privatisation

The PPTA and the Green Party are united in their criticism of online schools

What a coincidence, yesterday the Green party put out a press release on Voxy about online schools and only seven minutes later the PPTA did one as well.

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Clearly, neither the Green party nor the PPTA supports online schools. Here is a brief summary of the points each group made in their press release.

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Bill English’s state housing reform is privatisation by stealth

Like an insidious slow rot, Bill English wants to get his hands on part of the $16B worth of cash currently locked into government-owned social housing stock.  This is one of the most under-the-radar National reforms that may have a substantial effect.  John Armstrong muses

Bill English’s masterplan to radically “reform” the Labour-initiated, octogenarian state housing scheme has all the hallmarks of being ideological for ideology’s sake.

The power combo of English and the Treasury is a pretty unstoppable force at any time. Implementing a policy in tune with its world view, the Treasury has been let off the leash, albeit briefly. It is just like the good old days before MMP and the advent of prime ministers obsessed with opinion polls and little else.

That the policy may yet be a complete dud does not seem to have penetrated the minds of those responsible for writing the relevant Cabinet papers. It is enough that the winner from the restructuring of “social housing” – the more anodyne term that National prefers to use – is the private sector.

I’m all for Government getting out of things they have no business being in.  But we are still to see a clear explanation how English is going to encourage the private sector to take on the least attractive and possibly loss-making tenants in a deal where they take all the risk.   Read more »

Huge Dom Post ACC Beat-up Continues

Huge ACC Salaries?  How “huge”?

The maximum someone receives under ACC is 80% of $113,768 or $91,014.40, pretty close to the “huge” salaries of ACC staff will Stuff’s follow up story be about how many people are earning the maximum payout rather than painting them as “victims”?

The ACC Dom Post hate campaign continues based on disgruntled claimants and sensationalist media beat-ups.

The incorrect claims with correction have had to be repeated here and here.

Stewart wrote that the revelations about the privacy scandal was a ”defining moment” for ACC. A survey showed public confidence in the insurer fell from 58 per cent to 49 per cent.
The report also showed ACC accepted 1.7 million new claims over the year. Total claim payments were $2.6b – or just over $7m per day.


Falling from 58 to 49 per cent seems to not be so large given the size of the campaign against the Organisation and staff is not surprising.

The most obvious conclusion from Vance and Kitchin’s reporting is the need to privatise ACC.

Ending the Curse of State Monopolies, Ctd

The Telegraph

The left wing loves state monopolies. There isn’t a problem that they think can’t be solved by creating a government department. Education is best done in the state sector according to them, same with hospitals…prisons is yet another. Every time something goes awry at a private prison the left wing jumps up and down, never mind that the Corrections department has the same issues…nevermind that the private operator faces fines and penalties.

The same thing is happening in the UK and the difference in response to a crisis is stark:

But the real issue here comes back to G4S itself. The firm is following the right post-crisis formula: admit you’re wrong, apologise, and try to put things straight. It is paying back some public money. Still, the brand has taken a serious battering, and it will be politically difficult to grant it further contracts for the immediate future.

Compare this with how the public sector behaves when it gets things wrong. At the Department for Work and Pensions, the Government’s auditors recently refused to sign off the accounts, because civil servants had lost nearly £5 billion of taxpayers’ money through bodges such as the overpayment of benefits. This is a massive amount of money – but nobody will resign. Nor has there been much media attention. Why? Because the same thing has happened every single year for a quarter of a century. It’s the norm.

This is the single biggest reason to reject the Left’s argument that public service outsourcing must be stymied. As Hinchingbrooke shows, the right kind of reform can turn around shoddy government monopolies and transform them into huge success stories. Yes, there are problems with outsourcing – but the answer is not to rein it in, but to be more radical still.

Ending the curse of state monopolies

The Telegraph

Labour blew a chance at bagging the Tories over privatisation with the G4S security debacle. they will be wishing they had of manned up:

At the height of the G4S security fiasco, I am told – by a reliably authoritative Labour figure – that some in the shadow cabinet were pressing their leader to stir up an even bigger row about the role of the private sector in public work. The operation was postponed, on the grounds that voters didn’t want politics during the Olympics. But once the Games were over, said the leadership, the battle could start.

A spanner has been thrown in the works, however. Hinchingbrooke Hospital in Cambridgeshire, previously described by ministers as “a clinical and financial basket case”, released its latest performance data yesterday. In just six months, waiting times had been turned around – from the worst in the region to the best. Patient care had improved; satisfaction ratings were higher than ever. Money was no longer being wasted. Staff morale was up. Even the unpopular car parking fees had been scrapped.

The reason? Last year, Hinchingbrooke was taken over by the private sector. Under a new employee-ownership deal, hospital staff became part-owners of the managing company, Circle, so all had a personal stake in making the project a success. Yesterday, Circle announced the opening of a new hospital in Reading, using the same model – meaning more good news for patients.

Perhaps Tony Ryall could take this model and apply it to our health sector.

The benefits of private operators

The left wing moans endlessly about privatising the operation of things like prisons and hospitals but they over look the benefits of the system….like penalising them when things go wrong.

The operator of Mt Eden prison has been fined $150,000 after a prisoner escaped.

The company, Serco, and the Corrections Department have carried out a review of security after notorious inmate Aaron Forden escaped from the prison in the early hours of October 10 last year.

The two groups say both operational security and the physical security of the building infrastructure have now been enhanced.

Department of Corrections Chief Executive Ray Smith says a portion of the payment to Serco for the management of Mount Eden prison is performance-related.

He says it’s appropriate to levy a financial penalty for the escape.

If the state was still operating the prison there would be no penalty and no corresponding incentive to conduct a review and improve security as a result. The problem with the astate operating anything is a complete lack of accountability. Serco has now found out what accountability in the private sector looks like.

There is nothing like a short sharp shock to the bottom line to improve performance.

Privatised Public Services works

via Andrew Sullivan

At the American Spectator (arrivistes!) Iain Murray and Matthew Melchiorre report on the success of a privatised fire service in Chatham County, Georgia:

Free riders bankrupted London’s fire insurance companies by taking advantage of their fire services, but the free rider problem is not insurmountable. Had the two services been operated separately, the insurers could have incentivized the purchase of fire company subscriptions by offering clients discounts on premiums. Meanwhile, the fire company could have averted losses by billing non-subscribers for its services. Such a system actually exists today in Chatham County, Georgia, at the Southside Fire Department (SSFD), a privately run and subscription-funded fire, EMS, and security company.

The SSFD began in 1961 with only $10,000 and a handful of entrepreneurial volunteer firemen who bought a fire truck and offered subscription-based fire protection to the residents of the then-unincorporated southern section of the county. Today, the SSFD has a budget of $10 million and provides fire prevention and suppression services to half of Chatham County at a net financial gain to subscribers, as the discount offered on the homeowner’s insurance premium from purchasing a subscription outweighs the cost of the subscription itself.

This is an elegant solution. Lest you think the idea of privatised fire services is the preserve of heartless Randian nutters* in the Deep South, consider that Danish fire (and ambulance) services have largely been run by private companies for more than 80 years. The lesson of this is that public service provision – even of “core” functions of the state – should not be a matter determined by partisan orthodoxy.

I love that last line, it is work repeating. “The lesson of this is that public service provision – even of “core” functions of the state – should not be a matter determined by partisan orthodoxy.”

National aren’t making a good case yet for partial privatisation or even introducing competition to the state sector. If Labour were half competent National would pull back, but they can’t even run a website so fat chance of them holding the government to account.

Good…Labour now supports privatisation

Since everyone else has taken leave of their senses to go have a cry, I’ll take up the debate. Seriously its rotten bad luck and all that, and terribly sad for 29 families but really to suspend discussions and daily life is really just sooky behaviour.

Now, let there be no more carping, mewling and whining from Labour about privatisation anymore. They have now embraced it. I think they announced this during the Pike River disaster in the hope it would fly under the radar. But for other sooky media, bloggers and politicians it just may well have. Rumour has it that Cunliffe had two speeches… one when the news was buried by other events, and another that didn’t signal any economic changes.

Labour will make bold changes to the economy including allowing public-private partnership for transport, considering an “inbound transactions tax” and allow private shareholders to own shares in subsidiaries of state owned enterprises, finance spokesman David Cunllffe said today.

In a speech to the Institute of Policy Studies in Wellington Mr Cunliffe said Labour would not go on a spending spree, but would reduce net debt and build a stronger capital base.

He said private equity in SOEs’ subsidiaries would not dilute taxpayer equity or lead to wholly or partially privatising the SOE.

In some respects this is a little strange because they pulled out of endorsing PPPs and now they are back in.

Predictably there are some upset pinkos which means this policy is actually a good one from Silent T.

It is good in the sense that it finally removes the scales from the eyes of Labour with regards to privatisation. No Right Turn points out the details behind the policy on privatisation.

Which is technically correct – instead we have a partially privatised subsidiary. But by permitting that, he effectively gives away the farm. To point out the obvious, Kiwibank is not an SOE, but a subsidiary of one (NZ Post). And this policy means he has no objection to selling it to rapacious Aussies. More generally, by allowing part-privatisation of SOE subsidiaries, he removes any grounds to prohibit it in the SOEs themselves. The result is to open up space for National to do exactly that.

Yep, good idea. Move ACC to be a subsidiary of an SOE. Kiwibank is already primed under Labour’s policy….I’m sure there are even more. Time to get cracking.

In fact make one big SOE…call it…oh I don’t know…something like…NZ Government Limited…then make all other departments subsidiaries of the new Super SOE….presto…and all under Labour’s cool new privatisation policy.

Then the government can post out share certificates in the all the new SOE subsidiaries and let people decide for themselves whether they want to maintain “their” investment in those SOE’s or sell them down.