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Issue #1591      May 1, 2013

NSW ports sale – other assets at risk

The people of Australia could be forgiven for thinking that the privatising and de-regulating ardour of state and federal governments would have cooled in the wake of the global economic crisis. The lack of government levers over the economy clearly exacerbated the latest cyclical crisis of capitalism that started in 2008 and which still threatens disaster for many countries. But it seems governments are using the economic gloom to justify a new wave of sell-offs of the people’s property. Queensland did it in 2010 and now NSW has announced the sale of major ports – Port Botany and Port Kembla – for $4.3 billion. According to Treasurer Mike Baird, “It’s the largest ever NSW government asset transaction in terms of net proceeds.”

Port Kembla up for sale.

“The O’Farrell government has sold off the family silver,” ALP shadow treasurer Michael Darley said. He didn’t mention his own party’s record of privatisation while in government and, while the image of a shady deal conducted at a pawn shop is appropriate at one level, it underestimates the damage done. The family silverware has only sentimental value. The ports in question generated income and public ownership enabled some control over container volumes and, hence, traffic around the terminals.

A controversial aspect of the sale is the scrapping of the annual 3.2 million container movement cap at Port Botany. Treasurer Baird insists the resulting congestion will be eased by the construction of WestConnex – a major road transport link to be built between the M4 and Port Botany. This will be paid for in part with the proceeds of the sale of the ports. Funds are also earmarked for upgrades to the Pacific Highway. The sell-off is being portrayed as a “win/win” for the people of NSW but, increasingly, they are being treated as bystanders.

A startling sweetener for the deal was the granting of planning powers to the new owners. Even pioneering right-wing employer Patrick Terminals is crying foul. Its submission to the Department of Planning and Infrastructure complained that allocating planning powers to a private entity “may raise public interest issues at a future time, given the possibility for the new lessee to have competing interests in port ownership and operations in other locations.” Arguments rage about whether sale agreements allow for such unprecedented autonomy in the case of developments carrying a price tag greater or less than $100 million.

Patrick is worried that a decision to build a cruise ship terminal, for instance, could adversely affect its activities. The public should worry that such a piece of privatising fanaticism was ever entertained in the first place. If the proposition is allowed to stand, it could be a harbinger of things to come; where the capitalist state steps out of even its most token regulatory responsibilities. It is noteworthy that the sale of the ports is being transacted between the publicly-owned Sydney Ports Corporation and Ports NSW – the sort of gimmicky name increasingly favoured by Australian governments for its entities. The proceeds are to be into an investment fund known as Restart NSW.

For workers perhaps the most disturbing aspect of the deal is that four-fifths of the money involved is coming from industry superannuation funds. Industry Funds Management, Australian Super and Queensland’s public sector superannuation fund, QSuper have joined Tawreed Investments Limited, a wholly-owned subsidiary of the Abu Dhabi Investment Authority, in the deal. The use of workers’ deferred wages as a pot of speculative investment money for the privatising of people’s assets raises the question again about how “super” superannuation is for workers. It underscores the need for a national superannuation scheme under public control.

Technically, the NSW government is selling a 99-year lease over the facilities but, in business terms, a century is rightly considered to be essentially forever. The battle to bring these assets back into public hands will be tough. The O’Farrell government will be hoping the sale is pulled off without a major public outcry. If that happens, the sell-off of electricity distribution can be moved up the neo-liberal agenda more quickly.   

Next article – Offshore deaths soar

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