Sunday, December 12, 2010

Watch out for the National Water Commission

In today's The Australian, it is reported that the federal government is considering linking prices to dam storage levels and opening the water supply in cities and towns to further competition. I am alright with the first part. It makes sense that water bills rise when storage levels go down, as long as water bills also go down when storage levels go up.

What worries me is the second part: in order to boost competition, it is reported that the government may dismantle some public monopolies that control supplies in big dams. We have seen that all the so-called "free competition" that is supposed to result from selling off of public monopolies has only resulted in private monopolies. Even where more than one player exists, there seems to be a collusion going on between Woolworth and Coles, Telstra and Optus, Shell and Caltex, the Big Four Banks, etc, etc. The government needs to gain back more control over the supply of essential goods and services, not less. The government should set up a government-run bank to compete against the big four banks. The government should set up a housing development unit to lead the way in bringing down house prices. Yes, in this era, we need more government control, not less. Private companies are having a party making record profits, while pretending to be victimized whenever any policies are in place to take away their freedom to print money.

Watch out for more spin form the NWC. James Cameron, the acting chief, is going to tell you how good it is to privatize the remaining controls Canberra has over water supplies. Perhaps the federal budget is running into deficit again.

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