Snowy privatisation failure a blow to neoliberalism

Issue 

The federal government's decision to retain its stake in the Snowy Mountains hydro-electric scheme, prompting an immediate about-face by the NSW and Victorian governments, was a victory against bipartisan anti-working-class, privatisation policies.

On June 2, PM John Howard admitted that the decision to sell the Snowy had "created a lot of unhappiness ... right across the political spectrum" and that he was "not such a zealot about privatisation that you sell everything under the sun irrespective of the circumstances".

What were those circumstances? The PM's decision was undoubtedly connected to saving the seats of Coalition MPs who would have faced a backlash over the sale. It was also a free kick at the NSW Labor government which, crying poor, had earmarked the sale proceeds to health, education and public transport services in its only budget before the state election next March. Since the federal government's share of the Snowy was only 13%, compared to NSW's 58% and Victoria's 29%, the decision was easier for Howard.

The second, and not insignificant, factor in forcing Howard's hand was an unusual "coalition of the unwilling" — environmentalists, Greens, members of the Coalition parties (including former PM Malcolm Fraser) and actor Cate Blanchett. Three irrigation companies and the Ricegrowers Cooperatives were also opposed. As NSW Greens MLC Sylvia Hale said on May 19, "Other than the NSW government, which dragged the Victorian and Commonwealth governments into the sale, and the financial organisations such as Macquarie Bank that are handling the sale process, it is almost impossible to find anyone in favour". This coalition has also decided, wisely, not to trust Howard, announcing that they were not abandoning the campaign entirely.

The Snowy sell-off attempt was just a part of the Australia-wide state-federal privatisation push. According to a 1998 article by Stephen King and Rohan Pitchford in the Australian Economic Review, revenues from privatisations had exceeded $61 billion since the 1989-90 financial year. Since 1998, privatisation has continued unabated.

A December 1997 Reserve Bank of Australia bulletin noted: "There has been an increasing amount of privatisation in Australia as the 1990s progressed. While this trend is also evident overseas, Australia has had one of the larger programs among OECD countries."

King and Pitchford's article, while not anti-privatisation per se, argued: "Privatisation in Australia seems to have been done without specific research into its likely effects ... In particular, governments at both the state and federal level in Australia appear to pay little attention to the reality of privatisation, preferring to follow their own rhetoric."

The attempted sell-off of the Snowy hydro scheme was political opportunism of the first order. It came close to being a parody of neoliberal privatisation mania, with almost zero beneficiaries outside of the NSW government and Macquarie Bank, UBS AG and Goldman Sachs JBWere, which were managing the sale. From the point of view of most people in NSW and Victoria, the sell-off would have represented a financial, and probably environmental, disaster.

State and federal governments have been engaged in open and covert attempts to sell off public infrastructure for several decades. The final death of Telstra as a publicly-owned utility has temporarily slowed, at least until the share price rises, and other utilities such as Australia Post are being increasingly corporatised in preparation for their full privatisation when the share price is right.

The Snowy's retention in public hands is a victory for all opponents of neoliberalism. It shows that broad alliances against governments' profits-before-people mania can win.

A final point. Much has been made of the Snowy scheme's status as a "national icon". There is no doubt that the scheme is an engineering feat and a testament to the skill of the workers who constructed it. Some 121 workers died during its construction from 1949 to 1974.

Commenting on this in Workers Online in 1999, Elizabeth Dixon said that the relatively low numbers of fatalities could be attributed to "the relatively high premium placed on human life in Australian workplaces". This, she argued, came down to "strong democratic traditions and the historical influence of trade unionism which simply did not permit the acceptance of a fatality rate which mirrored overseas practice".

This is, of course, exactly what Work Choices is designed to do away with. Privatising the Snowy may not have been part of Howard's "master plan" for Australia, but this victory is nevertheless important because it shows that he can be beaten back.

From Green Left Weekly, June 14, 2006.
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