Thursday, November 15, 2012

New column day

Here, following up on this post as to the public returns Saskatchewan stands to lose if Brad Wall insists on giving away liquor profits to private operators rather than working within the proven SLGA retail model.

A few footnotes to the columns...
- The previous post applied SLGA's estimates rather than its actual data in estimating the percentage of sales that go to the wholesale cost of SLGA products. But the actual values for 2011 ($282,428,000/$571,844,000 * 100%) produce exactly the same 49.4% number.
- More importantly, the capital costs referred to as an up-front investment in my earlier post are actually included in existing store expenses - meaning that it's not clear that the cost of building or renting new facilities would actually represent any increase whatsoever in the relative capital cost of operating SLGA stores.
- Finally, the normal net profits for retail sales are drawn from here.

As for what Brad Wall in fact intends to accomplish by privatizing public services, we can draw a strong hint from the concurrent debate over the Information Services Corporation:
McMorris said that although a privatized ISC wouldn't pay profits directly back to the government, it could be a "success story for Saskatchewan."
Never mind that any such story will be utter fiction to the extent it pretends that commercial success arising out of public enterprises reflects the corporate owners who take the resulting profits rather than the civil servants who built successful operations in the first place.

Instead, the more important concern is that the Sask Party wants to separate financial success from any associated "story" - and hand the former over to the corporate sector while leaving the rest of Saskatchewan to tell tall tales as consolation.

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