Citizens Electoral Council of Australia

Media Release Wednesday, 3 August 2016

Craig Isherwood‚ National Secretary
PO Box 376‚ COBURG‚ VIC 3058
Phone: 1800 636 432
Email: cec@cecaust.com.au
Website: http://cec.cecaust.com.au

Privatisation an intentional rip-off

ACCC boss Rod Sims has stated the bleeding obvious, which he admits Australians already knew: privatisation is a disaster, one big rip-off.

According to the 26 July Australian Financial Review, Sims said that although he had advocated privatisation for three decades believing it “enhanced economic efficiency”, he now believed “people in the street” were correct to oppose privatisation because the track record shows it raises prices. “That’s why I am saying, ‘let’s just stop the privatisations’. It is increasing prices—let’s just call it out”, he said.

Sims zeroed in on the way privatisations are structured to give the buyers virtual or even actual monopoly powers. Governments boast of the big pay-day they get from privatising assets, but the private buyers only pay big money for those assets because they know they are guaranteed big profits. (Often, the profits soon outstrip what they paid for the assets—CBA was privatised for $7.8 billion in 1997; its cumulative profit in the two decades since is more than $80 billion.)

AFR reported that Sims wasn’t alone in his opinion: “Allan Fels, ACCC chairman from 1995 to 2003, said his own experience was similar. ‘Everyone was only interested in revenue,’ Professor Fels said. He said Sydney Airport Corporation was privatised with first rights to bid for a second airport in Sydney, and ‘even the famed Kennett-Stockdale’ government in Victoria in the 1990s put ‘unbelievable pressure’ on the ACCC to allow long periods of very high monopoly prices to maximise the proceeds.”

Sims’ admissions comes 20 years after the Citizens Electoral Council exposed privatisation as an intentional looting scam in a series of New Citizen special reports on the Mont Pelerin Society (MPS), beginning with the May 1996 “Secretive British cult plots mass jobs cuts, union busting, drugs”; July-Aug. 1996 “Stop the great privatisation rip-off”; and Jan.-Mar. 1997 “Nazi ‘reforms’ rip New Zealand—Australia next”. Those reports exposed the MPS, founded in Switzerland in 1947, as an operation to revive Mussolini-style corporatism, aka fascism, in which the power of the state is used not for the common good, but for the benefit of private financial interests. Funded by the British Crown and Bank of England, the MPS went on to direct the reform agenda of Margaret Thatcher, Roger Douglas in New Zealand, and Paul Keating and John Howard.

As the New Citizen stated in “Stop the great privatisation rip-off”, “The goal of the Mont Pelerin Society is to eliminate the nation-state; on the way there, Mont Pelerin and its friends cheat and steal from the public like mad, through ‘privatisation’.” The New Citizen series documented:

The same investment banks that were profiting from privatisations—either as members of consortia that bought the assets or as “advisers” earning millions in fees for brokering the sales—were first involved in writing the government’s privatisation policies. For instance, Jeff Kennett’s $30 billion firesale of Victoria’s electricity and gas infrastructure was planned in a 1992 policy manifesto called Project Victoria, co-written by the Institute of Public Affairs and the then Tasman Institute (now merged into ACIL Allen Consulting)—both MPS fronts. Tasman was chaired by Sidney Baillieu Myer, a director of NM Rothschild and Sons, the primary privatisation advisers to Margaret Thatcher in the UK and major creditor to some of the bidders for Victoria’s electricity assets. (Media lies were key in the success of this scam—Rupert Murdoch was on the Tasman Institute’s Advisory Board.)
Even more blatant was New Zealand, where the main MPS front is called the Business Roundtable. Headed by a former NZ treasury official named Roger Kerr, a member of the MPS, the Business Roundtable directed the privatisation program started under Labour Finance Minister Roger Douglas and continued under National Party Finance Minister Ruth Richardson. The economic “reforms” these two imposed were so brutal on the NZ population they were dubbed “Rogernomics” and “Ruthanasia”. However, they were a windfall for big business. Out of the $15.322 billion worth of NZ state assets privatised in 1988-96, companies connected with the MPS’s Business Roundtable bought $12.542 billion—more than 80 per cent of the total.
Not covered in that series is the glaring case of Macquarie Bank, which was also involved in Kennett’s privatisation brains trust the Tasman Institute. Finance journalist Stephen Mayne, a former staffer to Kennett’s Treasurer Alan Stockdale, says, “There were no bigger beneficiaries of the great Kennett sell-off than Macquarie Bank.” Macquarie earned hundreds of millions in fees, for advising such sales as Loy Yang A and B power stations, and the private toll road CityLink. After Kennett lost government in 1999, Alan Stockdale went to work as Executive Chairman of Macquarie Bank’s Asset and Infrastructure Group. (There are many more examples of politicians doing profitable deals with Macquarie Bank while in office, who have afterwards joined Macquarie on big dollars, including former NSW premier Bob Carr.)

Although 20 years late, Sims’ outburst is significant given that Macquarie Bank, through its then-director Fred Hilmer, wrote the National Competition Policy report that created Sims’ Australian Competition and Consumer Commission; and that another Macquarie banker, Graeme Samuel, was Sims’ predecessor as ACCC boss. National Competition Policy and the ACCC were devised to enforce policies such as privatisation as necessary “microeconomic reforms” to enhance “economic efficiency”. Reality has forced Sims to call bulldust on that myth.

It’s not enough for Sims to admit it; the Australian people must force the government to end all privatisations, and reverse most if not all of those that have happened. This is a fight against corruption and public theft, and for functioning infrastructure and services, a functioning nation-state committed to the common good. The perpetrators have got away with it until now because even though the public hate it, they have tended to stick with the pro-privatisation major parties anyway. That is changing, as the rising minor party vote attests, which is probably why Sims has come clean, but to really fight and defeat this agenda, join with the force that has led this fight for more than two decades—the CEC.

Click here for a free literature pack on the Mont Pelerin Society, including the three New Citizen features from 1996-97, and the 24 February 2016 Australian Alert Service feature “Cameron’s Trade Union bill is Mont Pelerin Society fascism”.

Click here to join the CEC as a member.

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