Odinian Beta

The record of the last four decades speaks to the roaring success of deregulating and privatising government owned enterprises.

Led by Prime Minister Margaret Thatcher in the United Kingdom and emulated all around the world, deregulation and privatisation of government owned enterprises has resulted in dramatically improved customer service and increased profitability for the privatised enterprises. It has also led to greater choice for consumers due to increased competition in a deregulated market.

Privatisation has also relieved the taxpayer from the burden of funding bloated, inefficient public enterprises full of public servants whose incentive is to keep their jobs and expand their bureaucracies rather than serving their customers.

Anyone in Australia who remembers how long it took for the old Telecom (now Telstra) to fix a problem or install a new phone line would agree with this. Markets ranging from air travel to telecommunications to financial services now supply goods or services at higher quality and lower prices than would otherwise have been the case had the status quo 40 years ago remained.

Those enterprises or agencies which governments at the Federal or State level weren’t prepared to privatise were instead corporatised. That is, they were restructured to be more like private businesses to hopefully improve the level of service offered to taxpayers while saving taxpayers money.

While in many cases this has led to improved customer service – Australia Post is the example that comes to mind – this hasn’t been without negative outcomes.

Unforeseen outcomes

These include the dramatic increase in fees and charges imposed by these corporatised enterprises on their customers, while the salaries and bonuses paid to senior management in particular have rocketed to private sector like levels.

Given I am required by the government to have a passport or Drivers Licence, how is it right for the government to also charge me for the privilege?

Shouldn’t the relevant government at either Federal or State level be meeting the costs of supplying me with a Drivers Licence, passport and the like via its general taxation revenue? Isn’t this why we pay our (far too high) taxes?

Based on my understanding of the theory behind corporatisation, it should make the agency more efficient in terms of wasting fewer taxpayer dollars. Yet one of the perverse outcomes of corporatisation has been the dramatic rise in salaries for senior management of these government enterprises.

I have no problem with managers in the private sector making millions if they deserve it, but why are taxpayers forking over millions to the CEO and senior management of Australia Post and other government enterprises?

Ultimately, while the intentions behind corporatisation of government enterprises were good, it has actually resulted in taxpayers being plucked more efficiently rather than having less of their money going to the government.

As such, I see no reason why fees for Drivers Licences, passports and so on can’t be reduced to zero, with the government covering the cost through its general revenue. I also see no reason why the salaries of senior management can’t be reduced to the more reasonable levels you would find in other parts of the public service. (These salaries are also too high, but that is another story.)

That way, the original goals of corporatisation would finally be achieved.