The first is to have a monopoly, preferably a regulated one, such as a public asset that has been privatised.
Sydney’s Kingsford Smith airport was flogged off by the government to a private operator who makes obscene profits, not just from the landing rights, but parking, retail concessions, and every other opportunity to gouge. What are your options… catch a train to Singapore?
The second is to be in a market where the person shelling out the money for your product is not the decision maker in the purchase.
My dog does not care how much the food I deliver to her/him costs, the marketer is selling the stuff to me on the basis that my dog will prefer it, and it is better for them, and I am a bad person if I deprive my beloved pet of the best care possible.
The Australian publicly funded pharmaceutical benefits scheme is similar.
Once on the list, the pharma companies sell to the doctors, persuade them to prescribe their magic to their patients, who pay a consistent subsidised cost whatever the price of the drug to the public purse. Perhaps inconsistently, I am in favor of this scheme, despite the obvious rorting that goes on.
I am always caught between amazed laughter and despair when I hear a politician whining about the prices of some commodity, the ownership of which they have flogged off to private enterprise, who then proceeds to make a profit, because they can.
Just look at what has happened to power prices since the privatisation of the poles and wires, done in a strategic vacuum for short term political gain.
No matter the words used, what they have done is subsidise private profit from the public purse.
One that should get a mention but does not despite the disruption over the last couple of years is the takeover of Healthscope, the operator of the new French’s Forest hospital in Sydney’s north, by Canadian group, Brookfield in June 2019. Brookfield held a featured place in the Panama and Paradise papers as protagonists in tax avoidance via trusts located in tax havens.
The state government poured 2 billion dollars into the hospital in a so called partnership with Healthscope previously an ASX listed company, and closed the alternatives in the area, Mona Vale and Manly hospitals.
So much for the competition, and for the tax on the resulting profits.
