubtedly say no, while their ideological counterparts will say yes.

But who’s right?

Objective national assessments now exist, making it possible to answer this question.

They’re carried in a just-released report of the Federal Productivity Commission titled, Trends in Australian Infrastructure Prices 1990-91 to 2000-01.

This 300-page report assesses prices and other impacts on removal and reformation of regulated sectors by the adoption of competition, corporatisation and privatisation.

Sectors considered are: electricity; gas; water and sewerage; urban transport; ports; rail freight; and telecommunications.

Consider some of its conclusions.

“In most capital cities real metropolitan household electricity prices were lower in 2000-1 than they were in 1990-1. The exceptions were Adelaide, Hobart and Canberra,” it says.

“In NSW and WA, declines in real household prices occurred in metropolitan and non-metropolitan areas.

“Falls in real business prices have been larger than the decline in real household prices.”

On gas prices it says: “In WA real prices for metropolitan customers declined by 7 per cent over the study period.”

The transport picture isn’t as clear-cut.

“In all capital cities real urban transport prices were higher in 2000-1 than they were in 1990-1,” the report says.

“In all capital cities real metropolitan taxi prices were higher in 2000-1 than in 1990-1.

“Increases in taxi fares were generally lower than the increases in the remaining urban transport fares.”

On ports, including Fremantle, it says: “Between 1990-1 and 2000-1, port authority charges for container ships fell in real terms for the ports of Sydney (53 per cent), Melbourne (52), Brisbane (24), Fremantle (20), and Burnie (17).”

On rail freighting: “Between 1996-7 and 2000-1, average rail freight charges for the transport of wheat from the silo to the port has fallen in real terms in NSW (22 per cent), Victoria (20), Queensland (17), SA (16), and WA (9).

“The real price of telecommunications services in Australia fell by more than 20 per cent over the period 1990-1 to 2000-1, or an average of 2 per cent each year.

“During the period of part-ownership [of Telstra] – 1997-8 to 2000-1 – returns on assets has averaged 21 per cent compared with 13 per cent for the period of full public ownership 1990-1 to 1996-7.”

However, not all telecommunications benefits can be attributed to corporatisation or partial privatisation, since there were dramatic technological advances during the 1990s.

Notwithstanding this and the far-from-desirable picture in urban transport, Western Australians must be judged as having markedly benefited from abandoning long-standing entrenched direct government involvement – generally monopolies – in these utility areas.

This contention isn’t ideological. It’s based on exhaustive statistical analysis of trends in prices paid by consumers for these essential services.

Thankfully Maggie Thatcher listened to those in her Conservative Party who pressed for privatisation, which Wet Conservatives claimed would be unpopular. Australian socialists of all shades and Wet Liberals and Nationals promoted the same view.

Let’s also not forget President Ronald Reagan’s uncompromising across-the-board stand against communism, and General Secretary Mikhail Gorbachev, who realised communism was clapped-out and that the long-suffering Soviet subjects deserved better.

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