Why on earth wouldn't Labor support privatisation?

While not necessarily a direct result of their sale, the new shareholders of Telecom Australia and Qantas have not been able to stop the cost of telecommunications and airfares declining.

Looked at from the other side, government ownership has not been effective in containing price rises.

Comparing Victoria's privatised electricity network to Queensland's government-owned one, in real terms network costs have increased 140 per cent in Queensland, but only 18 per cent in Victoria since the mid-1990s.

The dividend flow from government-owned assets generally fails to make established hurdle rates.

The $37 billion in assets that the Queensland government intends to privatise is currently earning approximately $1.1 billion for a return of only 3 per cent. Term deposits pay 4% or thereabouts, and funds managed by Queensland industry super fund Sunsuper earned 13.1% last year.

Clearly there is a huge negative opportunity cost for tax payers in holding these particular assets.

In the case of the Queensland and NSW proposals, part of the sale of the assets will be invested in infrastructure. This should be beneficial from a labour market point of view in the short term, taking up some of the slack in construction left by the maturation of the mining boom.

In the long term, assuming the rate of return from the new investments is higher than that from the existing government-owned ones, an increase in living standards and employment should follow.

At the same time a decrease in the real cost of electricity and other services will create new business opportunities and enhance the profitability of existing businesses.

There is also evidence that government-owned regulators, such as the Australian Energy Regulator, lean more heavily on private providers than government ones, further guaranteeing a drop in real prices.

From the governing party's point of view the sale of publicly-owned assets reduces government debt and overheads, and while some capital spending is generally part of the package, a permanent reduction in costs is a core aim.

Labor governments pride themselves in being "reformist", which, apart from the historical exception of the Hawke governments, seems to mean inventing more programs rather than reinventing and refining existing systems.