Written By: - Date published: 11:58 am, November 17th, 2008 - 90 comments
Categories: national/act government, public services -
Tags: local government, roads, Rodney Hide, water
As you’ll have read, John Key has made ACT leader Rodney Hide his Minister of Local Government. So, what’s ACT’s local government policy?
Commercial activities are best performed by the private sector because they have more incentive to innovate and deliver better services. Local government should progressively shed ownership of its commercial activities.
Local government should be confined to the core activities that produce general public benefits, such as regulation, flood control and roads.
Local government will be required to shed its commercial activity, thereby eliminating the need to separate regulatory and commercial functions between local and regional councils.
Roads and piped water will be supplied on a fully commercial basis.
Require councils to focus on their core functions.
Ensure there is much greater scrutiny of regulations that undermine property rights.
Lower the cost of complying with the Resource Management Act and other regulatory regimes.
Promote contracting out of many council services.
So, contracting out, privatisation of public assets and the commercialisation of water and roads. Is this the change people had in mind when they voted for John Key?
UPDATE: Herald journo Martin Johnston has done a good piece on ACT’s radical plans here.
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Ok, as I stated John Key would open up this country to his banking parasite mates.
I didn’t think he would do it so soon and so openly and even though he does not make the deals himself it is clear that his policies are about the banksters and what they can get their hands on never the less.
Rodney Hide gets to do JK’s dirty work for now but mark my words; everything being sold off will be sold off to his parasitical banking mates.
Have a read: Why Big Banks May Be Trying to Buy up Your Public Water System
And be afraid, be very afraid.
Good link Trav.
If there is a drive to privatise water here, my hope is that there will be a tsunami of opposition. The first time the privatisation bandwaggon rolled out, people were caught unawares and didn’t fully comprehend the consequences. That is no longer the case.
‘Everyone’ knows that privatisation leads to poorer service, rundown infrastructure and more personal expense.
What’s that saying? Fool me once, shame on you. Fool me twice, shame on me.
BTW. Anyone know the status of the Water Pressure Group? Their web page was last updated in 2002. I’m thinking there might be a lot of useful info there regardless and perhaps an organisational blueprint that can quickly be adopted by others if the need arises.
Bill
“‘Everyone’ knows that privatisation leads to poorer service, rundown infrastructure and more personal expense.”
Rubbish it is dependent on what is being privatised, how many players are in the market and the rules and regulations that surround any privatisation that comment is as non sensical as someone saying that
,, nationalisation leads to poorer service, rundown infrastructure and more personal expense.”
It’s more of the right/left ideology of one system fits all circumstances which is fundamentally flawed.
Hi Bill,
I happen to speak with Penny Bright of the “Water Pressure groups just a day before the election on an entirely different action. She is suing JK for his lying about the amount of transrail shares he possessed.
She’s a tough old bird and ready for action.
HS,
Do yourself a favour and read the link about Banks buying water systems with their worthless inflated digital junk. The moment we have signed the contracts that system will collapse. And they’ll old the deed to our water.
HS
Would you care to give examples of public ownership becoming privatised that has not resulted in the said privatised entity being bought back again because it was run into the ground?
I don’t want examples where it may not have happened yet, but examples showing that private ownership of previously public assets can categorically be said to not lead to a buy back (partial or full), or a public financed bailout.
Water, rail, electricity, banks, car manufacturing, air lines……these would all be counter examples.
“It’s more of the right/left ideology of one system fits all circumstances which is fundamentally flawed”
Fundamentally flawed ’cause the market and capitalism are fundamentally flawed? I agree if that is what you are implying.
Ooh oops wrong thread, my apologies.
That means that thousands of Kiwi’s will read me calling him a liar.
But Ev, no-one reads your blog.
If he’s innocent of lying about his relationship with Andrew Krieger at some stage perhaps he will call me on that.
What a remarkable lack of self insight, Ev, to think that the Prime Minister has nothing better to do than address your delusional fantasies expressed through your barely-read blog.
EV has a sense of self-importance that is bordering on hysterical.
Bill
British, French and NZ Telecom, British steel, Volkswagen, British Gas, Auckland International Airport etc etc etc.
There have been notable failures as well hence my point that sometimes privatisation is appropriate and sometimes it isn’t and that we need to look at these issues on a case by case and sector by sector basis.
AS an aside I’m not in favour of privatisation of water services in NZ until I hear a compelling argument to convince me it would be a good thing to do.
Bill
Firstly – Telecom, Works Infrastructure, GSB, Contact, Petrocorp, Wellington Airport, Auckland airport, Capital Properties, Trustpower, POSB, Health Computing Service, NZ Shipping Corporation, Rural Bank, National Film Unit, NZ forests, State Insurance, Tourist Hotel Corp, NZ Liquid Fuel Corporation, Export Guarantee Ltd, Government Printing Office, Housing Corp Mortgage, Government Computer Services, commercial operations of RNZ – If you are like me you probably have forgotten the govt even owned half of them and wonder why it ever did.
Secondly – None of the businesses bailed out by govt had to be. THey were political decisions taken for a range of reasons. Plenty of other businesses go to the wall without the world coming to an end.
HS and insider.
Your examples are all individual company examples rather than broader industry ones. As such they don’t do much to advance an argument for private ownership. The industries they are examples of have been industries privatised to be later bailed or brought back under public ownership. (Steel, telecommunications, automobile industry…)
That was why I gave a list of counter examples by industry rather than individual companies. Point me to an industry ’cause an individual company is not a categorical example of private takeover of public assets being a successful strategy.
Maybe there is a reason that publicly owned assets never absolutely need to be taken over by private enterprise, that the takeover is driven by profit motives only and accompanied by a lot of politicking?
Bill you were given what you asked for
“HS
Would you care to give examples of public ownership becoming privatised that has not resulted in the said privatised entity being bought back again because it was run into the ground?”
But if you want to potter off down another track to try and justify why private ownership is always bad when two of us have provided multiple examples to show that is demonstrably not the case feel free.
But Bill you are setting impossible conditions with false propositions, and you are conflating global and national issues.
You label whole industries as having had to be brought back under public control, yet they haven’t. Neither the NZ nor the global steel industry is, nor is the auto industry, or telecommunications, to quote your examples. Many of those industries were never state owned in the first place, or if they were it was because there was no diversity in the industry, eg NZ steel. But there are plenty of examples of whole industries running quite nicely without any state participation and where we would say it was absurd for the state to play a role.
Bill’s point is valid, even if it could be better articulated.
A key driver of competitive advantage in any particular infrastructure market is – can that Infrastructure be readily replicated, or substituted? If not, the infrastructure owner has a strong competitve – even monopolistic – position in that particular market.
If you take Telecom as one example, while some core infrastructure (the local loop) can not be easily replicated, it is easily substituted. There are probably a number of factors why Telecom has not continued to be a cashcow for overseas investors to suck money, that came from Kiwi pockets, out of the economy. One major factor however is the competition that Telecom faces from substitution technologies such as mobile, internet and VOIP.
None of your references (apart from Telecom historically) are to monopolistic positioned companies, being that there were either existing competitors or no high barriers to competitor entry. (The only example that comes close are the airports, where there is vigorous competition although not exactly in the same (geographical) market. You could have similarly mentioned ports – although as we have seen with Auckland vs Tauranga, despite some monopolistic position geographically there is none the less intense competition.)
This is not the case for infrastructure such as electricity and water. It simply is not possible for competitors to replicate the lines or pipe infrastructure and get economic gains. (Something I wish Key would think of as he plans to replace all Telecom’s copper with a government-funded network). Nor are there technologies that allow substitution for the traditional delivery mechanism for water or electricity to the premises.
See my comments above HS and Insider – get off the privitisation bandwagon touting generic slogans, and discuss what specific problems you would expect to fix, and specific outcomes to produce, in a specific market, by a privitisation programme. Specifically you might want to offer some comprehensive arguments on the actual thread topic supporting privitisation of domestic water supply – if you have any.
And please don’t come back with simplistic statements of “competition is good” (there will be none) or “it will be more efficient” (without competition, why should it be?)
Timewarp
You twat – I am not on the privatisation bandwagon shouting slogans.
I stated the following……..
Bill said
“‘Everyone’ knows that privatisation leads to poorer service, rundown infrastructure and more personal expense.’
I said
“Rubbish it is dependent on what is being privatised, how many players are in the market and the rules and regulations that surround any privatisation that comment is as non sensical as someone saying that
,, nationalisation leads to poorer service, rundown infrastructure and more personal expense.
It’s more of the right/left ideology of one system fits all circumstances which is fundamentally flawed.”
And followed that by
“As an aside I’m not in favour of privatisation of water services in NZ until I hear a compelling argument to convince me it would be a good thing to do.”
Fair enough. Apologies for the broad collective response, and for the confusion arising from your support of privitisation within a thread on water supply.
Time Warp
Pretty much what HS said. one extra though
“This is not the case for infrastructure such as electricity and water. It simply is not possible for competitors to replicate the lines or pipe infrastructure and get economic gains.”
Not completely true. Telecommunications in NZ is replete with examples of parallel infrastructure. That probably reflects the (former?) huge margins on telecomms and growth potential as opposed to electricity.
No problem TW apologies for calling you a twat.
Insider, now I think you have misread me.
Telecomms does have parallel infrastructure, agreed. Hence my points about substitution, and that it is a market that benefits from competition.
It didn’t at initial privitisation, therefore my comments about profits going overseas at the expense of Kiwis. Back then Telco margins were huge, now on core services they are not (eg read the media comments on Kordia’s recent results being dragged down by it’s acquistion of Orcon).