I must confess I am little disappointed that the University’s Centre for Labour Studies has chosen to publish a memorandum (some would argue a warning) about the effects of privatisation.
Not because this report is unwarranted, but because it has come so late in the day. It is truly a pity that the Centre has refrained for so long from commenting on the sale of so many public assets, and in the process failed to stir a national debate on the pros and cons of privatisation. With so many national treasures now in private hands, this memorandum is sadly a case of better late than never, at least for those corporations already sold off.
Local political parties have differing views on privatisation. Like all centre-right parties, the PN has always taken a very ideological view of privatisation, believing that it is intrinsically a good thing. Their belief in privatisation is quasi-religious, with Austin Gatt assuming the role of High Priest. They even had the gall to sell off the Public Lotto, allowing private enterprise to capitalise on what is, intrinsically, a vice.
The Labour Party has performed a number of U-turns on privatization: part of an ongoing political balancing act between the unions (who are generally wary of privatisation) and the handful of economic liberals within the party who look upon privatisation more favourably. The party’s indecision leaves many voters guessing. It is a position of opportunistic pragmatism they will probably carry into the election campaign. If they are elected to rule the country on their own, I guess they would behave much like the Nationalists and continue with the sale.
Many people ask me whether the Greens are for or against privatisation. I believe it is impossible to answer the question with a simple “yes” or “no”. For us, every privatisation exercise must be seen in its own context and merits (or demerits). Rather than a dogmatic position on privatisation, Alternattiva Demokratika holds a policy on privatisation based on five principles. The first principle we believe in is that before selling off public enterprises, government should consider whether it can improve efficiency by simply ceding day-to-day control to companies, individuals or organisations with proven expertise, without giving up ownership. It is no secret that private enterprise is better at managing business; however, in order to improve management it is not imperative that ownership is also given up. The two issues are separate.
The second principle is that government should only sell public corporations/assets if these were specifically mentioned in the party’s electoral manifesto. Government is the agent of the people. Without an electoral mandate, privatisation is therefore democratically illegitimate. For this reason, as well as the third principle below, we could not support the recent sale of Maltapost. 
The third principle is that we oppose the privatisation of all natural monopolies, like the airport (already sold off) and Enemalta, for strategic reasons. A natural monopoly exists because in a country the size of ours it is simply does not make economic or logistical sense to have more than one operator in certain markets. In such a case, when one operator is destined to dominate the market, we believe that government should not cede ownership, although we have no objection to the “privatization” of the management function.  This principle was broken in the sale of Malta International Airport, the result of which was that government needed approval from the private Austrian owner/operator to give the go-ahead to low cost airlines. Decisions of such strategic national importance should not be subject to the approval of the private sector. Had MIA plc said “no” to Ryanair & Co., then the only way to introduce low cost airlines would have been either to build another airport or the nationalise MIA. Fancy that?
The fourth principle upon which we have built our policy on privatisation is that the sale of public corporations should not take place when it is clear that it is only being done to raise revenue for government. We believe that this is never reason enough for privatisation. In fact, it was for this reason that we were not convinced by the sale of government’s remaining shares in Maltacom to Tecom; apart from the actual selling price that we argued was heavily discounted.
The fifth and final principle is that, when feasible, we look upon the sale of shares to the public more favourably than when all the shares are sold to one company. Government often uses the excuse that a “strategic” partner is needed; a buzz word that I have challenged on a number of occasions.
What was so strategic in having a Greek company buy the National Lottery company, apart from the fact that they have increased their business and profits at the expense of the vulnerable?
There aren’t that many more public corporations to sell off. However this or the next government may toy around with the privatisation of certain public services like healthcare. The Greens are strongly opposed to the wholesale privatisation of the welfare state. We will have no objection if government adopted management principles from the private sector to improve efficiency in the provision of social services. However we will oppose any proposal that attempts to shed the responsibility of government to act as the ultimate guarantor of social services. The proverbial buck stops here.
 
Edward P. Fenech is spokesperson for the economy and finance of Alternattiva Demokratika – The Green Party