public ownership saves money, protects workers and delivers better serviceS
Today we're officially announcing the launch of Public Futures Aotearoa with the release of our first report “How public ownership saves money, protects workers and delivers better services”. It draws on four decades of New Zealand history as well as international evidence showing the costs and risks involved when governments let the private sector own, operate or deliver public services.
Privatisation policies have continued under this government, and a number of political parties have already indicated that privatisation will be part of their election campaigns. Kiwibank is being lined up for partial privatisation, Kāinga Ora is selling state housing stock and land. Elective surgeries are being outsourced to private hospitals. Our independent meat inspectors could be replaced with company employees. As election season draws closer, it’s important that the public has the tools to understand how these kinds of policies will play out.
This discussion can’t be separated from the Aotearoa New Zealand context, in which public ownership was often underpinned by the confiscation and dispossession of whenua and rawa. Privatisation disregarded the Crown’s obligations and many of its harms have fallen disproportionately on Māori workers and communities. The report sets out five public ownership principles to honour Te Tiriti and ensure Māori can exercise tino rangatiratanga over their rōhe.
Public ownership saves money.
Since partially privatising the electricity gentailers in 2013, successive governments have watched them pay out $13.7 billion in dividends while investing less than half that in new generation. Surging wholesale power prices have led to widespread deindustrialisation and job losses, while household energy hardship has reached records levels. Banking tells the same story: the Big Four banks built their dominance by buying up New Zealand's public and community banks in the 1980s and 90s, and together they now earn almost $10 billion a year in profits, with the vast majority sent to their offshore parent companies. The private sector also borrows at higher rates, meaning it costs more to build, expand and operate private infrastructure and services.
Public ownership protects workers.
Funding private sector profits pulls resources away from wages, conditions and safety. Forestry privatisation created a contracting chain that killed 51 workers between 2013 and 2023, overwhelmingly Māori. Under private ownership rail workers died at eight times the national average. Competitive contracting squeezed bus driver wages from more than 60% above the minimum wage in 1990 to just 10% above in 2019, with councils required to choose low-cost tenders. The corporatisation and privatisation of Telecom saw direct employment drop from 16,000 to 6,000, and competitive tendering in the funded sector has kept wages and conditions low.
Public ownership delivers better services.
Publicly owned and delivered services are staffed according to need and not profit, with businesses usually cutting labour costs first. In health sector, for example, these cuts means increased patient numbers and greater risk of conditions going untreated. Maintenance is often deferred, with “abysmal” levels of network maintenance in the railway network subsidising investor returns. Accountability declines, with the public only learning about “fight clubs” in Mt Eden prison through video leaked to social media.
Rebuilding public ownership doesn’t mean turning back the clock on history. The report concludes by setting out five principles for what public ownership should look like in Aotearoa New Zealand in the twenty-first century: honouring Te Tiriti o Waitangi, built with genuine public participation, held to high environmental standards, radically transparent, and aiming for real excellence in delivery.
Read the full report here as well as case studies on the impact of privatisation on banking, electricity and rail, and help us make the case for public ownership in Aotearoa in the twenty first century before the next round of sell-offs goes through.
