This article is by Michael de Percy, a lecturer in government-business relations and leadership, innovation and change at the University of Canberra’s Faculty of Business and Government. It first appeared on his blog, and is replicated here with his permission. De Percy also writes on his lecturer’s blog, and Twitters at @madepercy.
opinion There is some speculation the Greens will de-rail the privatisation of the National Broadband Network in a few years time, based on a pledge made by Senator Scott Ludlam “to fight for the project to remain in public hands”. At a time when the NBN is the only real reason Labor is in power, this is just crazy talk.
The premise that the NBN will result in a monopoly holder is not a done deal. If anything, there are plenty of lessons to be learnt from the privatisation of Telstra. And the idea that Telstra’s privatisation left Australia with a monopoly provider as a direct result of privatisation is simply wrong — the Howard government made a mess of this on the basis of blind ideology. Ludlam’s pledge is another case of blind ideology making decisions, albeit in the other ideological direction.
But is privatisation necessarily bad?
It can be, but usually it is the government who messes it up. Businesses want to make a profit? Surprise, surprise, but this isn’t necessarily evil. A quick glance at most attempts at full privatisation or public-private partnerships (PPPs) demonstrates that it is rarely businesses who are the bad guys. After all, state governments refused to release details on the Harbour Tunnel and other PPPs, not the businesses who were calling for this to be done all along.
But what about Telstra? With Telstra’s share price taking a caning in the market, more meddling by government with the NBN should be over and done with as quickly as possible. Ongoing public ownership is not a solution, it is the problem that got us here in the first place. And handing over Telstra’s ageing assets to NBN Co is the best way to fix what should have been done before the decision to privatise Telstra was made on the basis of ideology and not practical reality.
Once communications networks are in private hands and there is real competition, there is no evidence anywhere in the world to suggest that market-based approaches don’t work. The single national solution provided by the NBN is just one approach to fix the mess created by governments since 1975 when the monolithic Postmaster General’s Department (PMG) was finally divided and conquered. But T3 released the untamed gorilla that perpetuated the policy failures of every government since PMG’s demise. It is very important to note that none of this was really the private sector’s doing.
And there is little doubt that government meddling in the market distorts everything from prices, to competition, to regulation, to share prices — even the information available for consumers to make decisions which don’t end up in tears.
From personal experience, I am paying $110 per month for a high speed, 10GB/month Wimax plan because nothing else is fast enough in Palmerston via Gungahlin. That’s expensive. But with the NBN due to be deployed in my suburb some time in the future, I am not very happy about government using my tax money to give me high-speed broadband while I am already committed to a two-year contract out of the necessity created by government meddling in the first place.
If the NBN improves the service I currently receive I will be happy, but if it means I have to pay out a two-year contract to move to the NBN I have also paid for, I will be quite grumpy indeed!
So let us applaud the NBN for how it will fix the broadband woes created by governments past. But don’t think ongoing public ownership of the NBN is a good thing.
The Greens really need to reconsider their approach to public ownership, especially where communications networks are concerned. If they want to keep the duct structure in public hands to ensure access for all competitors, then that is another thing. And this could be built out as part of road or other network budgets but that would require greater cooperation within our federal system. But for the federal government to own it all is nothing short of a return to the bad old days.
Australia really needs to get over its addiction to government ownership and start applauding the successes of our private sector. If we don’t, we risk hampering our future success. Can you remember a single occasion where our private sector was applauded for major feats of engineering? Not once!
Yet history has proven time and again that ideological approaches devoid of lived experience are doomed to fail. So any policy decision based solely on ideology, whether left or right, should be avoided at all costs. And we are already too far behind the rest of the world in taking advantage of the information revolution for government to meddle further with our communications industries.
Put simply, committing to public ownership for the sake of public ownership is a backward step that nobody should be seriously considering at this stage of the NBN’s deployment. It is just crazy talk.