By Michael West: Michael West Media.
The takeover bid for Sydney Airport all but done, a takeover frenzy grips the share market. Investors, foreign and local, know Australian governments are an easy touch, that they allow their citizens to be pillaged, that some of them actually believe the bankers’ myth that privatisation means efficiency.
SYD. Kingsford Smith, Mascot. Call it what you like, our biggest airport is a place of dreams, big and small. This is our gateway, the place where we welcomed Frank Sinatra and the Beatles, Muhammad Ali, popes, presidents, princes and potentates various. The place where Australians stepped onto a plane and set off to see, even change, the world.
Talk about a chosen place / They want to sell it in a marketplace … Well, they did. And they are doing it again (apologies to Goanna).
The privateers and their fawning pundits in the press are salivating over a $26bn takeover bid for Sydney Airport. A consortium calling itself the Sydney Aviation Alliance (Australian and international investment funds) is making the bid.
The airport’s board is unanimously in favour. Chairman David Gonski and his fellow directors have a duty to act for their shareholders; and a truckload of money has been lumped on the table, so they are willing sellers. Yet the government has a duty to act, not for shareholders but for the nation; and there is zero evidence that politicians ought to be selling off essential monopolies, assets which belong to all of us, at all.
Who will be paying the price? You will. Travellers, taxpayers, all of us will pay. The financiers are using other people’s money in the takeover, bank money money bloated by the $300 billion “printed” by government during the Pandemic: QE money that is, the money which is now pushing interest rates up.
Besides their “free money” from government printing and assorted public subsidies, they and their fee-taking hangers-on will take large fees during the deal and profits via higher charges in its aftermath.
All of this might be okay if the public were to benefit too.
But will SYD be more efficient? Cheaper for travellers? No. The mania for private ownership of this public asset has already given us a place with a shabby feel, even compared to some Third World airports, after 20 years in private hands, 20 years where it has paid no income tax.
Aged care, electricity, toll roads too
It’s not as if the public does not already know the score. How about the privatisation of Australia’s nursing homes, the electricity grid, our city tollroads? Is it the elderly, the energy customers or the motorists who benefit? No, it is the fee-takers and financiers, every time. And political parties too, which get their chop in political donations to keep governments onside.
We’ve got some of the highest gas prices in the world, electricity prices too, a failed nursing home sector where hundreds died of Covid, and some motorists who have to pay hundreds a week in tolls just to get to work and back.
If the definition of insanity is to keep doing the same thing while expecting a different result, why do they keep doing it? Because an increasingly craven press, funded by corporations, has relentlessly pushed the line – against all evidence – that privatisation is efficient.
We are seeing a takeover frenzy on the sharemarket. Investors, foreign and local, know that Australian governments, are an easy touch, that they allow their citizens to be pillaged, that some of them actually believe the bankers’ myth that privatisation means efficiency.
The airport was privatised, gutted by Macquarie Bank, flogged again onto the sharemarket, propped up to the tune of hundreds of millions during Covid, and now another bunch of financial players is about to cash in.
At least it’s not Macquarie, with its particular flair for exploiting other people’s property, which won the deal to milk this golden gateway to Australia. The industry super fund collective may be a bit less rapacious, although there is a Wall Street mob in the mix which is not there for the public interest, or to lower prices.
Our airports are milked dry, just like the electricity grid, just like the toll roads, where regulators have allowed a monopoly of monopolies to emerge in Transurban. But the one which takes the cake, right now, is the $17bn takeover bid for electricity mob AusNet Services.
Ausnet heads for tax haven
Already controlled by Singapore and China – 32.3 per cent owned by Singapore Power, 19.9 per cent owned by State Grid of China, it is now subject to a bid by the financial engineers and tax haven merchants at Brookfield.
This crew is the ultimate in cuff-linked piratacy. Brookfield’s Australian entity BPIH pays no tax. But Treasurer Josh Frydenberg has waved through their takeovers of 41 private hospitals – control passes to Cayman Islands and a nursing home empire (Aveo), control passes to Bermuda.
Where will Ausnet and its critical infrastructure be headed? Likely the Foreign Investment Review Board will wave this one through. Apparently taking Aveo and Healthscope to tax havens was not against the national interest.
Privateers win, taxpayers lose
Taxpayers lose, along with consumers, because these takeover operators who are exploiting Australia’s penchant for privatisation, don’t pay tax. Not Brookfield, not Jemena, no Sydney Airport, not Transurban.
It is bizarre that despite the blatant, irrefutable evidence the privatisations fail, we keep doing it. In fact it is accelerating. What is the end game? Do the takeovers just keep getting bigger until we just have one big corporation fused with the state? And millions of consumers either on that corporate gravy train or hostage to its rapacious pricing?
The pandemic has increased inequality. Yet corporate welfare runs amok. Treasurer Josh Frydenberg squandered $40 billion in the biggest transfer of wealth yet from Australian taxpayers to large corporations in history.
This is not a capitalist government, this is crony capitalism where policy is increasingly in hoc to foreign corporate players. Regulation has failed, yet free markets have failed too. Nonetheless, a tamed media trots out the privatisation and “free markets” propaganda while the central bank prints hundreds of billions of dollars to keep the money swishing about at the top of town.
And how it has done that. The money showered on corporate Australia – indeed by foreign governments too via QE – along with a surge in asset prices, has unleashed a takeover frenzy like never before. Some of it is trickling down to our superannuation accounts, for now, but when that party ends, Australia will emerge with a more concentrated, more powerful corporate sector running the show which we call government.
Michael West established michaelwest.com.au to focus on journalism of high public interest, particularly the rising power of corporations over democracy. Formerly a journalist and editor at Fairfax newspapers and a columnist at News Corp, West was appointed Adjunct Associate Professor at the University of Sydney’s School of Social and Political Sciences. You can follow Michael on Twitter @MichaelWestBiz.