Peter Costello, Tony Abbott, the Queensland LNP and privatisation

Last week, I had a piece published in Crikey (cross-posted at Croakey) arguing Queensland Health Minister Lawrence Springborg’s privatisation push foreshadowed the Newman government’s embrace of the recommendations of the Costello Audit.

John Quiggin and others have deftly demonstrated both the rubbery nature of Peter Costello’s figures and the perverse logic of privatisation. I think the story that a lot of us Queenslanders have read about the failure of the private owners of the Brisbane Airport to bother building a parallel runway which was recognised as being needed by 2007, preferring to make big bucks from leasing and carparking, shows public common sense running along the same tracks as expert econometrics.

Even Deputy Premier Jeff Seeney accepts this, though he prefers to blame Kevin Rudd and Anthony Albanese, and to close his eyes to the root cause – that a public facility has private profit seeking owners, and market rationality might push them towards building a big car park rather than a runway.

Then we have the strange contradiction between the Brisbane City Council’s claim that it needs to outsource services and the fact that it has huge debt built up from PPP funded tunnels whose operators have fallen over one by one (a bright idea from Mayor Campbell Newman) and the Newman Government and Costello Audit’s allegations about Labor Debt.

There’s no doubt that privatisation is unpopular, and rightly so. Preaching about purported superior efficiencies does not convince when everyone experiences in their daily lives the hopelessness and price gouging of monopoly private entities. That’s why a lot of infrastructure (or “assets”) were government-owned in the first place.

There’s also no doubt that Peter Costello’s onto something when he describes his Audit Report (which we can’t of course read yet) as a template for a putative Abbott government.

We could talk til the cows come home about Anna Bligh’s judgement in announcing privatisations so soon after the 2009 Queensland election, when Labor’s win owed so much to prioritising jobs over the demands of international ratings agencies. Rightly, Annastacia Palaszczuk could not have been quicker to renounce asset sales on becoming Opposition Leader in March 2012.

Labor governments are always going to face a structural contradiction in privileging public investment and equal access to services on one hand and the demands of business and markets on the other, until they formulate alternative economic strategies.

There’s no doubt that Labor made severe political mistakes in Queensland, where for a number of reasons, privatisation is particularly despised.

(Here’s an interesting piece from Laura Tingle, incidentally, on the Springborg Health privatisation push, and the “increasingly disgraceful Coalition refusal to outline any serious policies”.)

But, how has the LNP got itself into such a mess? John Howard advised the state party to embrace privatisation, which rather calls into question his storied political smarts. Before Christmas, we had speculation that the LNP would go for an early election, to cast off some of its unruly backbench (then defecting to KAP, independence and/or a Palmer Party at an alarming rate), and to seek support for selling stuff off so it could promise goodies.

People want state services, and the dire trajectory of the Newman Government’s fortunes is a reflection of that.

But they’re snookered by their own, dare I say, “narrative”. Labor Debt! Cupboard Bare! Costello Says So!

On the weekend, we had warnings in the Courier-Mail that Campbell Newman might be disappeared by his own party over night, in manner of the Kevin Rudd and Ted Baillieu vanishing acts. I don’t pretend to see into the minds of LNP Ministers, but it’s probable that all this reflects actual mutterings. It’s incontestable that it reflects an actual strategic dilemma.

The way the LNP has tried to prepare the path for privatisation is absolutely dependent on Magical Thinking. They know it’s unpopular, but they hope to overcome this by blaming Labor Debt (while the fact remains that the state is in a sound fiscal position). Perhaps Peter Costello and Tim Nicholls convince themselves. I don’t know.

You would imagine Treasury would give them accurate advice.

Maybe it’s ideology pure and simple. Campbell Newman might see himself as a pragmatist, but his uncritical embrace of market logic and his playbook of political moves push him towards the dismantling of the public sector.

But the three card trick of an Audit Commission, followed by public sector cuts, followed by privatisations no longer convinces the public.

The interesting question will be whether Tony Abbott can get away with it. We hear a lot about the federal Labor ‘brand’ being a “drag” on state parties. I suspect the reverse will be true in Queensland – Campbell Newman is actively working against Tony Abbott. The irony is that the federal Coalition intends to follow in his footsteps.

Interesting times!