Senate debates

Tuesday, 5 December 2017



9:06 pm

Photo of Lee RhiannonLee Rhiannon (NSW, Australian Greens) Share this | Hansard source

When our transitory Prime Minister, Mr Turnbull, announced a royal commission into banking, whose terms of reference he has since rorted, he added, 'It will not put capitalism on trial.' Maybe it should. For the first time in living memory, people coming of age in the 21st century face a less prosperous future than their parents: stagnant wages, precarious employment, and denied access to decent housing as a right. They are also burdened from the outset of their adult lives with higher education debt. They will inherit a world of growing and already obscene inequality, a hollowed-out democracy, ingrained corporate corruption, and a living planet—our biosphere—experiencing accelerating degradation. These problems are the result of capitalism. We live in a socioeconomic system whose essential nature is the incessant drive to produce both a wider range and volume of commodities, all with the goal of increased profits for the one per cent. Everything else either doesn't matter or is of secondary rank. It is a system that acts as though infinite production is possible on a planet of finite resources.

There are also those who say people on the left have opportunistically co-opted ecological concerns. That couldn't be further from the truth. In fact, a number of left-wing thinkers have embraced eco-socialism. Murray Bookchin, an American libertarian socialist and the pioneer of the ecological movement, has been writing about ecological matters from the early 1960s. In 1970, Bookchin wrote:

Capitalism is inherently anti-ecological. Competition and accumulation constitute its very law of life, a law which Marx pungently summarised in the phrase, 'production for the sake of production'. Anything however hallowed or rare, 'has its price' and is fair game for the marketplace. In a society of thus kind, nature is necessarily treated as a mere resource to be plundered and exploited. The destruction of the natural world, far from being the result of mere hubristic blunders, follows inexorably from the very logic of capitalist production.

Despite the multiple crises that confront us, governments of all stripes have been pursuing an agenda of more capitalism.

The introduction of neoliberalism in the 1970s brought the trifecta of privatisations, deregulation, and the weakening of unions to centre stage in many countries. After the labour parties of much of the world embraced neoliberalism, and with the collapse of the Soviet Union, Margaret Thatcher's TINA—that is, 'There is no alternative'—became conventional wisdom. Experience of capitalism and neoliberalism, in general, and privatisation, in particular, has shown what an empty lie this is. Many knew when privatisation was first mooted and many more have realised since that government or public ownership works, and works better. The fate of the Commonwealth Bank—once a byword for integrity and serving the public interest—after it was privatised and with all the subsequent scandals, is a stunning example of this. Let's hope its renationalisation, or the creation of a people's bank, and the boosting of mutual banks and credit unions are part of the discussions around the royal commission into banks.

I've just published a booklet looking at privatisation in my state of New South Wales over the past 25 years. The booklet titled Sold Off, Sold Out: The Disasters of Privatisation details the sorry record of governments flogging off public assets and services, from electricity to prisons, housing, TAFE and even forestry. The pamphlet has a subtitle: 'How to reclaim our common wealth'. It's not enough to criticise the failings of the current socioeconomic system; we must be advancing alternatives, such as renationalisation and a revitalised public sector. There is a real appetite emerging for this discussion. In just the last few weeks, I've addressed four public meetings on privatisation and renationalisation. We should not be surprised in this renewed interest, given how tangible the impact of privatisation is on people's lives in central areas like energy, housing and education.

Energy is perhaps privatisation's biggest con. Under public ownership, electricity prices fell steadily until the era of privatisation between 1985 and 1995; prices had halved. Since then, prices have risen sharply. With the era of privatisation, these rises have now accelerated. This year, consumers can expect double-digit increases in their power bills—so much for the promised benefits of privatisation! No sector of the economy has been more privatised than electricity. It's gone further in Australia than in Britain, the European Union and the United States. Electricity assets worth approximately $60 billion have been transferred from public to corporate ownership in Australia since 1992.

In 1995, all Australian governments adopted the National Competition Policy, which entailed breaking up their state government owned electricity monopolies, resulting in entities being corporatised and operated by private firms, with privatisation following shortly after. As ownership and control became concentrated in fewer and fewer hands, it was no surprise that official inquiries discovered generating companies indulging in price manipulation via the new national energy market, and all at the expense of consumers.

Privatisation has not been good for workers, either. There have been job losses among maintenance workers. The Electrical Trades Union reports that a quarter of frontline jobs in New South Wales have been abolished since 2012. There has been some jobs growth—more managers and more sales staff peddling misleading or confusing offers to the public. There is now one manager to every nine workers, compared to one to 13 before privatisation. Sales staff have increased exponentially, multiplying by no less than fivefold. A crucial result has been that the level of unionisation has fallen from 68 per cent to 32 per cent since 1995. The new owners face a more domesticated workforce, with a weaker union—again, a real intent of privatisation and, unfortunately, one achieved here.

Adequate, stable housing is viewed as a human right by the United Nations, and the Greens agree strongly that it is principle No. 1 in our housing policy, yet thousands of homeless people are sleeping rough every night. In New South Wales alone there are 60,000 people on the waiting list for public housing. Nearly half of all Australians under 40 now live in insecure rental housing. The major parties' answer is to promote measures that pump up supply in the private market. Governments adopt measures that favour investors; the notorious negative gearing and capital gains tax discounts are the best known. The banks, for their part, further fuel this investor surge. Half of all housing loans go to investors. These interest-only housing loans are the banks' most profitable line of business. Such loans earn banks a 42 per cent return on equity, according to a recent analysis by Morgan Stanley. This is far above even the lucrative 17 per cent earned from owner-occupier loans.

Not content with this system, rigged even against middle-income homebuyers, the New South Wales Liberal National Party government is liquidating public housing estates. Well-located public housing stock is being sold off in what observers have dubbed 'social cleansing'. The most notorious case of this example of privatisation is the sell-off of public housing in Millers Point, known to many as The Rocks, on Sydney Harbour. For neoliberals, it is apparently unacceptable to have lower-income people living with views of Sydney, despite the fact that many low-income people work in the city. By a cruel twist, Millers Point, a wonderful island of heritage housing in the midst of the CBD, only exists because the tenants combined with the legendary Builders Labourers Federation in the 1970s to work together to preserve it from development, and thanks to the courageous Green Bans movement they were successful.

The solution to the current housing failure requires bold and imaginative public investment to provide affordable, secure and sustainable housing. But all the state coalition government is offering to build is 800 dwellings per year. Many acknowledge that they need to increase this by the figure of 20-fold. The Australian Greens have suggested that this can be done via the creation of a federal housing trust, which would raise $143 billion over 15 years via issuing special government bonds. In the case of New South Wales, that would mean building 165 new homes. The rent or mortgage repayments on these homes could be capped at 30 per cent of household income, the common threshold for housing to remain affordable. That is the rule for community housing organisations, and they remain solvent.

The aim of the trust would be to enshrine housing as a right, rather than as a commodity that is priced out of reach for too many people. The aim would be that homes built by the trust would be available for everyone, as the Queensland Greens proposed in the recent state election. In tandem, existing public housing estates that have been grievously run down for a generation could be upgraded. There is no reason that public goods need to be inferior to private goods. It is not true for universities and government-run childcare, it is not true in public housing in much of progressive Europe and it shouldn't be true here. So how would this be paid for? Green housing bonds would be the major source of funding. In addition, the Parliamentary Budget Office has estimated that the phasing-out of capital gains tax discounts and negative gearing in housing over five years would save governments $51 billion over a decade.

Privatisation is also not working in the education sector, and it's an expensive lesson for the public, parents, teachers and students. The dismantling of our TAFE system and opening it up to for-profit private providers, many of whom are dodgy opportunists, has wasted billions of dollars. There's been a steady stream of court cases and media revelations about corruption in this newly privatised sector. The Australian Government Actuary estimates that over a billion dollars of Commonwealth money, issued inappropriately, will never be repaid. In addition, it has emerged that the cost of training graduates at private colleges can be 12 times that of TAFE colleges. A world-class system of vocational and further education has been deliberately destroyed, purely on ideological grounds. Down the track, this will have serious, negative effects on economic productivity and the general wellbeing of people in our community, let alone education standards.

One of the great reforms of the short-lived but inspiring Whitlam era was the abolition of university fees. The reintroduction of fees in 1988 by another Labor government reflected the capture of the political class by neoliberalism. Subsequent Labor governments have actually cut public funding to universities. Universities, starved of public funds, have turned to student fees to fund their operations. Students now leave universities burdened with heavy debts due to rising fees. In pursuit of income, university authorities also tailor their courses to attract high-fee-paying students from overseas. You might say, 'What does it matter?' It matters enormously to the education standards and to the whole way education is run in this country. A higher education system driven by market imperatives, selling courses as commodities, is a sure recipe for debasement of our universities.

In early childhood education, the lessons of privatisation haven't been learnt either. Private operators prevail, and instances of corruption in the allocation of funds have been widely reported. Fees for working parents rise faster than the CPI, and early childhood teachers, mostly female, are notoriously underpaid.

The renationalisation of education is needed. It would take the form of a switch to higher public funding for our public schools, TAFE colleges and universities and an end to the attempt to turn education into a market. Already, critics, such as Mr Murdoch's paper The Australian in their review of my booklet Sold Off, Sold Out, are raising the cry, 'How much will all this cost?' Well, Australia is a rich country, and we have to get our priorities right, so let me make a few preliminary points. The renationalisation of TAFE will essentially involve the redirection of the existing vocational education budget to the public TAFE system. A people's bank could be based on the existing infrastructure of Australia Post. As for the cost of renationalising the grid by state and federal governments, the $20 billion netted from the privatisation of half the New South Wales grid earlier this year gives a guide to that cost. Sensibly sequenced, a program of renationalisation can be achieved. Remember, too, there will be a revenue stream from the reacquired assets.

I repeat: whether it is electricity or technical and vocational education or health or public transport or early childhood education, it is clear that public or government ownership can work better. In Britain, opinion polls have revealed that even Conservative Party voters realise this, with a clear majority of them supporting the renationalisation of railways, electricity, water and the Royal Mail.

It is the fate of the planet that provides the most urgent argument for renationalisation and public enterprise. If we are to avoid disastrous global warming by keeping global temperature increases to 1.5 degrees, we are going to need to switch to renewables, and very fast. Even some Liberal senators acknowledge this. But the scale of this switch is enormous. Earlier this year, Professor John Quiggin of the University of Queensland made the detailed case for renationalising the grid. We also need to increase our solar capacity, for example, by more than 100 times, as Chris Goodall has pointed out recently in The Switch: How Solar, Storage and New Tech Means Cheap Power for All. Goodall is no socialist; he's no Marxist. He's a contributor to the Financial Times in London, and this what he wrote: 'For the avoidance of doubt, I have no confidence whatsoever that the much larger process of moving the entire world onto renewables will be easily done by using free markets. I think massive governmental intervention is wholly and unavoidably necessary to maximise the speed and minimise the cost.' In other words, we need renationalisation and public enterprise for reasons of planetary survival, as well as social justice, economic equality and increased democracy.

Finally, let me say that renationalisation and renewed public ownership must be democratically managed. Workers and consumers must have a real say. That will involve different management and even ownership structures, such as locally and regionally based cooperatives. Developing renewable power lends itself to such structures. There are existing models for democratic public enterprises that I'm confident Australians have the ingenuity and intelligence to adapt and develop for our conditions and the immense challenges we face.


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