The newly appointed head of Infrastructure NSW, former Liberal NSW premier Nick Greiner, laid out his agenda in a speech to the Australia Israel Chamber of Commerce on September 15.
The Sydney Morning Herald said Greiner’s advice to the NSW Liberal government was to privatise more and increase the use of public-private partnerships (PPPs). These are exactly the same tools that have failed for past state governments.
The Barry O’Farrell state government recently promised to privatise Port Botany on a 100-year lease, the Sydney desalination plant (also on a 100-year lease) and Sydney Ferries.
Greiner said the state’s electricity assets should also be fully privatised. As premier in 1991, Greiner privatised the state government insurance office (GIO), the state bank and cut thousands of public sector jobs.
Greiner also said the state should invest in more PPPs. Conveniently, he did not mention the appalling history of failure of such joint ventures in NSW, including the Sydney Airport Rail Link and the Cross City Tunnel.
The Airport Rail Link was initiated in 1991 by Greiner’s successor, John Faye, as a partnership between the NSW government (which built the tunnels and provided the trains) and a private consortium. Faye promised the line would be built at no cost to taxpayers.
Price gouging combined with unrealistic expectations of passenger numbers (owing to the astoundingly high fares) led to the collapse of the private operator only six months after opening in November 2000.
The state government was forced to take responsibility for the line, and to pay compensation to the private operator.
By 2006, when receivers finally managed to sell the airport link to private interests, the line had cost Liberal and Labor state governments more than $800 million. Travel on the line remains prohibitively expensive for many to this day.
The Sydney Cross City Tunnel operators faced a similar fate — going belly-up in 2006.
The operator of the Lane Cove Tunnel in Sydney went into receivership in January last year. The private operator of the Sydney Harbour Tunnel avoids collapse only because of the state government makes large payments independent of the amount of traffic that uses the tunnel.
As far as PPPs go, the evidence is in. As an alternative to publicly provided services, they are an expensive failure.
But they do succeed in funnelling taxpayer funds to big business, either via direct subsidies or through sweetheart deals that give privileged access to certain markets.
The other advantage of PPPs is their union-busting agenda; not lost on Greiner.
The SMH reported that he said: “We think running the railways, the existing railways, very much better than the way they have been previously run is actually where you can get quite a deal of bang for your buck.”
You don’t have to be a stockbroker to realise Greiner is talking about smashing the Rail Tram and Bus Union, lowering wages and eroding conditions, to give government more “bang” for its money.
For workers, Greiner’s agenda is more work and less pay. For commuters it would mean fewer staff, longer queues and less safety.
Like former premier Greiner, privatisation and PPPs have had their day.
Modern cities in Europe, Asia and North America are finding the money to develop public infrastructure — but not by selling the collective silverware.
Rather, they are taxing businesses, who are the biggest beneficiaries of a decent public transport system able to get their workers to work on time.
Or, they are taking a cut of the mega-profits that developers receive when a new train line is developed near their property.
Privatisation and PPPs are old thinking. Let’s consign them to the junkyard along with the political parties that support them.