Privatise State Companies now!

Victor

Originally posted by DadaKopf
Because it's illegal to renationalize.

Ah, but a decision could be made that the current situation is anti-competitive and that the company should be mini-Belled.

Champ

The Government should protect basic services like water, health, power, transport, and waste disposal. These are essential services that are needed to run the country and isn't running the country the Governments job.

I agree with this; though local circumstances often dictate practicality. :dunno:

I can't see for profit, private companies acting in the interests of the general public when operating public services. I don't deny the finer points of privatisation; i just haven't seen any places where it was suppose to work; "work" like it was suppose to.

I certainly don't won't privatisation to occur with our leaders handling it... the privatisation of the telecom network can't get much lower than a botched job with lasting repercussions; made worse by a weak regulator.

I don't think profit and public interest are mutually compatible.... :dunno:

If i had to choose between a state and private monopoly; i think the public monopoly would be the lesser of the two evils in the long run.

DadaKopf

I wasn't aware that was possible under the terms of the EU's agreement with the WTO.

Education, Health and Broadcasting next on the chopping block!

arcadegame2004

I don't think profit and public interest are mutually compatible

Would you prefer the company to make losses?

I agree that monopolies generally are detrimental to the public-interest.

Privatisation doesn't have to mean a privatised monopoly, though.

At the very least private-sector firms must be allowed to compete with the ESB, Aer Rianta, Bus Eireann, and Dublin Bus. Let the consumer have a choice.

The fact that these companies are monopolies (except Bus Eireann), only emboldens trade-unions in them to strike in support of ridiculously high pay demands, e.g. ESB officers on 120,000 a yr demanding an 18% pay rise(!). They are more likely to strike because they know the leverage that working in a monopoly brings i.e. we either get our electricity from them (unless your a corporate body in which case you can choose a rival like Viridian) or get none. They effectively have a gun (metaphorically speaking) held to the government's head, and that of any future government that leaves in place this sorry state of affairs. Creating a parallel electricity-network is not as impractical as creating a parallel rail-network.

Then, if it is seen that one of these semi-state companies is charging more than the private-sector competition, we consumers will have the right to choose one of them.

Whether you favour privatisation or not, surely any reasonable person cannot argue against allowing the private-sector to compete with the companies I have just mentioned.

arcadegame2004

Education, Health and Broadcasting next on the chopping block

Given the ruptures of discontent from the leftwing of the FF party I doubt that very much.

However, the private-sector has a huge and positive role to play in the provision of health-care. One of the few Labour policies I actually agree with was their policy of universal compulsory health-insurance in the 2002 election (I think it is still their policy). They didn't make it clear whether the scheme was to be a public or private-sector scheme. I personally feel it should be private. If you want to know why I feel that then look at all the price hikes we've seen from the state-owned VHI.

VHI should be privatised.

AngelofFire

Originally posted by arcadegame2004




Alternatively, it could cut costs like Aer Lingus have done in order to function profitably. Or it could attract more airlines through lowering landing-charges.

Cost cuts involve doing away with non profitbale routes. Aer Rianta needs state subsidies to maintain current landing charges and still be profitable.In a recent report it was said that there is no way a private company could maintain the profitability of adminstrating dublin Airport without hiking landing charges or airport taxes.

arcadegame2004

In a recent report it was said that there is no way a private company could maintain the profitability of adminstrating dublin Airport without hiking landing charges or airport taxes.

Was this the report commissioned by the board of Aer Rianta, who are due to lose their jobs to a new "Dublin Airport Authority" under the new arrangements, by any chance? What did you expect them to say :rolleyes:

Champ

Would you prefer the company to make losses?

Okay my bad; i didn't mean to imply that public companies would make losses; just that a state run company would be more orientated towards having a more effective system in place to serve the public; as opposed to concentrating more on making money; i've yet to hear of a case where the best of both worlds were served... i.e the former tends to detract from the latter.

At the very least private-sector firms must be allowed to compete with the ESB, Aer Rianta, Bus Eireann, and Dublin Bus. Let the consumer have a choice.

I agree with this; though practically speaking wouldn't this require higher grants to be given to the state run companies... less income available and thus be counter productive?.. Worst case being the state run company gets hit so hard; that it gets privatised as well.

They effectively have a gun (metaphorically speaking) held to the government's head, and that of any future government that leaves in place this sorry state of affairs.

I agree; thats definetly a situation that requires action. Though what action would be best?
Breaking up a state run company into smaller competing units is risky in the very least and only time will time how the Aer Rianta handling will turn out.
Turn over to a multitude of private companies in the hope that intense competition will keep public services up to spec?
Look what happened in the UK; i believe only a scant 3 of the original dozen bus operators are still up; and these 3 realise that they're ina precarious situation; and so there's hardly anything conductive towards competition occuring now. It's effectively a private 3 way member monopoly.
I think the problem should be tackled at the source; i.e overly aggressive unions + greedy individuals.

Then, if it is seen that one of these semi-state companies is charging more than the private-sector competition, we consumers will have the right to choose one of them.

Agree; though thats ideal. I'm thinking that any private company will wipe out the state company with initial lower prices; and then start milking the money off us like nothing the state compnay ever did to us.

arcadegame2004

Originally posted by Champ
I agree with this; though practically speaking wouldn't this require higher grants to be given to the state run companies... less income available and thus be counter productive?.. Worst case being the state run company gets hit so hard; that it gets privatised as well.

I am totally opposed to giving grants to the semi-state sector. If they are losing custom to rivals who are charging less, then let them charge less too. If that requires cost cutting, then so be it. If that requires jobs being shed, then I simply reply that in the long-run, unemployment will be kept low by the low inflation that normally results from competition (provided it's done right - unlike California).

I firmly believe that Governments should not run businesses. Such companies become job-fodder for rich supporters of the ruling-party/parties.

In the private-sector, the board are elected by the shareholders. The shareholders have an interest in ensuring that the company is profitable i.e. dividends and maintaining high as possible share-value. For that reason they are far more likely to choose competent directors (though this does not always happen). I think ensuring profitability is a better basis for choosing a director than party loyalty.:rolleyes:

Massive tax-cuts and spending increases would certainly result from the mass-sale of semi-state companies and that can only be a good thing for the Health-Service, Education, roads etc. e.g. the sale of the Government's remaining 50.1% stake in Eircom netted 5 billion euro for the State.

bobbyjoe

Seems its the ESB officers who are calling to strike are 2,300 of the 8,000 workers.
The Congress of trade unions are trying to avert a strike.
Besides the pay rise they want somthing done about the half billion deficit in the company's pension fund and a Union stake in the company (sound like legitimate concerns).

This 120,000 wage figure anyone know where it came from?

mycroft

At the very least private-sector firms must be allowed to compete with the ESB, Aer Rianta, Bus Eireann, and Dublin Bus. Let the consumer have a choice.

And they do

look once again for the hard of thinking, public companies are their to provide a service, very often the service that it provides costs more that what it charges, this is what we refer to as a public service.

Now the situation exists that if you are unhappy with public transport you can y'know buy a car, or a bicycle. However if your car is in the shop or you bike has flat, you have the option of traveling on subsidised transportation.

Also see Air Rianta, ESB (there are private power suppliers), and BUPA.

am totally opposed to giving grants to the semi-state sector. If they are losing custom to rivals who are charging less, then let them charge less too

And again semi state bodies provide necessary services to those who can't afford them, or it would not be cost effective to provide for. In other to sustain these services they need to be subsidised.

I firmly believe that Governments should not run businesses. Such companies become job-fodder for rich supporters of the ruling-party/parties.

And earlier you said

I reiterate again that I have NEVER called from the privatisation of the railways.

So which is your actual point of view?

In the private-sector, the board are elected by the shareholders. The shareholders have an interest in ensuring that the company is profitable i.e. dividends and maintaining high as possible share-value.

And a public service provider's primary role is to provide the best service to the public. Again to re-iterate if a hosipital was to be run other your framework, important services such as cleaning would be given to the contractor who biddest lowest, rather than a trained professional. Cross infections have skyrocketed in the UK after cleaning duties where farmed out.

I think ensuring profitability is a better basis for choosing a director than party loyalty.

The civil service doesn't get completely re-hired every time a new government is in place, you do know that right?

arcadegame2004

Originally posted by Mycroft
Also see Air Rianta, ESB (there are private power suppliers), and BUPA.

The private power suppliers are forbidden from supplying the consumer market. They are only allowed to supply the business-sector.

I agree that BUPA competes with VHI. I never disputed this.

Your reference to cars competing with buses is just silly. We need to see other bus-companies allowed to compete with Dublin Bus in Dublin. At the moment Dublin Bus has a monopoly over bus-transport within Dublin.

Profit should not be demonised. Would you rather the company made losses?

As David Learmont said on RTE Radio 1 yesterday, the idea that a country needs to have a state-owned "national-airline" is old-fashioned. There is plenty of money and profit to be made in traveling to and from this country. The idea that if we privatise Aer Lingus that they will suddenly abandon Ireland is sheer stupidity. It is nonsense. Look at the sheer massive size of the Irish diaspora. Learmont also added that under EU rules, the Irish Government could only invest money in Aer Lingus in good times, not as a bail out. In the private sector, Aer Lingus would be able to access vast amounts of private capital through share-issues. So in the private-sector, Aer Lingus's future would be far more secure.

And again semi state bodies provide necessary services to those who can't afford them, or it would not be cost effective to provide for. In other to sustain these services they need to be subsidised.

There already exists things like free student passes, and free travel for pensioners. I am not calling for these to be abolished. They are not going to be affected by what I am proposing. But the rest of us will be. We have a right to choose. I am totally opposed to State subsidies. They reward failure. They encourage a culture of complacency whererby the company feels "we don't need to make a profit because Charlies McCreevy or Enda Kenny or whoever will bail us out etc.".

Champ

Your reference to cars competing with buses is just silly

Well; perhaps not. A bus company whether state or private would try to make the service more appealing than using your own vehicle....the state company naturally is geared towards having the best service available; and the private having a core interest of inticing as many customers as possible for profit....

Profit should not be demonised. Would you rather the company made losses?

Hmmm; i interpreted it as conveying that profit been prioritised over quality of service isn't conductive to the public's interests; not that the company would necessarily make losses.

They encourage a culture of complacency whererby the company feels "we don't need to make a profit because Charlies McCreevy or Enda Kenny or whoever will bail us out etc.".

Granted; made worse by a monopoly. Specifically speaking though i think Dublin Bus are doing a good job. I've used them for both work and off-work journeys and found the service to be excellent. Buses always came within 5 - 10 mins of their ETA whether late or early; morning or afternoon. Yes traffic jams are frustrating but that's something they can hardly be blamed for... :rolleyes:
If it works well; i'd say leave it be; no need to tamper with it.

Cork

Why are private sector companys in fear of competition?

Look at Bus Eireann & Dublin Bus?

Companies receiving massise subsidy. Why do they want to preserve a near monopoly?

Do they expect the sate to pick up the tab for them for here untill year dot?

mycroft

The private power suppliers are forbidden from supplying the consumer market. They are only allowed to supply the business-sector.

Ahem

Profit should not be demonised. Would you rather the company made losses?

Oh Christ...Once again, the priority of state companies is not to make a profit, it is to provide the best service possible as a subsisdised affordable rate for the entire population. That is their priority. Profit comes 2nd.

There already exists things like free student passes, and free travel for pensioners. I am not calling for these to be abolished.

And again, try and pay attention. Dublin bus runs routes which are not commerical viable, they make a loss, however, these routes provide a vital link for the community, they're a lifeline. If Dublin bus was run on a profit making priority it would scrap these routes, stranding people in some of the remoter areas of the city.

As above see rural electirification, and phones.

Massive tax-cuts and spending increases would certainly result from the mass-sale of semi-state companies and that can only be a good thing for the Health-Service, Education, roads etc. e.g. the sale of the Government's remaining 50.1% stake in Eircom netted 5 billion euro for the State.

Ah yes a massive once off sale, of course, the ineventible downsizing, outsourcing, and asset stripping would lead to tax revenue leaving the country, increased unemployment, but a temporary budget surplus.

arcadegame2004

Ah yes a massive once off sale, of course, the ineventible downsizing, outsourcing, and asset stripping would lead to tax revenue leaving the country, increased unemployment, but a temporary budget surplus.

Eircom was privatised in 1998 and since then Government tax revenue has SOARED to about 24 billion.

That revenue could help greatly to help afford future pensions for later generations by investing it in the National Pensions Reserve Fund, as happened to the proceeds of the Eircom privatisation and/or the National Development plan and/or repairing run-down schoold buildings like that rat-infested chool in Donegal we heard about ages ago. It's a far more acceptable way of raising revenue - from the public's point of view - than raising taxes (which might not even raise revenue).

Ahem

Yes well the Irish poor are now far better off than they were in the early 1990's thats for sure.

You also forget that not having to pay subsidies to semi-states would free up revenue.

Champ

Eircom was privatised in 1998 and since then Government tax revenue has SOARED to about 24 billion.

That maybe be true; but consider what happened to the telecomms market.... it's in less than an ideal state made all the more worst by an ineffective communications regulator....the network itself is substandard due to lack of effective maintenance and a considerable number of line splitters...

Yes well the Irish poor are now far better off than they were in the early 1990's

In the telecomms service? Right now i don't think so...

bonkey

Originally posted by arcadegame2004
Eircom was privatised in 1998 and since then Government tax revenue has SOARED to about 24 billion.

And the relevance of that to the privatisation is what? Are you saying that our tax revenue has gotten so much better because it privatised Eircom, or are you just dragging in completely irrelevant facts.

That revenue could help greatly to help afford future pensions for later generations by investing it in the National Pensions Reserve Fund, as happened to the proceeds of the Eircom privatisation and/or the National Development plan and/or repairing run-down schoold buildings like that rat-infested chool in Donegal we heard about ages ago.

Super idea...then we could lose 1/3 of its value overnight when we can least afford it, just like has already happened with the NPRF. As a matter of interest, have we gotten above the break-even point yet, where the net value of it exceeds the actual amount of cash pumped into it?

It's a far more acceptable way of raising revenue - from the public's point of view - than raising taxes (which might not even raise revenue).

Its also a one-off, unrepeatable exercise, so you get only one shot at getting it right. Raising taxes, on the other hand is a measure you can bring in as needed, then take out as needed, then repeat the cycle as needed.

Seems to me that privatisation as a fund-raising mechanism should - by that nature - be the last option.....y'know, like businesses typically cash in their fixed assets last when they need money, not first.

Yes well the Irish poor are now far better off than they were in the early 1990's thats for sure.

And effectively none of it had anything to do with privatisation, so what exactly are you talking about here? Or are you trying to now allocate the entire benefits our Celtic Tiger economy brought us on the decision to privatise Eircom as well?

<edit>
And as just pointed out, the telecoms industry is most certainly not better off, and certainly nowhere near where it should have been by now, given our government's initial talk of making Ireland a communications hub in Europe prior to their deciding that the best way to achieve this was to privatise the network.

But don't let anything as simple as facts stop you.....
</edit>

You also forget that not having to pay subsidies to semi-states would free up revenue.

No, it wouldn't....because those subsidies would either continue to be paid by the government to the company who bought the privatised resource (as has happened with British Rail), or hte company in question raises its charges in order to cover its costs, and the consumer ends up paying.

The only possible benefit might be that those who don't avail of a service wouldn't fund it, but the downside would be that this may in turn cause the service to become unaffordable...

I also notice with amusement that your sig has changed to a tirade against monopolies, but you continue to ignore the fact that there is virtually no state asset you are calling for the privatisation of which would actually result in anything but a private monopoly, nor have you addressed this point despite it being raised on more than one occasion.

If monopolies are so bad, then aren't we better having the monopoly controlled by the state - who at least has the public's interests more at heart than the capitalists who only seek these elevated profits that a monopoly can supposedly bring?????

jc

Victor

Originally posted by bonkey
And as just pointed out, the telecoms industry is most certainly not better off, and certainly nowhere near where it should have been by now, given our government's initial talk of making Ireland a communications hub in Europe prior to their deciding that the best way to achieve this was to privatise the network.

It is the communications hub in Europe, it just isn't the communications hub in Ireland.

arcadegame2004

Raising taxes, on the other hand is a measure you can bring in as needed, then take out as needed, then repeat the cycle as needed.

Yes but that is politically unpopular and as such, it is unlikely that one of the mainstream political-parties (not including SF therefore) would do that. So privatisation has to be considered. On the pensionfund point, I think I heard in the media that it is now making a profit.

My point on 24 billion euro was a reply to this point:

Ah yes a massive once off sale, of course, the ineventible downsizing, outsourcing, and asset stripping would lead to tax revenue leaving the country, increased unemployment, but a temporary budget surplus.

We had budget surpluses for years after Eircom was privatised, so I fail to understand why the above point is relevant to privatisation, except to say that a surplus is obviously better than a deficit. You are entitled to prefer a deficit if you feel like it though

And effectively none of it had anything to do with privatisation, so what exactly are you talking about here? Or are you trying to now allocate the entire benefits our Celtic Tiger economy brought us on the decision to privatise Eircom as well?

Well I feel that higher prices hurt the poor, and that telecom prices would be even higher than they are now had competition not been introduced. In fact, calls per minute are cheaper now than before privatisation if the line-rental is excluded, and those on disability-benefit can apply for an exemption from line-rental charge. I know someone in this position. And the line-rental charges can only come down when we have competition in this area, as the Government has already indicated will happen in the near future.

Champ

Yes but that is politically unpopular and as such, it is unlikely that one of the mainstream political-parties (not including SF therefore) would do that.

I don't think the government will be in any way popular once a service looses it potency which tends to occur after privatisation...
Take the Eircom situation. Yes you might argue about carrier pre-selection; though its effect is minimised while line rental is still paid exclusively to Eircom; who have done nothing to make it otherwise. It's really pressure; if you can call it that from Dermot Ahern who's making anything at all happening on that particular situtation.

Remember what happened to Surf No Limits?
I'm sure the people will agreed that privatisation was for the best after that..
:rolleyes:

Prior to privatisation; Ireland's network was already fully capable for broadband technologies such as ADSL. Granted it takes time to logistically provide such a service; but considering the time that ADSL technology was widely available; Ireland got it extremely late and at initial prices that wouldn't intice customers. The logical reason being?... Dial-up and ISDN offer greater sources of revenue; it wasn't in the interests of the company to provide a better service to the public...
It was really only through Dermot Ahern and the efforts of IrelandOffline that affordable broadband was finally made available; not to mention semi flat rate packages... and those were even more late considering how long our European neighbours had theirs.

We had budget surpluses for years after Eircom was privatised, so I fail to understand why the above point is relevant to privatisation, except to say that a surplus is obviously better than a deficit.

a massive once off sale

I think the point is; that it's critically flawed in that its short term. It's not a long term benefit.

Well I feel that higher prices hurt the poor

I don't think anyone could argue with that; and the former state company that got privatised has the highest prices....

competition not been introduced

And this competition is usually hammered in by high fees that have to be paid to use Eircom's network. Once again it was up to Dermot Ahern & Co to make sure that these were at least affordable; and not outrageous.

And the line-rental charges can only come down when we have competition in this area, as the Government has already indicated will happen in the near future.

Until that eventually happens we're paying out more and more. Remember the multiple price hikes in the space of one year we've had?
Sure; one could argue that the extra cash is needed to patch up the network back to spec; but remember that Ireland's network was in prime condition before privatisation...

bonkey

Originally posted by arcadegame2004
We had budget surpluses for years after Eircom was privatised, so I fail to understand why the above point is relevant to privatisation,

Because what came after the privatisation is entirely irrelevant to the decisions that were made for the privatisation.

You're using the benefit of hindsight (i.e. we had billions to spare in the years after we sold it off), rather than looking at what was the information at the time.

There was a hope, but no proof, that there would be a surplus, and unless you're memory is shaky you should recall several years where the Exchequer was literally constantly revising upwards their estimations of hte surplus and still falling short.

In other words, having a surplus after privatisation is entirely irrelevant. It has nothing to do with the decisions made for privatisation, nor can the government be faulted for not knowing the future at the time.

Well I feel that higher prices hurt the poor, and that telecom prices would be even higher than they are now had competition not been introduced.

Supposition. And what competition are you talking about?

While Eircom had - and still have - a monopoly on the physical cable being provided to private customers, they did not have a mopoly on telecoms services in general, on the provision of services over the physical line, or any of the other areas.

The areas which they hadn't opened up to competition prior to privatisation - the local loop or last mile being the most notable - are the areas still not properly opened up, despite their opening being a requirement for whoever bought the company.

In short, privatisation has done absolutely SFA to change the situation regarding competition. And even if the situation has changed, it has done so because the government has forced Eircom into opening up market areas....which it could just as easily have done while Eurcom was privatised.

I defy you to show a single area where increased competition has occurred subsequent to privatisation which did not happen at the government's insistence and which would not have been possible without privatisation.

In fact, calls per minute are cheaper now than before privatisation if the line-rental is excluded,

Or, when written more honestly :

Bills are on average higher now, although the cost-per-minute has dropped. I don't care how much teh cost-per-minute is. I care about how much cash I have to hand over at the end of a billing period, and that has not become cheaper for the average consumer.

and those on disability-benefit can apply for an exemption from line-rental charge.

And this was impossible to have been implemented prior to privatisation. My goodness, arcade.....are you suggesting that private companies are more able and willing to provide social benefits for those in need than the government is?

And the line-rental charges can only come down when we have competition in this area, as the Government has already indicated will happen in the near future.

"This area" being the last mile / local loop - the opening of which to competition was mandated to occur (if memory serves) within 6-12 months of privatisation.

So the fact that our government are promising that this will come real soon now is really comforting. They failed to force Eircom to do it prior to privatisation. They failed to make Eircom live up to contractual obligations incurred during privatisation, and now they're saying that they'll make Eircom do it in the near future?

Gosh...that really convinces me that privatisation was a success.

jc