Privatise Australia Post (2 Viewers)

[volition]

Privatisation is in the air again!
http://www.abc.net.au/news/newsitems/200706/s1941519.htm - Labor opposed to any privatisation of Aust Post
http://www.abc.net.au/news/newsitems/200706/s1941306.htm - CommSec 'keen to spark debate' on Aust Post sale

As usual, I'm for privatisation, anyone got any thoughts?

I personally do think that even though CommSec are in it for the money, it's probably still a good idea to do it, what with the $7 billion it could fetch the government, as well as having less unnecessary government control over stuff.

 

[sam04u]

I disagree with privatising Australia Post. Once it is privatised costs could go up, and with no alternative we could potentially be forced to pay extra for a potentially worse service. The priority of a business is to make profits, at the expense of the user. (With no alternatives to deliver physical mail, it's not a very good position to put ourselves in.)

 

[Sexy Ari]

This reminds me of an intro to law scenario. In the end the workers protest in a rally as part of the group "Australian's for Good Postal Service".

A short time after the rally starts, some participants of the rally start throwing letter boxes at the post office windows. All the post office’s windows are smashed.

Following the rally, Roger, an eligible police officer with appropriate authorisation, applies for and receives a covert search warrant from an eligible judge. The warrant specifically authorises the seizure and substitution of “planning and membership documents”.

Roger impersonates a meter reader checking gas metersin order to get inside Scottie’s house and finds several documents titled “planning the rally”, which he copies. He also sees a pile of letterboxes, which he seizes and substitutes with replica letterboxes.


Assuming knowledge of Roger’s actions, advise Scottie on whether Roger’s actions were in accordance with the Terrorism (Police Powers) Act 2002 (NSW), specifically:
· Has a terrorist act been committed?
· Were Roger’s actions authorised by the warrant?

 

[volition]

I disagree, once privatised costs could go up (With no alternative we would be forced to pay extra, for potentially worse service.)

I doubt it'd stay a monopoly for long, some other company could just come in if it was going to abuse its monopoly power(which was only given to it by the government in the first place).

We already have private courier firms, I don't see how private mail couldn't also work in a similar fashion.

 

[jb_nc]

honestly privatising Australia post is a fucking stupid idea

 

[volition]

honestly privatising Australia post is a fucking stupid idea

Would you care to elaborate on that?

 

[Sexy Ari]

I doubt it'd stay a monopoly for long, some other company could just come in if it was going to abuse its monopoly power(which was only given to it by the government in the first place).

We already have private courier firms, I don't see how private mail couldn't also work in a similar fashion.

It would stay a monopoly. Private couriers are on a much smaller scale than Australia Post. Do you think a company would really be prepared to come into competition, buy area rights from whoever gets Australia post, hire thousands of employees to collect the mail from all around australia, sort it and ditribute it to the area they own. It makes sense having one unified organisation.
So much money and time would be wasted allocating the mail to whoever.

 

[jb_nc]

is it even profitable

 

[volition]

It would stay a monopoly. Private couriers are on a much smaller scale than Australia Post. Do you think a company would really be prepared to come into competition, buy area rights from whoever gets Australia post, hire thousands of employees to collect the mail from all around australia, sort it and ditribute it to the area they own. It makes sense having one unified organisation.
So much money and time would be wasted allocating the mail to whoever.

Businesses will go very far to make money, if they can outlay billions of dollars to set up international air travel or automobile manufacture, then I think that something on the scale of a post system is clearly doable (let's not forget there are already couriers who do things that auspost does like deliver parcels).

is it even profitable

I don't see any good reason why it wouldn't be able to turn a profit just like any other business. Let's say it could be made profitable, would you support it then? Or do you have any other objections to privatisation?

 

[jb_nc]

yes i would because im a socalist

 

[banco55]

You would float it on the basis that:

a)it would have a guaranteed monopoly for the next 20 years
b)it would have the universal service obligation for the next 20 years
c)any increase in stamps etc. would have to be approved by a regulator

 

[Sexy Ari]

Businesses will go very far to make money, if they can outlay billions of dollars to set up international air travel or automobile manufacture, then I think that something on the scale of a post system is clearly doable (let's not forget there are already couriers who do things that auspost does like deliver parcels).

Delivering parcels by arrangement is not comparable to the delivering of mail. Those companies set up overseas manufacturing plants because there is a guaranteed market and way to make profit. And in doing this they efficiently use resources. For a private company to go in competition and invest so much money into an inefficient area which their introduction will only make it more complicated/inefficient is just stupid. How are they guaranteed a profit? Charge $5 a letter like private courier companies do, lay off most workers, and increase standard delivery times?
And anyway, postage services are greatly declining in use per person. I'm sure companies tend to invest billions of dollars into a growing market not a service becoming relatively redundant due to technological advances.

 

[volition]

a)it would have a guaranteed monopoly for the next 20 years

Probably not a good thing for competition's sake and competition is desirable here.

b)it would have the universal service obligation for the next 20 years

This would make it harder to sell (any businessman is less inclined to buy into a project if he knows he could be stuck with it for 20 years), which means it's less likely to be bought into. Part of the argument for privatisation rests with the concept that you can increase/decrease your holdings in a business depending on it's good/bad performance, it's an efficient markets thing.

Point is, any kind of government imposed obligation is likely to distort that and I think it'd be unnecessary anyway. A business will step in if there's demand where no current service is available and it's easy enough to provide it (like I said, if Toyota can spend billions and billions on making cars, I'm sure someone will spend the money to make a postal service), we don't need a govt guarantee of things.

It's like saying we need the government to guarantee we need Woolworths to stay in business so we can all buy food. There isn't a guarantee now and things are fine aren't they? The argument for a govt guarantee in an area like postal services is pretty weak imo.

c)any increase in stamps etc. would have to be approved by a regulator

This could stifle it's ability to compete free of government hands and political influence.

And anyway, postage services are greatly declining in use per person. I'm sure companies tend to invest billions of dollars into a growing market not a service becoming relatively redundant due to technological advances.

If it were really true that postage services were greatly declining to the extent that they aren't needed anymore, then why must they still be provided in the first place? I think you know the answer here, they're still needed by people and as long as they are still demanded by people there will be enough incentive for a firm to jump into the market.

Those companies set up overseas manufacturing plants because there is a guaranteed market and way to make profit.

I don't think it's true that there has to be a guaranteed market before a company will jump in, heaps of business ventures are at least somewhat speculative in nature.

Anyway, let the entrepreneurs sort it out, your argument could equally be used for having a govt mandated service in almost any other industry, and yet there are plenty of industries that work fine without the government. eg. Do you think that furniture makers are ever 100% certain that their furniture will be sold? Let's have a government furniture making service "because we aren't sure whether a private furniture company would be profitable".

 

[Sexy Ari]

If it were really true that postage services were greatly declining to the extent that they aren't needed anymore, then why must they still be provided in the first place? I think you know the answer here, they're still needed by people and as long as they are still demanded by people there will be enough incentive for a firm to jump into the market.

Nobody made such claims that they were no longer needed. However, it is a fact that they are in decline.

I don't think it's true that there has to be a guaranteed market before a company will jump in, heaps of business ventures are at least somewhat speculative in nature.

Some ventures are somewhat speculative but based on data where they show there is a high possiblility of consumer demand to justify the investment into the market. For a company to take such a high risk, the common business law is that the return has to be extremely high and personally I don't think that companies would take such a step.

But its great to see how you took the issue away from Australia Post privatisation to changing the postal service into an oligopoly

 

[banco55]

Probably not a good thing for competition's sake and competition is desirable here.

This would make it harder to sell (any businessman is less inclined to buy into a project if he knows he could be stuck with it for 20 years), which means it's less likely to be bought into. Part of the argument for privatisation rests with the concept that you can increase/decrease your holdings in a business depending on it's good/bad performance, it's an efficient markets thing.

Point is, any kind of government imposed obligation is likely to distort that and I think it'd be unnecessary anyway. A business will step in if there's demand where no current service is available and it's easy enough to provide it (like I said, if Toyota can spend billions and billions on making cars, I'm sure someone will spend the money to make a postal service), we don't need a govt guarantee of things.

It's like saying we need the government to guarantee we need Woolworths to stay in business so we can all buy food. There isn't a guarantee now and things are fine aren't they? The argument for a govt guarantee in an area like postal services is pretty weak imo.

This could stifle it's ability to compete free of government hands and political influence.

If it were really true that postage services were greatly declining to the extent that they aren't needed anymore, then why must they still be provided in the first place? I think you know the answer here, they're still needed by people and as long as they are still demanded by people there will be enough incentive for a firm to jump into the market.

I don't think it's true that there has to be a guaranteed market before a company will jump in, heaps of business ventures are at least somewhat speculative in nature.

Anyway, let the entrepreneurs sort it out, your argument could equally be used for having a govt mandated service in almost any other industry, and yet there are plenty of industries that work fine without the government. eg. Do you think that furniture makers are ever 100% certain that their furniture will be sold? Let's have a government furniture making service "because we aren't sure whether a private furniture company would be profitable".

The universal service obligation would be factored into the share price. Do you really think it's profitable to deliver letters/parcels to the more rural parts of australia without large (in some cases very large) price increases? It's like Telstra and the bush.

 

[volition]

Nobody made such claims that they were no longer needed. However, it is a fact that they are in decline.

I accept that they are in decline, but with regard to whether they are needed or not, I said "to the extent that they aren't needed anymore". Your comment about them not being needed is only really making an argument if they aren't needed anymore, so I was addressing that in case that was the point you were trying to make. If that wasn't the argument you were making then that's fine just forget about that then.

Some ventures are somewhat speculative but based on data where they show there is a high possiblility of consumer demand to justify the investment into the market. For a company to take such a high risk, the common business law is that the return has to be extremely high and personally I don't think that companies would take such a step.

Yeah, but they'd do it if there was enough demand, and if there wasn't enough demand, then it's not necessary. It works either way.

You can't really have it both ways here. If there's one company who are abusing their market share and charging way more than it costs them, then clearly it will pay for another company to step in. If the one company is charging a lower price that people are happy to pay, then it won't pay for another company to step in, but it won't be necessary anyway!

But its great to see how you took the issue away from Australia Post privatisation to changing the postal service into an oligopoly

That was raised to address the monopoly concerns raised by sam04u.

The universal service obligation would be factored into the share price. Do you really think it's profitable to deliver letters/parcels to the more rural parts of australia without large (in some cases very large) price increases? It's like Telstra and the bush.

Ok, well if it does so happen that price increases result, would you really object to this? It'd only happen because it costs them more to do it! If the mail carrier has to travel further, then the person sending mail from a rural area is obviously getting a different service to a person sending from a city area to another city area. I don't think this is something that needs to be subsidised by the government for the reason that it costing you more doesn't mean you should get it at an increased cost to everyone else who doesn't live in a rural area.

It's like objecting to hairdressers charging more for female hair cuts or car insurance companies charging more for male <25s. It's only because it costs them more, and it's only fair that other people shouldn't have to pay extra to cover the cost of the females and male under 25s.

 

[banco55]

Ok, well if it does so happen that price increases result, would you really object to this? It'd only happen because it costs them more to do it! If the mail carrier has to travel further, then the person sending mail from a rural area is obviously getting a different service to a person sending from a city area to another city area. I don't think this is something that needs to be subsidised by the government for the reason that it costing you more doesn't mean you should get it at an increased cost to everyone else who doesn't live in a rural area.

It's like objecting to hairdressers charging more for female hair cuts or car insurance companies charging more for male <25s. It's only because it costs them more, and it's only fair that other people shouldn't have to pay extra to cover the cost of the females and male under 25s.

The problem with this (as with other bright spark libertarian ideas) is that it would be political suicide for whichever party let it happen.

 

[volition]

The problem with this (as with other bright spark libertarian ideas) is that it would be political suicide for whichever party let it happen.

I think you're right, it would be political suicide and it probably won't happen. But I still think it at least makes sense that it should happen, even if the public don't think so.

If it does happen, it'd be the liberal government doing it after the election I guess. Still a longshot though, given the coalitions chances of winning fed election.

 

[_dhj_]

I think you're right, it would be political suicide and it probably won't happen. But I still think it at least makes sense that it should happen, even if the public don't think so.

Here lies the fundamental problem of libertarianism. If you advocate freedom in decision-making, or value the agency of individuals, you ought to acknowledge that the collective of individuals have spoken - they want essential services in the hands of the government, not of corporations acting in self interests.

 

[volition]

Here lies the fundamental problem of libertarianism. If you advocate freedom in decision-making, or value the agency of individuals, you ought to acknowledge that the collective of individuals have spoken - they want essential services in the hands of the government, not of corporations acting in self interests.

It's your thinking that that actually justifies doing things that people didn't want done, not mine. But no, "the tribe has spoken".

Oh yeah and it's worth throwing in here that we don't have much of a true choice. Any political party voted in can simply not follow through with it's promises, and it's also kinda dumb how one vote is supposed to 'set down' what you want in so many different things. With a market system you decide what you want to support (with your consumption) and the exact extent to which you want to support it. The market doesn't work for everything, but I think there's no good reason it wouldn't work with postal services. Maybe you wanna give me a reason why you think it wouldn't work?