Sims slams wonky privatisations
Australian Competition and Consumer Commission (ACCC) chairman Rod Sims has unleashed on the damaging effects of privatisation and deregulation.
Despite supporting the relatively common government money-making measures for decades, Sims says he is now on the verge of opposing them entirely.
He said that recent sales of ports and electricity infrastructure and the inclusion of private providers in the vocational education sector were damaging his faith in privatisation and deregulation.
“I've been a very strong advocate of privatisation for probably 30 years; I believe it enhances economic efficiency,” Mr Sims told the Melbourne Economic Forum this week.
“I'm now almost at the point of opposing privatisation because it's been done to boost proceeds, it's been done to boost asset sales and I think it's severely damaging our economy.”
Mr Sims pointed to the sale of ports like Port Botany and Port Kembla in NSW (which were jointly privatised) and the Port of Melbourne (which had competition-restricting conditions) had created poorly-regulated monopolies that could set their own prices.
“Of course you get these lovely headlines in the Financial Review saying; ‘Gosh, what a successful sale, look at the multiple they achieved’,” Mr Sims said.
“Well of course they bloody well did: the owners factored in very large price rises because there's no regulation on how they set the price of a monopoly. How dopey is that?”
He said the public has a more rational reading of the sales than politicians did.
“When you meet people in the street and they say; ‘I don't want privatisation because it boosts prices' and you dismiss them ... recent examples suggest they're right,” the ACCC chief said.
“The excessive spend on electric poles and wires has damaged our productivity. The higher energy price we're getting from some poor gas and electricity policies are damaging some of our productive sectors.”
Mr Sims said governments need to be woken up.
“I think a sharp uppercut is necessary and that's why I'm saying; ‘Stop the privatisation’,” he said.
Mr Sims again backed calls for a rigorous “effects test” on the sale of public assets.
But the Productivity Commission is moving in the other direction, agreeing this week with the Business Council of Australia, the federal Labor opposition and the supermarket giants that we do not need an “effects test”.
Opposition to an “effects test” is a central platform for National Party MPs, including Deputy Prime Minister Barnaby Joyce.
In a related matter, the ACCC recently launched legal action against Medibank Private for allegedly adjusting its insurance policies in secret before it was privatised.