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Linda McQuaig says
it's a myth that private sector saves public money
LINDA
MCQUAIG
Several years ago, a medical team at
McMaster University produced a study that seemed to definitively prove privatization is
bad for health care. After an extensive study of U.S. hospitals, the McMaster team
concluded that private, for-profit hospitals have significantly higher death rates.
One might think that would have encouraged policy-makers here to pause in their
rush toward privatization.
But no. Nothing seems able to derail the privatization train.
Its advocates, who are concentrated in the corporate sector, argue that
corporations can deliver government services cheaper and better than government.
There's never been any evidence to back this up. In fact, there's a lot of
evidence to contradict it, such as that McMaster study.
But lack of evidence has never been an obstacle. Corporate interests have used
the media (which they mostly own) and right-wing think-tanks (which they generously fund)
to spread their anti-government ideology.
They've also bankrolled political parties and succeeded in getting governments
—
including Dalton McGuinty's
—
to embrace privatization.
McGuinty actually campaigned against the "public-private
partnerships" or P3s, introduced by his Conservative predecessors, Mike Harris and
Ernie Eves. But, apparently succumbing to corporate pressure, McGuinty is now launching a
far-reaching privatization plan that goes beyond where Harris or Eves dared to go.
In last week's budget, McGuinty proposed using P3-type deals for the massive
$30 billion rebuilding of Ontario's infrastructure.
Among other things, this would mean handing over much of the management of
hospitals, schools and water systems to private companies. The government would own these
facilities, but private companies would run their non-professional operations and be
assured a guaranteed revenue stream.
Natalie Mehra of the Ontario Health Coalition argues that this amounts to
nothing less than a "private revolution."
Ironically, it's also a bureaucratic revolution, since the deals are enormously
detailed legal arrangements. When government lawyers forgot to specify that lights be
installed in operating rooms in a P3 hospital in Edinburgh, the hospital was built without
the lights, Mehra says.
She adds that the paperwork for the P3 hospital being built in Brampton stands
about six feet high.
The ostensible reason for our governments to get into these complicated
arrangements is that we need the private sector's money.
But we don't. The private sector must borrow the money
—
just as government would borrow the money. In fact, government can borrow the
money at significantly lower interest rates, reducing the overall cost of a long-term deal
by as much as 20 per cent.
So logic would demand government borrow the money itself. But the business
community has generated such hysteria over government debt that politicians prefer the
private sector do the borrowing, even though the public still pays for it and ultimately
pays more.
With corporate profit margins also added in, P3s end up costing a lot more. In
Britain, the Association of Chartered and Certified Accountants has been sharply critical
of the high costs of P3s.
None of this deters the McGuinty government, which has apparently taken over
the vanguard of Mike Harris' private revolution.
Linda McQuaig is a Toronto-based author and commentator. lmcquaig@sympatico.ca. |
