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pietillidie
Joined: 07 Jan 2005
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| Post subject: The real leaners: Yet another BS privatised monopoly |  |
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Yep, more competition-hating, communist frauds dressed up as "businesspeople" are poised to get their filthy hands on natural monoploy government assets.
Having just been to Sydney and experienced the excellent Manly ferry service a good half a dozen times, this is an effing disgrace.
But don't expect your "conservative" (cough, cough) buddies to stand up for the market. They hate the market; it gets in the way of their sense of entitlement.
Great article:
| Michael West in The Aged wrote: | Monopoly money sinks economic theory
Contrary to conventional economic theory since the time of Thales, who cornered the market for olive presses in western Anatolia in the sixth century BC, another Australian government is poised to transform a competitive market into a monopoly.
No, it is not the privatisation of the Royal Australian Mint, or the spin-off of the corporate watchdog's company register, which are both in train. Plopping the latter trove of public information into the hands of a private monopoly should ensure that the public pays even more for its own information (which it paid for in the first place anyway).
We are talking about boats.
Commuters on the northern beaches of Sydney have been enjoying two fast ferry services operating between Manly and Circular Quay in recent years. These have been both efficient and low-cost.
Now, however, a tender is looming to deliver the concession to a single operator. The state will not say how much it might get for selling this asset, but it insists it will be good for consumers.
Some may question how scrapping competition and bestowing a monopoly upon one operator could possibly be good for consumers. Not this correspondent.
We now know that our overlords have embraced an economic theory so radical, so visionary, that nobody else has thought of it yet.
Until now, traditional economics has had it that competition encourages businesses to compete for customers. There are two ways in which they compete: quality and price.
And right now, there is quality of service by the two fast ferry operators at a decent price. So why bust up something that works?
"Offering the service to one operator will give that operator the certainty needed to be able to invest in the service and deliver better results for customers," says Transport for NSW.
As explained to another citizen who inquired: "We want a better outcome for customers. As an example, all customers will use the main wharf at Manly which is sheltered from the elements."
This is a compelling argument. Natural phenomena such as the weather are factors far too often ignored by the imperfect science of economics. In the event of a tsunami sweeping through Sydney Heads on a north-westerly trajectory, it is quite plausible that customers may be better off taking the bus. This may also be the case during a blizzard, or if the earth was being bombarded by fiery meteors.
"The tender process is set up with the customer at the forefront of our minds," says the government. "The new operator will be required to provide a minimum level of service that is at least equal to the combined service levels of both of the current operators."
The state appears to have gleaned inspiration from its federal government peers who have a penchant for delivering their citizens' belongings into the warm embrace of monopoly operators.
Sydney Airport for instance, again named the worst airport by the Australian Competition and Consumer Commission this year, also enjoys the first right of refusal over Sydney's second airport. A double monopoly with cream.
To be fair, Sydney Airport has delivered a handsome return for some taxpayers; those who are also directors of corporate entities in low-lying Caribbean islands, own shares in the airport trust and do not have to pay tax.
As for the incessant complaints, service levels at Mascot are at least on par with Toncontin International Airport in Tegucigalpa, Honduras, and prices differ marginally from those you might find in, say, Oslo.
So there is fine precedent. Victoria too has its fair share of privatised monopolies, but what is the philosophy? Monopolies are roundly thought to countervail traditional economics and even common sense.
If we look to select African dictatorships, we can find the state awarding special concessions to favoured tenderers. Before the reforms in Bolivia, it was also common practice to provide some entrepreneurs "the certainty needed to be able to invest in the service and deliver better results for customers".
Elements of feudalism underpin this. Stretching back only one millennium, it was de rigueur for political overlords to award special privileges to chosen commercial fiefdoms based on the assumption that they would do the right thing by their vassals. And our neo-feudal approach certainly conforms with the recent declaration by the Commonwealth to reinstitute knights and dames.
Yet the theory is more sophisticated than this. There are strong elements of the type of state monopoly capitalism espoused by Karl Marx, whose doctrine predicted laissez-faire capitalism would give way to monopoly capitalism wherein the state would intervene to protect large monopolistic enterprises from the ravages of competition by smaller firms. Look no further than the Australian Securities Exchange (ASX).
Those who would cry that the state should be busting monopolies, not creating them, fail to understand the benefits conferred by this neo-feudalo-Marxian doctrine. Why do we prop up the banks? System stability. Further, this counter-efficient allocation of resources theory eliminates the scourge of corporate collusion.
If there is only one of you, you are hardly going to collude, except perhaps cerebrally via the intercourse between the left and right sides of your brain.
There are other benefits. This avant-garde policy has enabled us to coin a neologism, even to augment the word that was once the longest in the English language. Our pro-monopoly initiatives can be said to be of the school of pre-antidisestablishmentarian economic theory. |
Read more: http://www.smh.com.au/business/monopoly-money-sinks-economic-theory-20140822-107am2.html#ixzz3BJrQ829Q
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In the end the rain comes down, washes clean the streets of a blue sky town.
Help Nick's: http://www.magpies.net/nick/bb/fundraising.htm |
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Wokko 
Come and take it.
Joined: 04 Oct 2005
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You're heading close to Ayn Rand territory here. Governments giving cronies favours to create monopolies/favoured status is a constant theme through Atlas Shrugged.
Of course your solution is a lot different to her anarcho-capitalist free market but your view on the problem is similar. |
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3.14159 
Joined: 12 Sep 2009
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| Governments giving cronies favours to create monopolies/favoured status is a constant theme through-out NSW politics. |
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pietillidie
Joined: 07 Jan 2005
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| Wokko wrote: | You're heading close to Ayn Rand territory here. Governments giving cronies favours to create monopolies/favoured status is a constant theme through Atlas Shrugged.
Of course your solution is a lot different to her anarcho-capitalist free market but your view on the problem is similar. |
Right, this is where we sound like we overlap.
FYI, I guess I can now reduce my disagreement with Libertarians to two things:
1. Natural monopolies are best run by governments because we have greater direct leverage over elected monopolies than un-elected monopolies. The latter are a step removed from an already tenuous accountability, and what is worse they corrupt the democratic process even further.
There is a line somewhere between competitive and non-competitive markets which is often difficult to discern, to be sure, but one thing is pretty clear: The canonisation of markets is just another religio-fundamentalism.
2. Society is an open-ended game, meaning the quality of the contest is every bit as significant as the outcome of the contest. And that means possession and access are two sides of the very same coin, with the balance between reward and rights just another fine line we have to walk.
Stability begets broad wealth and broad wealth begets stability; there is no Prime Mover argument about it.
_________________
In the end the rain comes down, washes clean the streets of a blue sky town.
Help Nick's: http://www.magpies.net/nick/bb/fundraising.htm |
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3.14159
Joined: 12 Sep 2009
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Government privatises water, what happens?
The price and the corruption spiral.
10 million for a bottle of Grange?
That is a sweet deal especially when it means they a stealing a basic human requirement Potable water!!!
Telecom get privatised, what happened?
The prices went up and we get maintenance issues and end-up making do with an inadequate broad-brand and the prices go up...and up!
(The 4 a billion a year profit that went to the budget bottom line is gone two).
Qantas was partially sold off and what did we get?
A hodgepodge of planes and hair brained schemes like trying to "out seat" every other player in the Australian market and bewildering array of aircraft that cost a fortune to maintain!
The Commonwealth bank.
It goes on and on...
In the 70 Labour brings in Medicare to break the monopoly of private insurers and what happened?
Prices stayed reasonable and medicines became affordable.
(The opposite is off course Obama Care with the USA wishing it had a system like ours).
Government brings in SuperAnnuation to make Super available to all and what happened?
The Welfare bill has dropped from 13% 10 years ago to 10% of the budget this year.
Now they want to destroy the pleasant ride to work many Sydneysiders enjoy with a promise to at least keep it as good as it is (till the unavoidable but urgent need for a fare hike of course).
Give me a government duopoly over this short sighted and blinkered Libertarianism any day!!! |
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Tannin 
Can't remember
Joined: 06 Aug 2006
Location: Huon Valley Tasmania
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| 3.14159 wrote: | | Government privatises water, what happens? The price and the corruption spiral. |
Correct weight.
| 3.14159 wrote: | | Telecom get privatised, what happened? The prices went up and we get maintenance issues and end-up making do with an inadequate broad-brand |
Correct weight. And then we got a government with some balls and we broke the dead hand of the Telstra monopoly with a fast, modern system. Alas the Liberals got back in and are busy wrecking it before it really had a chance to take effect.
| 3.14159 wrote: | | Qantas was partially sold off and what did we get? A hodgepodge of planes and hair brained schemes like trying to "out seat" every other player in the Australian market and bewildering array of aircraft that cost a fortune to maintain! |
Well, no. On the good side, we have vastly cheaper air transport (part of that due to competition, most of it due to improved technology in newer modern aircraft, and a large part of it due to much lower service standards. Australian air transport remains very safe by world standards but it is no longer the best and safest in the world, which it was when Qantas and TAA/Australian Airlines were very high quality government-owned enterprises.
| 3.14159 wrote: | | The Commonwealth bank. |
On balance, yes.
| 3.14159 wrote: | | In the 70 Labour brings in Medicare to break the monopoly of private insurers and what happened? Prices stayed reasonable and medicines became affordable. |
On the whole, yes, but note that the price of medicines has little or nothing to do with Medicaire or private insurance. That is determined by the Commonwealth Pharmecutical Benefits Scheme (i.e., your taxes pay for it, you only pay a little out of pocket) and negotiations with the gigantic multinational drug companies, who make plenty.
| 3.14159 wrote: | | Government brings in SuperAnnuation to make Super available to all and what happened? The Welfare bill has dropped from 13% 10 years ago to 10% of the budget this year. |
No. No about three different ways.
(1) The present super system is not available to all, only middle and high income earners. Many miss out big-time - women in particular get shafted by it, as do all lower income people and many middle-income workers too.
(2) No, no, no. It does not save government money. It costs much, much more than the old pension system. The idea of it was to get rid of the need to pay pensions, but successive governments scuttled that (especially the Liberals under Howard and Costello, but Labor too) and turned it into a truly massive tax avoidance scam. [b]Super tax rorts now cost more than pensions, and nearly all of the tax avoided goes to the wealthy. Today's paper has an article covering one part of this huge financial clustercluck: http://www.theage.com.au/business/the-economy/how-almost-300000-smsfs-avoid-paying-income-tax-20140826-108dpu.html but there is lots more it doesn't get to. See also: http://www.smh.com.au/federal-politics/political-news/its-super-tax-concessions-not-pensions-that-are-killing-the-budget-20140421-zqx7p.html and http://www.smh.com.au/business/banking-and-finance/tax-leakage-multimillionaires-exploiting-superannuation-20140522-38po9.html and http://www.abc.net.au/pm/content/2014/s3989987.htm and http://grattan.edu.au/news/our-super-system-unjust-inefficient-and-increasingly-indefensible/
(3) The superannuation industry is corrupt. Massively corrupt, and their corrupt mates in the Abbott Government have just removed the very modest consumer protection rules introduced by the previous Labor Government. A very, very large slice of the billions of dollars Australians put into super goes directly to line the pockets of greedy, unethical financial sector sharks. Try http://www.macrobusiness.com.au/2014/07/the-great-fofa-gouge/ or http://www.macrobusiness.com.au/2014/07/kohler-slams-the-super-gravy-train/ or http://www.macrobusiness.com.au/2014/06/superannuation-fees-are-far-too-high-in-australia/ or http://www.crikey.com.au/2014/06/24/while-the-government-fiddles-on-fofa-longevity-and-fees-are-the-real-problem/ or http://www.canberratimes.com.au/national/superannuation-time-to-reassess-the-system-20120406-1wga4.html or http://esuperfund.com.au/articles/percentage-fees-in-super.html
| 3.14159 wrote: | | Now they want to destroy the pleasant ride to work many Sydneysiders enjoy with a promise to at least keep it as good as it is (till the unavoidable but urgent need for a fare hike of course). Give me a government duopoly over this short sighted and blinkered Libertarianism any day!!! |
Absolutely!
_________________
�Let's eat Grandma.� Commas save lives! |
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Wokko
Come and take it.
Joined: 04 Oct 2005
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I think some are looking at Telecom through rose coloured glasses. Their service was terrible, archaic and lazy and they had no reason whatsoever to improve on that service. Bringing in Optus was a great thing. I also disagree that creating another government sponsored monopoly on infrastructure in the NBN was a good plan, our price to service is one of the worst in the world due to Telstra holding all the other Telcos to ransom on copper network wholesale prices, I certainly wouldn't trust NBN Co. to act any differently with the fibre network.
That said the NBN Lite of Turnbull et al. is an abortion of a plan that should be flushed away as soon as possible. I might not particularly like Labor's NBN, but the Liberal version is woeful. |
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stui magpie 
Prepare for the worst, hope for the best.
Joined: 03 May 2005
Location: In flagrante delicto
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| Wokko wrote: | I think some are looking at Telecom through rose coloured glasses. Their service was terrible, archaic and lazy and they had no reason whatsoever to improve on that service. Bringing in Optus was a great thing. I also disagree that creating another government sponsored monopoly on infrastructure in the NBN was a good plan, our price to service is one of the worst in the world due to Telstra holding all the other Telcos to ransom on copper network wholesale prices, I certainly wouldn't trust NBN Co. to act any differently with the fibre network.
That said the NBN Lite of Turnbull et al. is an abortion of a plan that should be flushed away as soon as possible. I might not particularly like Labor's NBN, but the Liberal version is woeful. |
i started work at telecom in the mid 80's, I caught the end of the bloated public service era with Z plates on the cars etc before it went from a commision to a corporation.
Some, (Most) of the practices were pure federal public service.
I remember recruiting photographers, whose job it was to go to the exchanges and take photographs of the manual phone metres which then got developed and turned into a bill. The old Step by step and crossbar manual exchange equipment, stuff that took up a 10x10 metre space in an exchange being replaced by something the size of a wardrobe.
Best thing that ever happened was Optus and competition and the realisation that we didn't need to do everything internally from manufacturing to training.
I look at the number of people I knew at Telstra who now work at the NBN co and I'm of the opinion that it was a fundamentally flawed premise to create yet another Government monopoly.
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Every dead body on Mt Everest was once a highly motivated person, so maybe just calm the **** down. |
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Mugwump
Joined: 28 Jul 2007
Location: Between London and Melbourne
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^ Agree Stui, as i agree with the thrust of ptid's OP. In the economy as in football, competition is what really matters. The only thing worse than a public sector monopolist is a private sector one : but where competition is possible, the choice and discipline it brings is the best safeguard of the consumer.
That's why capitalism, unlovely though it is in many ways, has delivered more prosperity to the countries that have practised it than any known alternative.
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Two more flags before I die! |
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3.14159
Joined: 12 Sep 2009
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| Tannin wrote: |
Absolutely!
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Apart from a few points I absolutely agree two!
| 3.14159 wrote: | | Qantas was partially sold off and what did we get? A hodgepodge of planes and hair brained schemes like trying to "out seat" every other player in the Australian market and bewildering array of aircraft that cost a fortune to maintain! |
| Tannin wrote: | | Well, no. On the good side, we have vastly cheaper air transport (part of that due to competition, most of it due to improved technology in newer modern aircraft, and a large part of it due to much lower service standards. Australian air transport remains very safe by world standards but it is no longer the best and safest in the world, which it was when Qantas and TAA/Australian Airlines were very high quality government-owned enterprises. |
Air fares were expense because of the low Aussie dollar.
Opening up routes to competition also helped lower prices.
Neither of these were due private ownership.
Qantas has stated that the high cost of maintaining a fleet of different aircraft IS hurting it's bottom line and the only way to fix it is (according to Joyce) is to open it up to more foreign ownership.
(Like what will happen if Sydney's ferry's become a monopoly..
| 3.14159 wrote: | | The Commonwealth bank. |
| Tannin wrote: | | On balance, yes. |
If you have a balance.
Many honest Aussies have lost their savings due to unwarranted risky financial advice...The figure could run into the $100,000,000's if we ever do have a real investigation into this aspect of private enterprise.
| 3.14159 wrote: | | In the 70 Labour brings in Medicare to break the monopoly of private insurers and what happened? Prices stayed reasonable and medicines became affordable. |
I meant the cost medical treatment not medicines...
1,000 apologies.
| 3.14159 wrote: | | Government brings in SuperAnnuation to make Super available to all and what happened? The Welfare bill has dropped from 13% 10 years ago to 10% of the budget this year. |
| Tannin wrote: |
No. No about three different ways.
(1) The present super system is not available to all, only middle and high income earners. Many miss out big-time - women in particular get shafted by it, as do all lower income people and many middle-income workers too.
(2) No, no, no. It does not save government money. It costs much, much more than the old pension system. The idea of it was to get rid of the need to pay pensions, but successive governments scuttled that (especially the Liberals under Howard and Costello, but Labor too) and turned it into a truly massive tax avoidance scam. [b]Super tax rorts now cost more than pensions, and nearly all of the tax avoided goes to the wealthy. Today's paper has an article covering one part of this huge financial clustercluck...
but there is lots more it doesn't get to. See also: ...
(3) The superannuation industry is corrupt. Massively corrupt, and their corrupt mates in the Abbott Government have just removed the very modest consumer protection rules introduced by the previous Labor Government. A very, very large slice of the billions of dollars Australians put into super goes directly to line the pockets of greedy, unethical financial sector sharks. Try ... |
1. By available to all I should have said much more available and almost mandatory if you are in full time employment.
2. The saving I mentioned was to the welfare budget not general revenue.
Welfare has been taking a lot of budget blame lately and Government Super wroughts shouldn't be added to it!
3. similar to 2. Corruption isn't the fault the ideal.
| 3.14159 wrote: | | Now they want to destroy the pleasant ride to work many Sydneysiders enjoy with a promise to at least keep it as good as it is (till the unavoidable but urgent need for a fare hike of course). Give me a government duopoly over this short sighted and blinkered Libertarianism any day!!! |
I like ferries and I'd hate to see their fate fall into the wrong hands.
Last edited by 3.14159 on Wed Aug 27, 2014 10:20 am; edited 3 times in total |
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3.14159
Joined: 12 Sep 2009
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Last edited by 3.14159 on Wed Aug 27, 2014 12:40 am; edited 2 times in total |
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3.14159
Joined: 12 Sep 2009
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Tannin
Can't remember
Joined: 06 Aug 2006
Location: Huon Valley Tasmania
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| 3.14159 wrote: | | Super is saving money paid in Pensions! |
I'm afraid that the facts disagree with you. Super is not "saving money paid into pensions", super costs the taxpayer more than pensions and most of the money super costs the nation goes to weathy people - around 80% of it if my memory can be trusted.
I may not have expressed myself very well on corruption (item 3). The point here is that the financial industry is massively corrupt and wasteful. The Australian retirement investment industry creams off huge amounts of gravy, often without the customer even knowing about it. We pay more for the "management" of our money than any other nation I know of - far, far more than most European nations, for example, and this has nothing at all to do with size of market or tyranny of distance, it's all down to greed and corruption and featherbedding amongst the members of the industry. Ever met a poor accountant?
In short, some Australians get to save for their retirement now (many cannot under the current system, and all lower-paid workers are hammered with extra tax on it which richer workers are not) but billions of dollars of these savings are creamed off by the vultures in the funds management caper. The only reason the savings work at all is because of the enormous government subsidy (via the mechanism of large tax breaks) - and this subsidy is so expensive that it would actually be cheaper (and much fairer) to abolish them completely and just give everyone the pension at age 65.
The answer, of course, is to make the super tax concessions fairer and even out the amount given to different people. At present, the rich get 80% of the government support, which is lunacy. But that will never happen while Abbott and Hockey are in charge. (Labor are a little better here, but go nowhere near far enough in the fairness direction.)
_________________
�Let's eat Grandma.� Commas save lives! |
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3.14159
Joined: 12 Sep 2009
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I must have not expressed myself well.
I was talking about the availability of Super to average Joes as a good thing and not as an opportunity for the rich to further enrich themselves.
1.The saving I mentioned was to the Welfare budget not General revenue and the numbers of people that are or will be reliant solely on the pension when they retire.
The Welfare budget is blamed for a lot of things.
Poor government tax policy shouldn't be one them!
2. If Government Tax loop-holes are costing more than they are saving there is a simple solution, close them!
3. Corruption seems to run in any industry that controls large amounts of other peoples money... The Commonwealth Bank for instance.
4. Australia had billions locked away in Super and was one of the major factor in Australia weathering the GFC as well as it did.
Can you (or anyone) put a $ price on that? |
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3.14159
Joined: 12 Sep 2009
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| Wokko wrote: | | I think some are looking at Telecom through rose coloured glasses. |
Back in 1997 when Telstra was sold off they revenue of 16 billion a year and profits of $4 billion.
The equity was valued at $9 billion.
Even going by 1997 figures, over the last 17 years Telstra would have brought a minimum $68 billion dollars to the budget.
Instead has gone into private hands and we have substandard Cable to the node.
If Telstra wasn't sold off but instead exposed to competition we could have paid for 2 NBN's of the highest quality and had change left-over.
Now we have of debates that revolve around "selling our childrens future" instead of why did we do this crazy economic self harm in the first place?
Toll roads, there's another example of the false economics of privatisation. |
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