Public Infrastructure


The question of public ownership of public infrastructure is a major underlying sub issue which continues to give grief in many areas.

Macquarie Bank No1 Martin Place, Sydney
Image via Wikipedia

The sale of Power Generation has been a major undoing of some premiers. On the one hand it is a shallow cash grab, in that it provides immediate short term cash to balance a government budget in the short term. It also seems a little cynical in that most power in NSW is generated in inefficient, environmentally unsatisfactory, aged plants that are in major need of repair, and in private hands the Government could then afford to be a lot greener. So given the circumstances, who would buy such a plant. Macquarie Bank comes to mind, and you can guarantee they won’t be planning on running it at a loss. The Unions cry “You Will Pay More!” is true. In public or private hands we will pay more for power.

The old economics that recognised public utilities as things that where best managed in public hands because they needed to be provided fairly for all citizens seems to have merit, and certainly fits with the general position of any party with an eye to social justice. Those things include water, sanitation, power, transport, education, health, defence, communications.

Wallerawang Power Station, New South Wales, Au...
Image via Wikipedia

As a result of the incredible inefficiencies  perceived in government run institutions there is a widely held belief that private enterprise could do this better. This may, or may not be true, however it does not answer the question at the philosophical level about who should own and operate such provision of services.

If power provision is private then the desperate and the poor run a much greater risk of being excluded from access to an essential ingredient of modern life. An so we take one small step back from being civilised every time we allow this.

Sydney Roads is another area where we see such great progress, by privatising roads, we now find that the average speed on the M5 is 28 Kph in a 24 hour period – so we presume that the peak has done nothing. The problem here I believe is that when the road is private the decision has to be made on the Return on Investment, rather than the long term needs of the community. I believe it is clear that this has not worked at all well and it is time that we found a better way. We can not assume that the public interest and the return on investment criteria will produce the same result, and many would suspect that you can in fact guarantee that they will not.

The conservative parties have traditionally been the parties supporting a free economy and private enterprise, however one suspects that they are stepping back from the extremes of this, (Telstra was an example where all Australians we given the opportunity to buy a piece of something that all Australians owned – and many of us conclude we have to live with what was done, but may not have been n the public interest).  The cash strap ALP run State Governments have seen Privatisation as an easy way out of measuring up to the responsibilities of Government Provision of Crucial Services.

Of course if we privatised legislature we may find the whole thing a lot more efficient.

Foreign Ownership lurks behind privatisation as a big nasty, because what does it mean if our power is generated by the Chinese, our water provide by the Russians, health in the hands of the Americans, and our Public Transport own by the Sub Continent.

Anyway you look at it Privatisation of Public Infrastructure is the equivalent of selling the Farm not the Produce.

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