Presented by Robert Clark MP		www.robertclark.net

McCalman wrong on privatisation

30 September 1999

The Letters Editor
The Age
250 Spencer Street
MELBOURNE VIC 3001

Dear Editor

In her enthusiasm to kick the Government, Janet McCalman is letting her imagination depart from reality (Age 29/9).

Her argument is that Victoria in 1992 was like a family farm suffering from high debt due to drought and to imprudent borrowings (which she conveniently blames on "reckless bankers" rather than on the incompetence of the management of the farm by Labor).

McCalman says that the best paddocks were then sold to foreigners and the family now cannot make ends meet, thus proving that we shouldn’t have sold anything in the first place.

The facts of the matter are that what was sold to foreigners (and fellow Australians) were the parts of the "farm" that we couldn’t run particularly well ourselves in public ownership.

We obtained for the assets we sold prices way beyond the expectations of both sceptics and experts.

We have used the proceeds of these sales to clear the debt our Labor predecessors ran up and dramatically reduced our interest bill in the process.

Even after allowing for lost dividends from the businesses we sold, the Victorian budget is still more than $800 million better off as a result of lower interest costs.

It is that lower interest bill that is allowing the Coalition Government to spend 19% more in real terms on education, health, social security and welfare, and law and order, than Labor could afford in 1992.

As well, Victorian exports, manufacturing and job creation have all been dramatically revived.

If we had followed McCalman’s solution of not selling anything, we would have had to raise taxes to crushing levels to cover both the interest bill and the provision of services. Business would have been driven from the State and our unemployment rate would still be languishing 2 or 3 percentage points above the national average.

Readers can therefore judge for themselves which style of "farm management" has produced better results for Victoria.

Yours sincerely

Robert Clark MP
Parliamentary Secretary, Treasury and Multimedia