I was in Adelaide over the weekend and heard first hand of the concern among newsagents about the decision by the South Australian state government to privatise SA Lotteries.
Lottery products play an important role in newsagencies in South Australia. While I am no economic expert, I can see no reason for the state government to sell off the lucrative gambling licence other than to get a short term financial benefit.
Even if the government negotiates five years of protection for current retail outlets as part of a sale, as happened in NSW, this sets a clock ticking for newsagents. It impacts goodwill.
Before the government signs any contract, it needs to assess the economic impact on newsagents, their employees and the communities in which the serve of the possible decision. Such an assessment would need to carefully consider the impact of what may happen after the five years of protection has passed.
The impact on goodwill must be considered. While the state government may reap a windfall, what would this cost the families which own lottery outlets today? The impact on shopper traffic beyond the five years must also be considered. It is possible that this decision plays into the big supermarkets getting bigger.
South Australian newsagents have every right to be concerned.
Over the next few months we will get to see how much South Australian politicians, of all sides, really care about small businesses like newsagencies.
Just like NSW, it will be sold off regardless of what newsagents say, Govt both state and federal only see the short term $$$ never the long term loss of revenue. Wouldn’t it be nice if the CBA was still taxpayer owned with it’s multi billion profits, we would not need a flood levy or a carbon tax.
Maybe the SA government should consider attaching legislative protection for ‘small business’. It could, as was done in QLD, limit the type and size of outlets through legislation.
Governments shouldn’t actively control commercial business activities unless such activity is part of essential infrastructure and services.
Luke, banking is a highly competitive sector and it would be improper of the government to compete against private enterprise (much like the Aust Post situation in inappropriate). The flood levy would still be needed because previous government did not have the foresight to establish disaster funds, nor take out adequate insurance. The carbon tax/ETS is designed to be revenue neutral.
Jarryd the previous Govt pre Kevein07 had a $30 billion surplus that was p#%&ed away by the current government for a few school school halls that don’t work, pink batts that are unsafe and now a blank chq to ship off boat people to make themselves look good. Over the past 200 odd yrs the Govt as have most other countries, had no problem running business that compete with private enterprise but as labor seems to do time and time again, they waste too much then they sell off OUR assets to balance the books, if you believe the Govt is doing the right thing by selling off our future revenue then more fool you, vote labor again or even better vote green that went well last time.
Nice post Mark –
Most MP’s we have unfourtunately should not be in their current positions, however they through their hats in the ring and made it through.
It is a real shame that smart & articulate people do not pusue a run at representing contituents.
In my view their primary goal is to represent its contituents. Politics makes it nearly impossible to do this and I am unsure why.
I am sure someone can enlighten me.
I do hope South Australia’s Newsagents get moving on this with the full backing of the ANF. The fallout is a given if it does happen. Using our foresight it will be as you said will be families and small business’s.
NSW Labor sold small business out, one should study the predecent set and do exactly the opposite.
Luke,
Much of the surplus was injected back into the economy during the GFC to counteract the downward economic forces. Yes a number of the projects did not receive the best value for money. However one also has to consider the stimulus (that assisted mostly retail) and infrastructure projects like the NBN. Australia came out of the GFC relatively unscathed and the vast majority of economists agree that the government took the appropriate action (much of which was done of the recommendation of treasury). Its economics 101 – you save during economic prosperity and spend during downturns. Being in surplus does not automatically indicate good economic management. In fact, many economists are currently critical of the government for recently making too many spending cuts simply to get the budget back in surplus in 2013 (an arbitrary time frame with no economic reasoning).
All government sell off assets. To contrast your comments, the Howard government sold off Quantas (with which I agree) however they also sold off Sydney Airport and Telstra – both pieces of key infrastructure.
Our biggest concern here in SA with the potential sale of SA Lotteries is that it may fall into the hands of the duopoly Coles/Woolies.
Should this happen we would be competing against stores which are open from 6am – 9pm
M-F and 6am-5pm Saturday and 11-5 on Sunday so it would do enormous damage to newsagencies.
I have written to all the appropriate MP’s and Senators and told them of my concerns and if any other SA (or other) newsagents want to do the same they can either email me on jasscar@bigpond.com
or ring me on 0883797578 and I will give you all the addresses (email) that you will need. The more of us who take responsibility for this the better. You can’t just let one or two agents put in a submission – we need to flood them with emails so that they are assured that we are concerned.
Perhaps we should get the issue back on track and away from the Labor vs Lib poiltics.
It’d be terrible if Coles and Woolies got involved in Lotteries, in SA or anywhere else for that matter. They are already big players in gaming, via ownership of hundreds of poker machine licences in other states. Surely the SA government wouldn’t want to allow them to integrate into soft gaming as well. It’s a well known fact that Coles and Woolies only get involved in what they can dominate.
If the governments of Australia have any empathy for small business at all then they must control or restrict the hegemonous encroachment of the big corporates into very aspect of our lives.
At the end if the big corporates become too dominant then that will be a more insidious impost on our freedom than even a totalitarian regime.
Jarryd,
While the actual Telstra sell off was done by a Liberal government it was corporatised by a Labor government which was the first step to a planned sell off. (either was it was a debacle !)
The money spent during the GFC did little to actually support the economy long term. With the US possibly still to hit a double dip recession we may have missed the first wave but could very well still get caught in a secondary recession and the govt doesn’t have the funds to do what they did a second time. All alot of the money flooded hurridly into infrastructure did was provide us with infrastructure purchased at above what the real cost should have been.
Paul,
The money spent was not intended to have long term economic impact. Its goal was to buffer the short-med term impact of the GFC and ensure that any downturn didn’t spiral into a freefall. The money that was put in infrastructure also assisted in buffering the downturn. It injected money into those sectors and kept people in jobs. There is no doubt however that it could have, and should have, been managed better to achieve a higher ROI.
As for a double dip recession in the US, (or a crisis in Europe) it would be difficult for any country or politcial party to be in the situation they were the first time around. If they cut spending too far they risk a self-created economic downturn – especially in this two-speed economy.
You should get your State Govt to do what the Qld Govt did and enshrine in law that only small business can own and operate a lotto outlet
one would hope that the ANF (which is a branch in SA) are already talking to the QNF as to how they went about that. We are bombarding our MP’s but it isn’t our job – it is the job of the ANF. A good
result would be fantastic for newsagents.
I’m holding my breath