To Privatise or not to privatise? THAT is the question
I was knee deep in writing ‘Leaders Behaving Badly (What happens when ordinary people show up, stand up and speak up) when I developed a serious interest in ‘green’ companies.
At the time I was working with a large corporate as an HR Consultant when I realised the business was very blasé about implementing any kind of waste/green/environmental policies. ?It was, chase the dollar all the way.
When I did further research, I was alarmed to discover so many of our global corporates seem to have zero sense of urgency around ‘environmental’ issues, but it was when I discovered the damage mining companies were doing to waterways that I really woke up.
Suddenly I cared deeply about water! There are two things life on earth requires to survive, air is one and water is the other.?
I’m currently following the largest water company in the UK as it faces bankruptcy, which is bad enough, but the real problem is that for years they’ve paid healthy dividends to shareholders whilst letting the infrastructure fall into such disrepair that the equivalent of 250 Olympic size swimming pools leaks from ailing pipes, every single day. This doesn’t factor in the raw sewage leaching from failing pipes, or the chemical spills that now flow directly into rivers killing all fish and polluting the water supply to homes.
Thames Water was privatised in 1989. Since 2016 profits haven’t even covered the cost of interest on their debt, yet they continued to pay shareholder dividends. What sort of business model is that?
Sadly it isn’t just Thames Water that follows this business practice, many other privatised water companies around England have followed the same trajectory. ?
It looks as though the English taxpayer is going to have to bail out a company that has failed so miserably and polluted waterways so badly. The good news apparently, is that the company ceased paying dividends to external shareholder 5 years ago, they did NOT however, cease paying dividends internally. ?It would appear the CEO (Sarah Bentley), who received a salary of $NZ3,324.000. continued to receive her performance bonuses equal to that of her salary despite watching the company rapidly go downhill. She was rewarded handsomely for not only destroying the company, but destroying the only product of her company – water. ?
Following my research, I discovered that 96% of rivers and lakes in both the South West and South East of England, were found to contain what are now known as ‘forever chemicals’. It’s estimated that in London, 91% of rivers and lakes now contain toxic chemicals.
Meanwhile Scotland, did NOT privatise water and 67% of it’s rivers are in good health.
So privatisation v nationalizing?
A UK based company called ‘We Own It’ crowdfunded a ‘People’s Plan for Water’ manifesto and discovered that the public wanted:
·????????Water run for people not profits
·????????Proper investment in water infrastructure
·????????Money spent on cutting water bills rather than being paid out to shareholders
The company offers 10 reasons why privatisation is a terrible idea (I’ve selected 4 of them, but you can read the full article here):
1. Your services get worse: Public services involve caring for people but private companies make their profits?by cutting corners or underinvesting in maintenance.
2. Privatisation costs you more. You pay more, both as a taxpayer and directly when public services are privatised. Profits must be paid?to shareholders, not reinvested in better services.?Interest rates are also higher?for private companies than they are for a government.
3. You can't hold private companies accountable. If a private company runs a service, they are not democratically accountable to you. You don't have a voice. Contracts to deliver public services are agreed between private companies and government behind closed doors. There is very little transparency, public accountability or scrutiny.
5. Privatisation creates a divided society. Public services are important to meet everyone's basic needs, so we can all be part of the community. Schools and hospitals are not optional extras. We all need and rely on public services - they are universal. That means they need to be accessible and high quality for everyone. Privatisation often goes hand in hand with encouraging richer people to pay more to opt out of the services we all use. This leads to division, making it harder to provide excellent public services for everyone.
Like most people I chug along living my life, possibly not taking much of an interest in public services. Like most people, I simply take them for granted. After all, I live in New Zealand where we have a very healthy rainfall each year. We have a small population and an abundance of rivers and lakes. I checked OUR water quality versus the rest of the OECD and discovered we are doing pretty well, we rank 4th in good water quality out of the 30 OECD countries, so we can relax right?
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Not so!
Despite our small population, we too have an aging infrastructure problem. It is estimated that we need to invest between $70b and $96b over the next 30 years to upgrade our water and sewage systems. ?With a population of 5 million, that’s an awful lot of taxes we are going to have to pay.
As of January 2019, Auckland fares the worst water quality in NZ. 62% of our rivers and lakes were graded poor by the Ministry for the Environment for swimming and 0% of rivers and lakes were graded as good.
Wellington has been facing massive infrastructure challenges for years, and subsequent councils have simply kicked the can down the road, like so many other NZ towns and cities. We can’t keep kicking the can down the road!
Sometimes we change when we see the light and sometimes we change when we feel the heat!
After the recent research into water issues for our planet, I am now 100% against privatising water, electricity, hospitals, prisons, public transport and schools. These public services are way too precious to risk being used for shareholders to make massive profits whilst allowing the systems that hold each service together, to be run into the ground.?
Privatisation is quite simply capitalism, and as John Maynard Keynes famously said:
‘Capitalism is the extraordinary belief that the nastiest of men, for the nastiest of motives will somehow work for the benefit of all’
Ann Andrews, CSP. Author, speaker, profiler, Life Member PSANZ
Author of:
Women Behaving Courageously: How gutsy women, young and old, are transforming the world
References:
https://www.lawa.org.nz/explore-data/water-quantity/water-quantity-national-picture/international-comparisons/
https://www.newsroom.co.nz/under-the-surface-of-our-ageing-water-infrastructure