Like most neoliberal nonsense, it's not just a lie, it's a misdirection. What it really means is "Government money is being spent on providing a service for poor people, when it should be handed out to rich people."
It's driven by entitlement, not generosity.
You can see this very clearly in the way privatised CEOs are paid. The water companies quite obviously and literally prioritise CEO pay rises and dividends over service quality.
That's not an accident. It's the true meaning of privatisation.
That is what privatisation is.
The "customer" in privatised industries isn't the public, it's upper management and other big shareholders.