Privatisation

Good Business or Economic Vandalism?

Australia is almost leading the world in privatisation of government assets and services. It is second only to the U.K. in dollar terms, and second only to New Zealand as a percentage of GDP. Australia has gone further than other countries in financing infrastructure development through off-budget financing deals and is steadily contracting out service delivery in many traditional areas of government activity.

Privatisation is leading to a radical change in the role of government in Australia and an erosion of public accountability. The authors believe that there is merit in privatising certain government activities. But they have severe reservations about how little privatisation has been subject to detailed critical analysis of:
- Financial implications of selling off government enterprises
- Deals worth billions of dollars without parliamentary or public scrutiny
- Economic "thinktanks" using flawed assessments of government enterprises because of unusual methods of accounting
- New financing schemes which obscure the financial exposure of governments
- Impact of privatisation on the quality of services provided to the community.

Rather, the debates have been based on rhetoric, sloganeering and flawed financial analysis. Misleading descriptions of benefits, like preservation of credit ratings and reduction of debt and interest costs, have been repeated uncritically by consultants, public servants, politicians and the financial press.

This book challenges bureaucrats to improve public sector financial administration and parliaments to establish accountability that fits contemporary conditions. Above all, it asks politicians to address the major question: what should governments do?