May 8th 2004

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Articles from this issue:

COVER STORY: Trade deal - surrendered sovereignty

EDITORIAL: Competition policy destroys retail liquor competition

NATIONAL AFFAIRS: Will new NCP inquiry be a whitewash?

COMMENT: Economic zealotry triumphs over commonsense

EMBRYOS: Cloning - a licence to kill

STRAWS IN THE WIND: Fallout from hospital strikes / Lots of help for MPs

ENVIRONMENT: PM at odds with Murray River report

HEALTH: Sexual reassignment at age 13!

Expert advice? (letter)

Dairy industry (letter)

Latham and Asia (letter)

DEVELOPING WORLD: Grameen Bank - banking on the poor

EAST ASIA: Why Japan is building a ballistic missile defence

BIOFUELS: Sugar industry forum on ethanol

COMMENT: Iraq is not Vietnam

HUMAN RIGHTS: Vietnam's sex trade shame

FAMILY: Why John Howard is right on marriage

ASIA: Why Taiwan should be in WHO

BOOKS: LEFT ILLUSIONS: An Intellectual Odyssey, by David Horowitz

BOOKS: The Coming Of The Third Reich, By Richard J. Evans

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Economic zealotry triumphs over commonsense

by John Rau MP

News Weekly, May 8, 2004
I heard a joke the other day - an example of the gallows humor for which we Australians are well known, I suppose.

It went like this: "What have Joseph Stalin, Pol Pot and National Competition Policy (NCP) all got in common?"

The answer? "They are all examples of ideological zealotry triumphing over community values and commonsense"

NCP is an economist's wildest fantasy, a policy that is programmed to root out and terminate any sign of deviation from the economic orthodoxy which holds that competition will solve all problems.

Commonsense irrelevant

NCP has nothing to do with commonsense. In fact, commonsense is quite irrelevant. All that matters is to "believe" in the cleansing power of competition, and to employ missionary zeal.

Those of us who live in the real world understand that free markets and competition do not solve all problems.

In fact, without regulation of markets, consumers would be eaten alive by spivs, profiteers and criminals. Unrestrained competition and free market economics guarantee one thing: corporate profit.

The fact that these policies may gut regional economies, export our manufacturing jobs and destroy the fabric of communities, is irrelevant. What matters is the purity of the idea.

Can't think of any examples of NCP impacting on your life? Let's start with the jewel in its ideological crown, the National Electricity Market. Only NCP could have conceived of a concept so exquisitely stupid and sold it to a gaggle of gullible governments.

NCP wanted to get rid of state government power monopolies (such as the Electricity Trust of South Australia) which produced, distributed and sold electricity to consumers at a fair price. ETSA produced tens of millions in dividends to the state each year, which meant lower state taxes and charges. It worked well and South Australians were happy with it, but theory said competition would do better.

We now have what the NCP always wanted, a National Electricity Market, with a number of mainly foreign-based generators, pushing to maximize returns to their shareholders. We have a foreign-owned distribution monopoly doing the same.

You can judge for yourself what an overwhelming flop "retail competition" is for consumers. Interruptions to power supply are now talked of as if we should tolerate them.

The bottom line is that we consumers are paying through the nose because of NCP. Greater efficiencies may be delivered one day, somewhere in the system, but a two-year-old can see that any gains will be gouged by shareholders, not returned to consumers. Every time you get an electricity bill, remember NCP.

The next big one that will grab your attention is gas. Just wait till you see what NCP will do to your gas prices!

It is about time that we saw things in terms of the impact on our neighbours, be they city-dwellers, farmers, rural workers, or any one of the many whose livelihoods are being destroyed in the name of economic purity.

NCP does not confine itself to meddling in big-ticket items like energy markets. No, it seeks to inflict its agenda on all facets of our lives. In fact, the National Competition Council has been looking at 171 pieces of existing legislation in SA (excluding electricity and gas).

The states are threatened with financial penalties if they have the gall to disobey its edicts. NCP uses the Federal Treasurer as its enforcer. He obviously agrees with NCP because he has the power to ignore the eco-zealots, but chooses not to.


At the end of 2003, it had another go at South Australia, with the state pushed to change legislation relating to barley and chicken meat producers. These changes would hurt our farmers. The Government has so far withstood the financial blackmail, but we have been fined $5 million for being disobedient.

In both cases, the NCP wants to force South Australia to sacrifice income and employment opportunities in our industries to competition policy.

Neither the State Government, the industries concerned, nor (privately) most State Opposition MPs agree with this. The Federal Government however, is a willing accomplice in this lunacy.

Stalin and Pol Pot are now mercifully long gone. What a shame that NCP has yet to join them in the dustbin of history.

  • John Rau is South Australian State Labor member for Enfield

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