ACT leader David Seymour reignited the privatisation debate in January, claiming we should be less “squeamish” about it. After Seymour put the tiger on the table, Prime Minister Christopher Luxon said National may seek a mandate for asset sales at the next election.
Moving control to iwi, hapū, and local communities can improve assets and services. But that’s not what Seymour and Luxon are lining up here. They want to sell to the highest bidder, which means control goes to rich-listers and big business.
Profit motivated
Private business interests will only buy an asset or service to make a profit from it. So, when a government privatises an asset or service, its reason for existing becomes to make as much profit as possible. This is the "profit motive." The profit motive drives private owners to raise prices, reduce wages, cut corners, and underinvest in essential maintenance and upgrades.
Privatisation from successive Labour and National governments showed us the profit motive in action.
In 1993, Jim Bolger’s government sold New Zealand’s railways to TranzRail for $328 million. This kicked off a disastrous 15 years of private ownership. TranzRail let railways fall into disrepair, and its rate of workplace deaths was eight times the national average. Meanwhile, shareholders pocketed more than $370 million in profit. It cost Helen Clark’s government an estimated $4 billion to buy back the railways and repair them to a reasonable standard.
Our electricity supply is currently in the grip of shameless profiteering. The Government still owns majority shares in Meridian, Mercury, and Genesis. But because private shareholders are in the mix, these generator-retailers must make a profit for them. Meridian, Mercury, Genesis and Contact raked in over $10.8 billion for their shareholders. Meanwhile, their capacity to generate electricity has increased only one percent. We pay more to get less, and line shareholder pockets while doing so.
This pattern repeats itself in privatisation efforts around the world. Shareholders make huge profits while people who rely on their services suffer. Living under the profit motive leaves us alienated and isolated from our communities. When the things we need to survive become transactional, so does our whole existence.
Who wants to Seymour privatisation?
History is littered with examples of destructive privatisation. Why is it back in the conversation?
The benefactors of privatisation will be those that can afford a share of the spoils. That's the rich listers and private equity firms that helped National and ACT bring in more than $14 million in donations last election.
The Government’s public service cuts are already laying the groundwork for privatisation. As the cuts weaken public services, the public will become increasingly dissatisfied, and more open to privatisation as a solution.
Then there's Seymour’s other pet project, the Treaty Principles Bill. According to the Waitangi Tribunal, it would “remove Crown obligations under the existing Treaty principles, and remove Treaty/te Tiriti guarantees, rights, and protections for Māori at law.” That includes protections against privatisation.
This push for privatisation requires a strategic and focused response.
Telling a better story
Winning public support for a cause often comes down to your narrative – the story you tell and how it resonates with people. At the last election, National, ACT, and their backers pushed a narrative that public services aren’t “delivering” for the public. They’ve used this narrative to justify their cuts to public services. And those cuts are making it harder for public services to deliver, reinforcing the coalition’s narrative. The next chapter in the Government’s narrative is that privatisation is the solution.
We’ve damaged the Government’s narrative with our vocal oppositions to the cuts. And we know workers and their communities can beat privatisation efforts. Last year, Te Mahinga Ora showcased how the PSA stopped privatisation in Auckland’s pools and leisure centres. Unions Wellington stopped Wellington Council selling its airport shares, and the Maritime Union of New Zealand halted privatisation in the Ports of Auckland. But we’ll need to do more as the cuts impact public services, and the push for privatisation gets stronger.
For our narrative to come out on top, we cannot just show the value of community and public services as they are now, or even as they were before the cuts. Our narrative should be about what they can be with the right leadership and resourcing. Community and public services can be the most fair and effective way of meeting people’s real material needs. They can provide the things people need to live full, dignified lives. We need to use our experience, insight, and creativity to show people how that is possible.
