muzzamo wrote: ↑Fri Dec 20, 2019 11:02 am
The State of South Australia is incapable of eking out efficiency gains due to the baked-in inefficiency of the public service and this is one of the reasons that the operations are being outsourced.
Or maybe the Government of South Australia is unwilling to eke out efficiency gains due to their baked-on ideological commitment to neoliberal economics.
Privatisation of transport and utilities generally doesn't work. It has been shown again and again to produce inferior, more expensive services.
The only thing which can make private enterprises more efficient than the public service is competition. Competition is what drives companies to be efficient and deliver the best services. If there is no competition, there is little incentive to find inefficiencies. If you have a monopoly, it doesn't matter how badly you deliver the service, because people are unable to vote with their feet by choosing a better performing competitor.
Government monopolies are inefficient. However these inefficiencies are generally moderated by the fact that the public service exists to serve the public. The government monopoly's ultimate objective is to deliver a public service, so its efforts go into serving the public, even if it is inefficient at doing so.
On the other hand, the ultimate objective of private monopolies is to make profits for their shareholders. If providing an inferior, more expensive service for customers allows the private monopoly to generate larger profits, then it will provide inferior, more expensive services. This is especially the case for services that people need rather than want, like transport and utilities. People need to travel to work, and so they will continue to do so even if ticket prices are raised or service quality reduced. Privatised transport operators know this, so they will raise prices and reduce service quality to increase their profits. Customers are unable to fight back because they are unable to hit the extortionist company's bottom line by choosing a competitor.
The reason the Liberals are privatising trains and trams is because they have an irrational ideological belief that privatisation and the reduction of the size of the public service are good things. They do not have any coherent, rational argument as for why privatisation actually benefits the people of South Australia.