The head of the competition regulator and a former advocate of privatisation has called for the privatisation of public monopolies to stop because the government is mishandling them.

Rod Sims, the Australian Competition and Consumer Commission chairman, says he has become so exasperated by the way in which governments are privatising public assets that they need an “uppercut”.

He says governments have repeatedly botched the sale of airports, electricity infrastructure and major ports – making things worse for consumers – because, when selling the assets, they have been motivated by maximising profits rather than making efficiency gains.

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He says governments have created private monopolies without sufficient regulation to stop those monopolies overcharging users – and the public knows it and has a right to be angry.

“I’ve been a very strong advocate of privatisation for probably 30 years,” Sims said at the Melbourne Economic Forum on Tuesday. “I believe it enhances economic efficiency [but] I’m now almost at the point of opposing privatisation because it’s been done to boost proceeds, it’s been done to boost asset sales, and I think it’s severely damaging our economy.”

He told ABC radio on Wednesday that there were numerous examples of state governments behaving poorly when trying to sell public assets.

“The classic one was when the Victorian government wanted to sell the port of Melbourne they suggested putting up the land rents for the stevedore operators by 800%,” he said. “I can go back 20 years and talk about Sydney airport, where the government increased the landing charges by 100% before the sale.

“Most recently we had the port of Newcastle, just bought the assets, revalued them, that is to say they felt they didn’t pay enough ... and then to justify the revaluation, without any consultation, they put up the fees to use the port, by the users, by I think around 40%.”

When he was speaking to the audience in the Melbourne Economic Forum, he said at one stage “let’s just stop the privatisations”.

“It is increasing prices – let’s call it out,” he said.

But, on Wednesday, he told Guardian Australia that he was trying to send a message to political leaders that they need to think carefully before they privatise any more public assets because they haven’t been doing so in the public’s interest.

“We’re talking about privatising monopolies, it’s not an issue otherwise,” Sims said. “But I want them to stop and think about the fact that when they’re privatising these things without effective regulation you are going to have increases in prices, and just think about the effects of that on the economy.

“Stop and think. And don’t be surprised that your electorates think that privatisations increase prices. Of course they shouldn’t [increase prices] but the history tells you differently.

“If we want support for privatisation then we’ve got to do them in ways that deliver what’s expected to be delivered, which is lower prices for consumers, not higher.”



Last month the ACCC chairman criticised the argument from governments that price monitoring of unregulated monopolies was effective. He said that type of “regulation” was “essentially useless” because a monopolist can raise their prices without any consultation.

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On Wednesday he said the state and commonwealth governments deregulated the monopoly power poles and wires businesses in 2006 and 2007 and he later warned that it would lead to excessive prices.

He said consumers had benefited from the privatisation of Qantas, CSL and Commonwealth Bank but they had been let down by other privatisations.

“My point is not that the theory of [privatisation] is wrong, it’s that we’re implementing them badly and you can’t try to shout down the critics of reform when implementation is going so badly.”

John Daley, the director of the Grattan Institute, said Sims’ criticism was “a real call” for everyone to start paying more attention to the terms and conditions of privatisations.

“So they’re not just an excuse to give away very substantial monopoly rights. which have a huge cost on the public in the long run,” he said.