Why 2014 could be the year the postman is privatised
Should publicly-owned companies such as Australia Post, Medibank Private and electricity networks be sold off? Would consumers benefit?
That’s been one of the hot topics of recent weeks after the competition watchdog suggested it in a newspaper interview about an upcoming federal government review of competition policy.
“There is no doubt in my mind that energy prices, particularly in NSW and Queensland, would now be lower had the private sector owned those network businesses rather than them staying in the public sector,” said Rod Sims, pictured, the head of the Australian Competition and Consumer Commission.
“I strongly believe that the private sector owning commercial assets will bring about a lot more productive use of the assets than government ownership of the assets,” Mr Sims said.
His comments got a lively reaction from members on the FiftyUp Club Facebook page. Terry Wilson said: “Please tell us of one instance where the selling of public assets has resulted in lower prices to the consumer. I can’t think of any!”
But Pauline Mitchell disagreed: “Nothing wrong with competition. Occasionally it actually brings down prices.”
Experts such as Professor Stephen King from Monash University have since bought into the debate. He argues that “the key driver of productivity is competition and not ownership. Government-owned businesses that face strong private sector competition operate similarly to those competitors. And simply privatising a fat, lazy, government-owned monopoly tends to create a fat, lazy, private monopoly, not a lean, mean productivity machine.”
In the case of Australia Post, Fairfax Media columnist Peter Martin says privatisation is not the real issue. We should remove the government requirement for post to be delivered five days a week, he argues today. With so much now being delivered online, the postman should come just twice a week, Martin says.
What do you think? Does privatisation keep prices down? Does it lead to better or worse customer service? Is the daily post a thing of the past? Join the conversation in the FiftyUp Club Forum.
