Editorial:

People before profits

For decades governments have taken responsibility for the 
provision of infrastructure and essential services such as 
education, water, sewerage, electricity, gas, roads, public 
transport, post and telephones. In taking responsibility, they 
have provided public services, totally or partially funding them, 
and have been publicly accountable through parliament. The 
majority of the population (apart from some rural and Aboriginal 
communities) have taken it for granted that water would flow out 
of taps in their homes, that electricity would provide light and 
heat, or that our cars or buses would freely use the roads.

We paid our taxes to government and government provides the 
necessary services to meet the needs of society — both 
individual, personal needs and those of businesses and the 
community at large. In some instances we might pay for the 
service or use of infrastructure such as electricity, telephones 
and rail, and in other instances it would be provided free of 
charge (eg roads, education).

The prime purpose of a service was its provision to meet a need. 
Thus, public transport was to serve the needs of people to 
commute to work, to school and so on. This may sound obvious and 
logical. After all, why else would they be provided?

That was the case before the economic rationalists took over. 
They set about corporatising government utilities and services to 
put them on a commercial footing. This was then extended to 
making "reforms" to enable government "businesses" to recover the 
full cost of a service through "user pays" and other means.

Competition policy followed, with the abolition of cross-
subsidisation and the introduction of private sector providers. 
The next step was to make a profit. When the service became 
profitable, it was sold or public ownership and provision was 
replaced by "public private partnerships" (PPPs) where the 
government takes financial responsibility (ensures profits flow) 
and the private sector provide or manage the service and pocket 
huge profits.

There are endless government reports on public services and how 
to put them on a profitable footing — or in other words 
fattening the turkey for the corporate table.

Cross-subsidisation works through the most profitable sector of a 
service subsidising the sectors which do not make a profit. Thus, 
Telstra has an obligation to fund telecommunications in regional 
and remote areas so the people in those areas pay the same for 
their services as those in the densely populated cities.

The abolition of cross-subsidisation means that services are cut 
or users pay more where it cost more to provide that service. 
This applies to many services, such as Australia Post and rail 
services. The concept of universal access and uniform rates is 
being eroded and replaced by a new regime of making everything 
turn a profit — focusing on every individual situation rather 
than the totality of the service and community needs.

It is approaching the point where, every train trip, every letter 
delivery to every address, every phone call to every destination, 
every drop of water to every property — all will have to make a 
profit.

This process is evident in the NSW public transport system where 
the government has proposed emasculating rail services — 
focusing on peak periods and cutting services with smaller 
patronage.

The overriding reason for private provision of services is 
profit. The service itself is no longer the raison d'κtre: the 
service becomes the vehicle for generating revenue for the 
coffers of big business. Public need comes a distant last, if it 
enters the picture at all.

Every public asset and service is now in the firing line for 
privatisation, from education through health to welfare. Those 
parts that can't be made profitable — many public services were 
never going to make a profit and were never meant to — will 
either become a second rate, under-funded service provider or 
will be scrapped altogether.

It's time to challenge the assumption that essential services 
should make a profit and return to the collective, efficient 
public provision of services for the public good.