||Volume 16, Number 4, March 2004
Privatization: Who wins, and who loses?
by Chris Bocking
I was fortunate to hear Seth Klein, from the Canadian Centre of Policy Alternatives, speak in mid-November about the winners and losers in the provincial government’s push for privatization.
"We must fight against the TINA syndrome," said Klein. TINA stands for "There Is No Alternative." Right-wing governments traditionally repeat that message over and over, and now that it has been faithfully chanted as a regular mantra by the corporate media (The Times-Colonist, The Vancouver Sun, CTV, etc.). Many people take TINA as unalterable truth.
Klein pointed out that there are always choices in public-policy decision-making, and now that it is clear that the Liberal tax cuts (personal tax cuts of $1.5 billion, and corporate cuts of $790 million) have been a dismal failure, the Liberals are turning to the Olympics as a last resort.
Tax cuts tend to favour high-income earners, as illustrated by the fact that 0.4% of people making over $200,000 received as much extra money from their tax cuts as did the half of the population making $30,000 or less.
"There will be a small economic boost with the Olympics," said Klein, "but the net cost to the taxpayer will be about $1.2 billion." Gordon Campbell and his Liberals seem to have become "Olympic Keynesians," touting the many jobs that they think will be created by their public-spending plan.
In other words, they admit that public spending can be a powerful way to stimulate the economy, but they are willing to use that method only with their favoured projects, not with public education or the healthcare system.
Klein spoke about the dangers of Public-Private Partnerships, or P3s. They are simply a way for governments to shift the initial cash outlay for building infrastructure projects (schools, hospitals, etc.) to private companies. While attractive in the short term for governments trying to appear fiscally responsible, the result is much more expensive, with the taxpayer footing the bill.
Private companies cannot borrow money as cheaply as governments can, and they need to build in a profit expectation. Governments will often guarantee a profit to the company involved and design the contract so that the public pays when anticipated earnings do not materialize.
Also, private companies try to achieve savings by firing people who are earning a decent wage and replacing them with people willing to work for drastically lower wages. Higher staff turnover and poorer service to the public result.
The largest cut that resulted from the government’s haste to reduce the size of government was in the Ministry of Human Resources. "Six-hundred million will be cut from this ministry." The NDP did cut welfare rates in the mid-1990s, but the Liberals’ plan for a two-year time limit may result in thousands of desperate people on the streets this coming spring.
What can teachers do about this government’s obvious desire to sell off our publicly owned assets and favour its wealthy backers? The first step is always to become aware and to have the facts.
The Canadian Centre for Policy Alternatives publishes a monthly newsletter called The Monitor, which has a great deal of useful information that you will not find in the mainstream media. Supporting the CCPA as a member entitles you to the newsletter and allows the organization to continue with its progressive research.
Visit the CCPA web site www.policyalternatives.ca.
Chris Bocking teaches at Keating Elementary School, Saanich.