29 Jan 2013

Floods Of Fiscal Nonsense

By Ben Eltham
As communities recover from a weekend of floods and fires, politicians are arguing about balancing the budget. None of them will admit we need to raise taxes to pay for things like disaster relief, writes Ben Eltham
As the rain beats down on Queensland, Australia's politicians are again struggling with the basic arithmetic of government.

Natural disasters are expensive. By definition, they require a collective response. As we observed after the floods of 2011, natural disaster responses are by their nature a public good. No individual, no matter how wealthy or well-insured, can adequately prepare for a category 5 cyclone or a devastating bushfire. To prepare, respond and rebuild from such catastrophes takes the pooled resources of the entire community.

To do all this requires money. Lots of money. In 2011, Julia Gillard's government decided to raise extra funds for flood reconstruction with a special flood levy, which helped to offset the estimated $5.6 billion cost of that year's floods and cyclones. At the time, both Tony Abbott and Campbell Newman opposed the levy, arguing that the government should fund reconstruction efforts by cutting government spending in other areas.

Now that he is premier of a state again ravaged by floods and cyclones, Newman has changed his tune. Over the weekend he was telling reporters that Queensland would need a lot of help from Canberra to rebuild.

The damage that Tropical Cyclone Oswald has wreaked on Queensland and New South Wales doesn't seem to have effected any change in the increasingly illogical national debate on government taxing and spending. Somehow, the reconstruction has to be paid for. But such is the tax-aversion of many politicians, no-one is prepared to say where the money should be found.

Australians are a naturally parsimonious bunch. Very few of us like higher taxes. But we do like government services, such as swift-water rescue teams and emergency coordination centres. And that's an increasingly dangerous fault-line for the Australian polity.

As far as the surplus goes, Labor has at least abandoned its pledge to keep the federal budget in the black no matter what. The Government has hardly loosened the purse strings — indeed, whatever the Opposition says, it's been one of the most restrained governments in modern history. But it has finally acknowledged the reality of Australia's highly cyclical tax system, which has become increasingly tied to the ups and down of commodity prices.

Sensible tax reform would address this boom and bust tendency in federal revenues, but as the mining and carbon tax debates have shown, sensible discussions about tax reform are rare.

In contrast with the government, since losing office, the Opposition has seldom bothered with the niceties of arithmetic. In general, it has liked to promise lower taxes and a budget surplus, in its own uniquely antipodean version of voodoo economics. Given how little attention anyone paid to the gaping holes in their 2010 election costings, the political calculation appears to be that voters simply don't worry about whether the promises can be paid for.

The Coalition's latest policy pamphlet continues the tactic. Entitled "Our Plan: Real Solutions for all Australians", the mini-election platform has been released as part of what Tony Abbott has been calling a "mini-campaign" to kick off the election year.

"Our Plan" is dominated by deficit hawkishness. It makes much of Labor's supposedly poor economic management. It constantly invokes the supposedly vast government debt that Labor has racked up in office. An Abbott government, the pamphlet proclaims, will be able to both cut taxes and deliver a surplus. It will do this by "cutting waste". Despite this pledge, the pamphlet also promises to build more infrastructure.

As Rob Burgess points out today, it's magic pudding stuff. "[This] is yet more conformation that the Coalition's cost cutting plans will be so aggressive as to be very difficult to sell at election time," he writes.

The melancholy truth is that voters like to have it both ways on the size of government. Public service cuts can be quite popular in the abstract, as Campbell Newman's successful campaign in Queensland against Anna Bligh's deficit-spending government demonstrated. It's only when the pink slips start to arrive and the schools and hospital wards start to close that voters take stock of their real views about government services.

Everyone hates a public service "fat-cat". But when nurses and teachers start to get laid off in big numbers, public perceptions can change, as we've already seen in Queensland.

The dominant policy narrative of this year's election campaign looks like it will be the age-old question of "how are you going to pay for it?" For the Coalition, the challenge is a serious one. Joe Hockey has already pledged that he will deliver a surplus in every year of a future Abbott government.

To do that while cutting taxes will mean very deep spending cuts indeed. Such cuts will have to come not just from the sorts of programs that conservatives hate, like climate change programs and government benefits, but also from areas where conservatives generally like to spend up, such as defence and border protection. As Fairfax's Peter Hartcher rightly observes today, the cuts made to the Australian Defence Force since 2010 mean that the big arms purchases envisaged by he 2009 Defence White Paper are now off the table.

What's likely to happen, therefore, is more obfuscation, because many voters don't really want to hear the hard truth. Under Labor, the budget will only slowly climb back into the black, because tax revenues are still anaemic and Labor wants to spend up on new social programs like the National Disability Insurance Scheme. Taxes will rise, but Australia will maintain a small government by world standards.

Under the Coalition, more or less the same thing will occur. Government services will be slashed, and some taxes will be abolished or reduced. But the overall size of government is not likely to be much smaller than under Labor, for the simple reason that there isn't much waste and inefficiency left to slash. As Campbell Newman is discovering, voters like public hospitals and schools. And if tax revenues do recover, the later years of the Howard government show that conservative politicians are just as capable of splurging on pet projects if they get the chance. This is one reason why the current federal budget is smaller as a share of the economy than it was under John Howard.

In a nutshell, the Coalition's budget plans are not credible. Labor's are, in the sense that it has finally admitted it can't balance the budget. But both parties are being dishonest, in that the arguments they make about low taxes are likely to be eclipsed by fiscal necessity.

The big-picture trends are all running against those who wish for smaller public sector and lower taxes. Australia has an ageing population and an economy that will require big investments in infrastructure and education if we want to keep enjoying our astonishing two-decade run of economic growth. The best way to increase Australia's supposedly-lagging productivity levels, for instance, would be to invest in the human capital of our workforce through education, training and research.

To do all this takes money, money which has to come from either taxpayers or borrowing. Given that both parties want to pay back Australia's tiny levels of public debt, more spending really requires tax reform, ideally the introduction of new broad-based taxes like a national land tax. The sooner we can have a rational discussion about this, the sooner we can get on with the job of investing in Australia's future, whether it be preparing for natural disasters, investing in schools and hospitals, or purchasing Joint Strike Fighters. But the fate of the Henry Tax Review does not augur well.

Compared to the budget woes in much of the rest of the rich world, Australia's money problems are small and easily solved. We just have to pay slightly higher taxes. This is the bald truth that neither major party is prepared to tell us.

Log in or register to post comments

Discuss this article

To control your subscriptions to discussions you participate in go to your Account Settings preferences and click the Subscriptions tab.

Enter your comments here

This user is a New Matilda supporter. imcauley
Posted Tuesday, January 29, 2013 - 13:33

Great article Ben

Over the weekend, thanks to the weather, our public liabilities just increased by a few billion dollars. This is on top of the liabilities already accumulated over years of neglect of our common wealth -- crumbling public transport systems, inadequate long-distance transport infrastructure, damaged eco-systems to name a few.

These liabilities do not appear in political statements about debt. If the Liberal Party had any nous they would be holding the government to account for these liabilities, rather than the vanishingly small financial debt it has incurred.

But of course most of these liabilities accumulated on Howard's watch, and they don't want to quell the hagiography about the Howard-Costello administration. And perhaps they have no concept of a public asset or of any obligation to maintain those asetes -- a lesson that only now Campbell Newman seems to be learning.

Posted Tuesday, January 29, 2013 - 13:37

A sovereign wealth fund - funded by a proper MRRT/RSPT - could be used for disaster relief as well as helping bring down pressure on the AUD (if invested overseas - e.g. in low carbon projects).

Seems "both" sides of Government won't have a bar of it. Also, Europe is now quite serious about deploying a Tobin Tax.

These reforms could be deployed with little effect on the average taxpayer.

Posted Tuesday, January 29, 2013 - 14:27

Use the Carbon tax/levy to pay for it. Indirectly at least, AGW is the supposed cause for fires, floods and other climate extreme events, and we are paying for it already, right? So no need for an increase.

Posted Tuesday, January 29, 2013 - 14:49

Given Australia's bloated 3 levels of government, with all of the waste, duplication and inefficiency that results coupled with massive costs to business attempting to comply with the regulations of multiple states and the Commonwealth, a different option is to reduce government costs and focus priorities on things that we need.

Business does this frequently because constantly raising prices is a good way to price yourself out of the market.

The other problem with just raising taxes is that many in the population cannot afford to pay more. People in 'mortgage stress' and living on the margins of poverty (e.g. single mums) cannot afford to pay more taxes, charges and whatever.

Politicians and public servants already enjoy massive (and often obscene) benefits paid by the rest of us. Surely they should clean up their own act before we start to impose further taxes on the population.

Yes, we need the money to clean up after climate and other disasters but we don't need to raise taxes to do it. We need to take a hard look at how we're using taxpayers' money first.

Posted Tuesday, January 29, 2013 - 15:46

Nice one Ben

Posted Tuesday, January 29, 2013 - 16:39

Will somebody please ask Tony Abbott what he intends to do to tackle Climate Change?
And I like the Tobin Tax suggestion

Posted Tuesday, January 29, 2013 - 16:43

An interesting article, Ben. But I now proceed to go off on a tangent, to some extent:
These guys in the Coalition will say anything to get into power. Have you had a look at the booklet they just put out? I have never seen such a load of dishonest bullshit.
Less taxes and more spending on infrastructure, and an immediate return to budget surplus? How are they going to do that? Sack the public service, screw the old and unemployed, cut back on health spending. All this when you've repealed the mining tax and the carbon tax, and reinstated kickbacks and special deals for your rich mates like you promised them.
The fact that these idiots are taken seriously by what looks like more than half the Australian population is a serious indictment of the intelligence levels in this benighted ex-penal colony.
I mean you live in Western Sydney and you haven't got your SUV yet and the mortgage is crippling because the parasites that sold you the land ripped you off and you think you need a five bedroom mansion and you both have to work and the kids are fat and depressed?
Or could it be the constant hammering by the sensationalist right wing media keen to get their cronies into power?
I mean the bottom line is that Abbott and Hockey and Pine and all the rest are just not very nice people, they are venal and dishonest and only thinking of themselves. They are all rich and send their kids to expensive schools. And they certainly don't have to worry about mortgages.

And don't come bleating back to me that Labor and the Greens are just the same. At least they attempt to care for the losers and at least it is their policy to do so.
Do you want to end up like the USA, where the bottom 20% of the population have intermittent welfare and no health insurance? Do you think the wrong done by widening class differences doesn't permeate the entire society - because that's what these clowns in the Coalition want, to make the rich people richer by making the poor people poorer. There's no other way to do it. Discredited economic theory - If the rich have more money, they will employ more people, spread it round, la-di-da. You bet. Don't hold your breath.

Posted Tuesday, January 29, 2013 - 17:20

Newman's response is conservativism 101. When bad things are happening to other people, or are happening on someone else's watch, it's all about bootstraps, stiff upper-lips and playing tough-guy. When it's you, suddenly you whine for help.

The big picture though is that if Australia had some political leadership with the nerve and the vision to stand up to the fat greedy bastards and take back control of our natural resources we would have all the money we would need for this kind of thing, and for a million other things to boot. Anybody out there? Anybody?

Posted Tuesday, January 29, 2013 - 17:30

Ben Eltham your just a total goose, a simple comment for a simple man.

Posted Tuesday, January 29, 2013 - 17:34

jeremiahW - ok, no disagreement from me about Abbott...but seriously...you think ALP is better? Aren't ALP implementing old Howard policies all over the place? Assylum seekers, NT Intervention?? With ALP caring about the "have nots" - how about their joint agreements on new and more difficult eligibility and rules for single parenting payments...??? Tackling unemployment and youth issues?? Mental health issues?? They all live off exactly the same money and pays that the coalition does - they are ALL completely out of touch with your average aussie citizen that struggles to juggle all the necessary costs of living as well as trying to pursue a dream or two...but forgetting the owning your own home one as that's WAY out of reach.

They are all the same and don't deserve anyone's vote - a stupid system/exercise in who the ordinary citizen chooses to screw them over...

Posted Tuesday, January 29, 2013 - 18:54

I'm with kuke, lets have a Tobin Tax. Europe (except for Britain under Cameron, he is saying no, no, no) wants to bring in a Tobin Tax, and may well do so sometime in the mid future. Probably the USA will try everything to kill it, and would certainly so NO to us doing it. And that would be that. The USA still have not admitted that it was their stupidity and 'free market fundamentalism' that screwed Europe. Probably never will, because the present administrations in Europe are also market fundamentalists. When will they ever learn!? Maybe when the people of Greece, Italy, Portugal etc. etc. revolt against the banks and Big Business (and the 'owned' Governments) and tell them where to stick their totally discredited American Free Market Theories.
jeremiahwuzza (now there is a name) you have it fairly well thought out, except that I agree with fightmumma, the ALP are NOT the alternative. These so called attempts to do something for the 'losers' as you so nicely put it, are never to be really taken seriously. They do quite a bit of giving with one hand, and taking (more) with the other. Sleight of hand? Spin for the dumb voters.
Just as a for instance, I am a Disabled Person, have been for over 50 years, and no Government, whether Labor or Tory, have ever done anything for me. I am absolutely convinced that this new Disability Scheme that Gillard and Co,. have thought up is a PR thing, nothing will ever come of it. When Labor are totally thrashed at the next election, the Mad Monk will immediately cancel everything done towards it. Gillard knows this, but is desperately trying to get a few votes her way. She is a totally cynical woman.
If she was real (the real Julie) she would immediately bring back the refugees from Nauru and Manus Island and process them quickly in Australia. She would also have to apologise to them all.
Immediately increase the 'dole' by at least $50 a week, to make up a little for the cold-hearted way she has transferred mothers to it. This would also make life a little more liveable for many more people around Australia (jeremiahw, your 'losers').
Immediately sack Jenny Macklin, cancel the NT (and the rest now) Intervention, and really,truly, start consulting the Aboriginal people about what THEY want on their land, and in the rest of Australia. But do not follow Noel Pearson or Marcia Langton, or Mundine, they are all Tories.
Then pick up the NT Labor Party, give it a very good shaking, and then put it to selecting a good representative body (with Indigenous people) for Territory and Federal elections. Dissolve the Labor National Executive. Start introducing the good ideas put up by Faulkner and others to remake the whole Labor Party.
Maybe then someone, decent Australians, would vote for them.
Gawd, if she did all this, I would even consider it.

This user is a New Matilda supporter. Rob Shield
Posted Tuesday, January 29, 2013 - 20:05

Love the irony, ozzydaz.

Posted Tuesday, January 29, 2013 - 20:26

I have to confess that issues like immigration and indigenous rights aren't a priority of mine when it comes to politics. The reason being they are huge time-wasters and opinion shapers and could probably be dealt with better at the 'grass roots' level. People who care (and I do) can create pressure on whoever reigns by dint of fundamental democratic rights like meetings and petition. If you can be bothered. If not, it's obvious you can't be bothered.

Re Howard: Howard's policies just about f_cked Australia and I don't think the present crowd has had much of a chance to fix it since 2007, what with small majoritys and hostile press, and K Rudd and the GFC in the middle of it all.

You don't want the Howard list explained do you?
Education - cut TAFE and public schools and expand private schools
Workplace - no I can't go on. You know the list. But they were lucky. No major recessions or global panic. Low refugee immigration for significant % of reign.

The differences: Imagine a magic land where Labor and Greens had a big majority.
We would get:
The Gonsky implementations
Murry Darling plan
The Henry Review
Another Levy for floods and fire
Disability support
Dental care
More enabled environment taxes (proper CO2, proper Mining tax)
And unless those taxes aren't more forthcoming,
They might still have to run a deficit.

But who cares - the whole system runs on deficit. The whole f_cking planet runs on deficit. USA deficit is about the same size as it's GDP.
Not good, but hey, what are you going to do - set up a new system or something?

So for me it comes to the lesser of two evils. I believe the Labor Party when it says it want's to do these things. Even if it f_cks it up it is mostly sincere. Just disorganised. I don't believe the Coalition, they seem to me to be malicious or confused.
I don't think they really understand. A bit like the Tea Party. That is the difference.

PS That picture of Abbott's wink at the start of Ben's article is a classic example of obsequious insincerity.

This user is a New Matilda supporter. O. Puhleez
Posted Tuesday, January 29, 2013 - 22:05

An Abbott government will operate to increase extremes of wealth and poverty, justifying it with trickle down theory. Like Howard before him he will appeal to self-interest, selfishness and aspirationalism.

Yet ironically at the moment Campbell Newman is stressing a collectivist policy response to the Queensland floods. 'We're here to support you'; We're all in this together'; etc. How this pans out once the TV crews depart will be an interesting development to watch.

The other irony is that if 97% of the climatologists are right, shifting rapidly off carbon on a global basis is at least as important as ongoing disaster relief.

Posted Tuesday, January 29, 2013 - 22:20

My money and vote is with fightmumma and dazza, but agree with a lot of things said here. Exept Qzzydazz. Sometimes Articles are written to shock to create disdcussion, stimulate the grey matter.
I don't agree with everything Ben says but I think his in the right Paddock and looking for a new one, for all the right reasons.

He gave you the right to comment, so, give him credit where credit is deu. His not the Prime Minister just a Brain Jogger and if his articles Joggs us out of our stupor, brilliant.

Posted Tuesday, January 29, 2013 - 23:43

we could save a hell of a lot of money by making our politicians take a pay cut, and streamlining their perks, privileges etc!! My autistic son could do Macklin's job for a tenth the income for a start!! Or just sack her and not replace the position - nothing is sometimes better than something especially if she has anything to do with it...

jeremiahW - when we switch governing approaches to grassroots...this DOES completely change the structure of governing duh!! (a better system/structure IMHO - but pigs will fly before it happens!!). Do you believe that there has been no grassroots input and solutions proposed by our Indigenous citizens to the NT Intervention - where have you been living the past 200+ years??? Government as it is - is directly set up to resist change, to resist certain power groups losing their strangle-hold on the important decisions for this country (and the majority of its citizens)...

We will witness this in our present era where changing environmental conditions are making natural disasters and environmental refugees new social problems for the political landscape. These power groups will keep all their perks and control in place, their heads firmly in the sand (or up their own bumholes) and a deaf ear turned towards the majority of Australians (and those people's lived real life experiences).

They will use their power to define problems and control the legitimising of social problems to keep away from improving this country - even for people sadly affected by natural disasters...how quickly will the qld premier change the song he sings from collectivist values when under duress (and when he wants federal help) back to fighting only for those power-players who enabled him into his current position?

It WILL be up to grassroots approaches and real people to stand-up and demand what is best for us - which our politicians do not know about seeing as they are completely out of touch with reality and rarely care about except in an election year...and then turn their backs on in order to keep their own jobs/careers and the influence of those who placed them there in the first place.

Posted Wednesday, January 30, 2013 - 12:23

I have watched Campbell (Belching Peanut) Newman spouting to the people of Qld. and either wanted to vomit/expectorate/urinate on him.
He really must believe that people are utterly dumb, to hear the mad slasher of Public Service jobs left, right and centre to cozy up to Peter Costello's very wrong/corrupt little economic papers, to say that 'we are all together on this' 'we will stand together'
'we will fight together' to the people, probably quite a few of whom have been rendered jobless by his slash and burn policies, who have now also lost their homes, possibly for the 2nd. or third times in a couple of years.
Again, we have this strange belief from most pollies these days that no matter what they do to the voters, rob them blind, remove all Government services, give their money to Religious organisations so that they can 'inculcate' their fairy stories into young minds, etc. etc. etc. when it comes to election time, and they get out their well paid spin merchants, tell a few thousand lies (which are NEVER questioned by our Murdoch/Fairfax media) they will be immediately returned to power.
And you know, stranger still, they are generally right.
What does that say about Joe/Josephine Citizen??!!
I mean to say, we smile. laugh about the US Voter, taken in by so much bulls@*t, so as to vote for Tea Party nutters, and their camp followers, the Republican Party, or even for that matter the Democrats, who are not what they used to be, as our Labor party is most definitely NOT. Nor is the LNP (or the Libs, anyway) the Party that Menzies, or even Malcolm Fraser, led. Are Australian voters so different. Not that I can see.
One has to wonder what sort of MENTAL BOMB (look out, ASIO comes) it would take to wake up the general voting public so that they actually took an interest in party policies come election times, and got THEIR supposed Media to ask the required questions of pollies, instead of just printing their election crap, and calling it news.
I despair.
Poor Fellow, My World.

Posted Wednesday, January 30, 2013 - 12:37

If balancing a budget is so economically crucial, why is it that a cruelly financed project such as building the Harbour Bridge in Sydney was able to haul Australia out of depression?
While the drongo's on the political right whinge about spending & debt, the money they spent while in government was wasteful, and the debt they paid off was with gold reserves squandered at an appallingly low rate. Now they whinge about the left spending on national broadband, insulation, and other initiatives that have served the economy far better than the traditional election time pork-barrelling of the LiberalNats.~ Galoots
. . . . Ref http://www.theaustralian.com.au/politics/howards-old-pork-barrel-reopene...

Question Authority

Posted Wednesday, January 30, 2013 - 12:51

dazza -

the thing that baffles me, is that enough people voted for him and thus agree with all the public services being trimmed up so much that certain portions of the populations are now at the mercy of worse education and health facilities...therefore the majority of the population WANT it that way!! We have the same in Victoria with Baillieu...people WANT it this way...this I do not understand!

But it is caused by our two-tier social class system where all those who are wealthy enough to pay for their own (superior) health and education needs - do not care about paying taxes to pay for OTHER PEOPLE'S education and health needs...their thinking I believe...is that these people are "undeserving" and should go out and get enough money by working hard enough (ie to "be just like us"...ie to all have elite jobs with elite wealthy families, status etc (!!) - not at all even realistic!) to also pay for everything themselves. If we had universal health and education, with no need for private services (or with these at much more expensive payment rates - and without any government/public money buffering to advantage certain people)...the public systems would be better services and more favoured by the majority of people.

I agree with you - it is BS!!

The ruling peoples can influence the opinions and interests of the majority by making the wealthier people able to access services that without government subsidies/funding they otherwise would not be able to access ("entitled"???? - these people feel entitled to such public money - though if you are down on your luck with disabilities, single parenting or unemployment you are NOT entitled!!). If you can JUST afford to scrape through and send your children to a private school (because of government funding) - you will want your children advantaged by the better private education and therefore support government policies that continue concentrating public money into private schools. This entire process gears government and public money into empowering the wealthier portion of the country. Therefore they vote AGAINST anything for the public because it threatens what they get themselves FROM the public purse (but without the social stigma of a welfare recipient!!).

This user is a New Matilda supporter. aussiegreg
Posted Wednesday, January 30, 2013 - 13:19


Three cheers for abolishing Macklin, and with her, her department!

As an anarchist, I would advocate abolishing <i>all</i> government departments if it weren't for the fact such a suggestion makes me sound like some kind of lunatic neoliberal!

Posted Wednesday, January 30, 2013 - 13:46

aussiegreg!! alas my rantings are exposed haha!! Since when are you an anarchist?? I don't mind organic anarchy...suits my grassroots bottoms-up approach to life (easier to kiss your own arse goodbye that way haha!!).
I remember quite a few people on NM saying that we get the government and politicians that we deserve...but I was trying to fit the Peris thing into our democratic process and I couldn't quite work out how we would be blamed as voters for anything she does that's a total cock-up??? Any suggestions? Can someone put my name up for a position if it is that easy to get into a main, influential player position? Oh - I haven't been to the Olympics DOH!! But I wouldn't mind taking on the whole sorry bunch of them...especially Abbott...

This user is a New Matilda supporter. aussiegreg
Posted Thursday, January 31, 2013 - 03:11


I'm sure you're indulging in a little hyperbole in your rant against the Premier of Queensland! I've never liked him, going back to when he was the martinet mayor of Brisbane, but I make the grudging admission that he was halfway competent in the job. I also remember his public appearances as mayor at the time of the last Brisbane floods, when he said all the things you see as so hypocritical in his statements as Premier, so one could mount a solid argument for him being quite consistent on these issues.

He was also consistent in taking the view you find so abhorrent that governments should live within their means, that if they are spending more than they are bringing in in revenue, and borrowing to make up the difference, sooner or later those chickens come home to roost. The more government borrows the more it has to pay interest on those borrowings, and the money that goes out in interest can't go out in flood relief (or for schools or hospitals or roads or whatever). What's worse, the more government borrows the more likely it is to find its credit rating downgraded, as Queensland did, with an immediate rise in the rate of interest it has to pay on its borrowings, and thus an immediate cut in the amount of money available for flood relief et cetera.

It might also be noted that mayor Newman was one of the only voices, a month before the 2011 flood, calling for water to be released from Wivenhoe Dam – had those calls been heeded billions of dollars of damage could have been averted. And he's been consistent again, this time as Premier ordering a pre-emptive release of water which contributed to the much lower flood level this time.

This user is a New Matilda supporter. aussiegreg
Posted Thursday, January 31, 2013 - 03:32

I should have thought a piece on the costs of flood reconstruction would have made some mention of flood <i>mitigation</i>. How typical of an uncritical fan of unlimited public spending not to give a thought to preventing flood damage in the first place when the bottomless public purse is there to endlessly repair the same damaged communities flood after predictable flood.

And given the most obvious and proven remedies don't require new taxes or even additional public spending it should come as no surprise that Ben doesn't want to see them mentioned. Always the killjoy, <i>I'll</i> mention them.

Firstly, dams on everyone of those flooding rivers at a point appropriate for a mini Snowy Scheme, i.e. for turning those flooding waters inland to be used for irrigation or for environmental flows in the Murray Darling, earning revenue in the process. And also in the process, falling through a hydroelectric scheme whose electricity sales should alone be sufficient to pay for the dam.

Secondly, levees around every significant settlement, paid for by a levy on the property holders so protected, who in turn may well find their insurance premiums reduced by more than the levy.

Thirdly, toll roads in parallel to all major highways et cetera. No private company builds a toll road in a way that is susceptible to being cut by flood – only governments are stupid enough to do that.

Fourthly – well, you get the idea.

This user is a New Matilda supporter. aussiegreg
Posted Thursday, January 31, 2013 - 03:49


Now if I had been exposing <i>your</i> rantings I would have pointed out
that all your savings from abolishing Macklin, divided equally amongst all the poor people you consider worthy of government largesse, would give each of them the proverbial widow's mite.

The "Peris thing" is kind of democratic: a majority of those who voted formally in the last election elected a representative for their electorate; a majority of those representatives, members of the Labor and Greens parties and three Independents, supported a government led by Julia Gillard, who is permitted by her party's rules to nominate anyone she chooses to be a senator for the Northern Territory, subject to ratification by the national executive of the ALP. As with anything the government does, if we don't like it we can vote them out at the next election, which uniquely we now know will be held on September 14. So it is democratic, sort of.

As for your qualifications for such a nomination, you do have a couple of qualities Nova Peris lacks: in this year of the National Disability Insurance Scheme you are mother to a boy with a disability, and as a kickboxer you could show that smug Tony Abbott how worthless his Oxford Blue in Boxing really is!

Posted Thursday, January 31, 2013 - 09:53

aussiegreg -
the thing is, didn't all governments with their new ideology of privatisation sell off state assets, and everyone keeps mentioning gold too, so why complain about governments and their debts and inability to pay it off when we had great assets and abilities to generate income, which we now don't have...which instead now goes into the private bank balances and wallets of our wealthy minority (who were the ones influencing government to make these privatisation changes in the first place!) (and who are the main group opposing the welfare state).

Using your own arguments and reasoning, it was the stupidest thing ever, for our governments to get rid of the mechanisms that were 1) developed through public funds ie the taxes of wage earners, and 2) continued to develop state income to pay for all these wonderful ideas of development that we now have to go into debt to pay for?? 3) now we go into debt and struggle to pay for any development, thus society and major works become a conflict between social programs and major works...

aussiegreg -
Also, thanks to my extra reading over the uni holidays - I now know that there are different forms of democracy and representation - delegates and trustees and politicos (a mix of the other 2). Delegates represent those who voted for them. What Gillard did was behave like a trustee who just acts off their own initiative and where the public leave all decisions in that persons hands. Peris is such an example of that, or so I believe from my limited reading of politics!! But aussiegreg - according to your analysis - doesn't this describe exactly what Hitler did too??

The error with these types of so-called "democratic" processes is that it disrespects the real principles of democracy where politicians truly represent their citizens and cheapens the entire process of placing particular individuals where their citizens have decided. There is an expected process for choosing representatives and Gillard's actions stretch the limits of that to breaking point. It is an abuse of power. Not even indigenous people in NT got to be involved in Peris' placement from what I understand - so where does representation go from here? She wasn't even a member of the Labor party!! What does this say about Gillard's respect for her members and pool of people she gets to choose from!!??

This user is a New Matilda supporter. aussiegreg
Posted Thursday, January 31, 2013 - 15:27


Gold is not an asset that earns an income, although if you sell it for more than you paid for it, as our government did, it can be a source of capital gains. Governments hold gold as an asset backing for their paper money, to provide confidence in the currency, a purpose increasingly served worldwide by governments holding one another's currency instead.

The kind of government businesses that governments state and federal and of both political persuasions have privatised over the last couple of decades did indeed generate an income for those governments, sometimes an income that exceeded what the money they cost would have earnt at the bank! They were only relatively risk-free because they were accompanied by legislation banning (or severely regulating, Ansett anyone?) any competition, otherwise most of them would have gone broke in short order, threatening the financial viability of their public owners in the process (State Bank of SA, anyone?).

I realise you are way too young to remember how terrible (and expensive) the service was from Telstra or Qantas/TAA (or whatever) before privatisation. My American friends in the 1970s were amazed we put up with such an appalling telephone service – oddly enough the thing that annoyed them most was not that Telstra supplied only rotary dial phones (and only in black) and charged for local calls, nor that their interstate and international charges were 10 and 20 times the American equivalents at the time. No, what annoyed them most was an area where there was actually a tiny bit of choice: you could have your phone on a cord that was either 6 feet long (standard) or 8 feet long (extra long). In the days before cordless phones (let alone mobiles) they were accustomed to carrying their pushbutton, avocado-coloured phone around their American home making endless free local calls, on a cord that was 30 or 40 feet long.

What especially annoyed the military man who headed up this particular household was that he could get one of his military communications guys to spend 5 minutes fixing up a 30 or 40 foot extension that would work perfectly well and with absolutely no effect on the wider telecommunications system, and yet he would be breaking Australian law were he to do so.

It is one of the myths of Nazi history that Hitler was democratically elected by a majority of Germans – the Nazis never got more than 33% of the vote (although they probably would have got a majority had they gone to an election in the late 1930s). Hitler relied on the support of the Nationalists to become Chancellor, allowing his erstwhile opponents to believe the Nationalists' monopoly of key ministries would render him toothless. He did however have Nazis in ministries thought minor until they became critical once he used State-of-Emergency-type legislation in the wake of the Reichstag fire to effectively, if gradually, seize dictatorial control of Germany.

By the way, fightmumma, are you familiar with the saying that when it comes to posting on boards like these, the first person to mention the Nazis loses?

Posted Thursday, January 31, 2013 - 16:34

Sounds very ocker?!
In the last lot of floods, Newman had not sacked 14,000 Public Servants. He may have sacked a few hundred from the Council, but that did not penetrate out bush. Asfor being consistent now, just what else could he say, as a politician. I still say that trying to tell people you have sent to the poor-house that now you are backing them like crazy, is totally hypocritical. His statements GRATED! He really did sound like a pollie.
I say that if Governments need money for Public Services, then hey should tax those that can afford it to pay for them. As things stand, most people who can afford to pay a bit towards society, do not, they actually pay nothing. Or like Kerry Packer, a few dollars from the billions he had accumulated. Actually, I think he actually sent the Tax Dept. a bill one year. He, like so many others who can afford it, would rather pay their expensive accountants. Which is why I support a Tobin Tax, tax every financial transaction above a certain amount, a small fraction of a cent. No one is really going to miss it, but all those little bits add up to billions over time. This would pay for the Services we all want and insist that we need.
As for the release of water from Wivenhoe, shades of the last floods, I did hear a few people say that they were going to sue Newman, that he had worsened the flooding of their homes and businesses. I can tell you are an LNP supporter.
As for flood mitigation, now you are going to join that clown who wanted to turn all the coastal rivers inland. Actually, I do think that this is part of LNP Policies. When I say clown, I mean clown. What an ecological disaster. But that is the mentality of most of the people on the Right.
And Levees. Well, I can tell you that that is easier said than done. Building town and cities on flood plains close to River mouths, and to inland creeks and rivers, has created a headache that is not going to be easily solved even by levees. Just where do you place the levees, and who is going to be left outside. But I see that you, have been listening to the Insurance Council, who want to shift the blame to local governments, and away from them, for all the people who this time are totally uninsured because of massive premium rises since last floods. Somehow or other, Newman is trying to say that maybe the Feds should step in and pay for all the damage this time. Well, beyond his 40 million dollars. Without raising taxes or levies. With a Federal election coming on, he is feeling his oats.
Actually, I do not think that you are worth answering any more. Not after that crap about Private Enterprise not making mistakes in building roads. Wow! So, all those tunnels that have had to be taken over by Governments after the Private Contractors have had to pull out because they under-estimated. All those roads built with Federal moneys since the last floods, by Private Enterprise, which have turned out to be hollow, and will all have to be re-done, because of cost-cutting. No one is even talking about making those thieves come 'to book', unfortunately. They have too many friends in high places. Lots of brown envelopes changing hands.
No sorry, "aussiegreg", you are beyond the pale. Not worth arguing with LNP cronies.

Dallas Beaufort
Posted Thursday, January 31, 2013 - 22:24

If digging deep still does not allow others to build homes above the flood zones, what is going on in this place. Ignorance personified of course to satisfy some green mates and their ideology now gone wanting after the fuel laden fires and now floods twice in 3 years? Its time to bite the bullet "sic" and stop burying political and public sector heads in the now stagnant sand..

Dallas Beaufort
Posted Thursday, January 31, 2013 - 22:27

I have every right to question local councils approvals in known flood zones while restricting approvals above the flood zones for so called scenic values. Obviously these local councils learnt nothing from 1974, 2011 or this year as they must all live flood free, with the inside knowledge their positions are safe. The Mayor of Ipswich may spit his dummy, but what hypocrisy when stating he lives on a hill and his insurance went up too. humbug...

This user is a New Matilda supporter. aussiegreg
Posted Friday, February 1, 2013 - 04:00

Now, @dazza, if your assessment of my voting intentions is any indication of your judgement, you have none – I am on record elsewhere on these boards as confessing an intention to vote Labor in the coming election. But unlike most people, almost certainly including you, my voting intentions are rational not emotional, I have no emotional commitment to a particular party which then becomes in my mind incapable of ever doing anything wrong, and the other side incapable of ever doing anything right.

I agree with you that it is a bit rich for Captain Smarmy Newman to be pretending he is standing shoulder to shoulder with the very people he dismissed in such cavalier fashion (whatever the fiscal imperatives) but this is not the hypocrisy you were originally positing and which I felt compelled to rebut, that is, that he took one position pre-flood and another post-flood. At least we now agree he was consistent.

I'm glad we also agree that if governments want to increase their spending they need to increase their revenue, not do as all Labor governments in living memory have done and put the extra spending on the taxpayer's credit card. Unfortunately your favoured source of additional revenue has proved in the past to be counterintuitively counter-productive: raise taxes on the wealthy and you actually find the tax take from that sector will <i>fall</i>. Cut taxes on the wealthy – as the Hawke-Keating Labor Government did – and you actually find the tax take from the top tax bracket <i> increases</i>. No one is completely sure why this happens, although one reason is the one you refer to – the wealthy prefer to pay a reasonable level of tax (in their view) rather than pay their expensive accountants almost as much as they might save in tax (from the lower rate)should the accountants clever schemes be successful.

Neoliberals, who like to think every wealthy person is also a struggling entrepreneur, suggest the explanation lies in leaving more money in the hands of those who know how to turn it into a successful business, one which not only pays more tax in its own right, but also employs people who pay tax et cetera, so the benefit to the public purse extends beyond paradoxically increasing the tax take from the top rate of income tax.

Keating spoke of the incentive it would provide to wealthy people to do whatever it is they do to earn more income, so that a lower rate on a larger taxable income added up to more revenue for the state.

And while Kerry Packer's personal tax avoidance is inexcusable, his companies did pay billions of dollars in various taxes over his lifetime, so I think the Commonwealth got its pound of flesh and then some. Have you been lobbying the present government to do more about closing down overseas tax havens instead of using up Australia's diplomatic capital (and a great deal of its real capital as well) on the vanity project of a seat on the Security Council?

I hadn't heard that anyone thought this year's releases from Wivenhoe had worsened the flooding, but I know the professional opinion is that exactly the opposite happened, and by a significant margin. But then I'm not predisposed to think the worst of Newman whatever the quality of the criticism.

As for turning all the coastal rivers inland, I think the "clown" you are referring to was a gentleman called Bradfield http://en.wikipedia.org/wiki/Bradfield_Scheme

I first heard about this idea over 40 years ago as a boy eavesdropping on the conversation between two civil engineers in a ski lodge in the heart of the original turn-the-rivers-inland scheme. Ditto levees, ditto tollroads, you see what an unoriginal person I am. I'm pretty sure this is not Coalition policy, but as for the Pineapple Party, who knows?

I also date my radical environmentalism (one of the many reasons a right-wing friend of mine calls me the most left-wing person he knows) from this time, when I copped a shellacking from my science teacher for a school science project I chose to write about the dangers of greenhouse gases (having sighted what may well have been the first use in Australia of that extraordinary analogy, by a CSRIRO scientist in Griffith). So I know a bit about the Greens' usual Chicken Little act when it comes to any proposal for anything that might actually make anyone anywhere in the world a little more prosperous – in short I think the environmental consequences of the Bradfield scheme have been grossly overstated.

My civil engineering acquaintances do not underestimate the difficulties of building levees in a way that will provide nearly-perfect protection, nor of the political difficulties of excluding certain properties where the cost-benefit analysis so dictates. But they say that it can be done, and economists say you only need a small number of floods to pay off the levees in savings on property damage alone, even without the more nebulous calculations of lost production et cetera. And let alone the personal calculations of misery and trauma.

This is not just an Insurance Council position, although there is an inescapable economic law to insurance as well: you cannot pay out more in claims then you take in in premiums without going broke and being unable to ensure anyone.

As for tollroads, if a private company misjudges the return it is going to get from, say, a tunnel under Sydney, the government gets that magnificent road for free. This is an economic misjudgement by the private company, not an engineering one, so my somewhat glib comment still holds. And contractors to government Departments of Roads, like all contractors to government, charge the highest price they think they can con idiot public servants into signing off on, and then deliver the cheapest road they think they can con idiot public servant supervisors into signing off on (perhaps, as you suggest, with the assistance of a brown envelope or two).

This is a completely different exercise from a private company building a road of its own, for which it will need to persuade motorists to pay a toll in order to recover the costs of construction and then make a profit, and as you have pointed out, as with any other area of business, they sometimes get this wrong, but the road remains magnificent, superb, vastly superior by anyone's standards to the goat tracks the government gets built.

This theory would have been put to the test 40 years ago, were it not for the election of the Whitlam government in December of 1972. My civil engineer acquaintances were part of a consortium that had persuaded the McMahon government to allow it to build tollroads through national parks – from Sydney to Melbourne via Canberra and the ski fields, from Bulahdelah to Kew, and a third road whose route escapes me for the moment – but had not had the paperwork signed when suddenly they faced a new Federal Transport Minister in the form of Charlie Jones. "This government," he opined, "is not about to assist the construction of private roads."

This user is a New Matilda supporter. aussiegreg
Posted Friday, February 1, 2013 - 04:02

Oops! Sorry dazza, left off the last line: "A man after your own heart, dazza."

Posted Friday, February 1, 2013 - 07:40

Dallas - yes I know what you are saying, in the town where I live, the well and long-known flooding river flats are now being opened up for housing!! With our few years of excessive rain and flooding, the very new houses (I'm talking under 4 years old!!) already had flood water lapping their back fences!! Because I walk my dogs daily in that area I have seen where the water lies making the land water-logged for over 1/2 a year and these situations are all on empty housing blocks with for sale signs out the front!! Who would want to build there!!? And when those houses eventually DO flood - which undoubtedly they WILL - we will all feel sorry for their occupants and insurance will go up...but the whole problem will have occurred due to choosing these positions as acceptable housing estates!!

The construction companies are now clearing another section of the same area even closer to the creek (a creek with banks that have eroded about 1.5m in the past 2 years in various places - I know cos I walk my dogs there all the time). Other areas in the same town that have been established for a long time, ALWAYS flood when we get heavy downfalls, with high insurance and flood warning systems in place for these areas...so why are similar types of land still being ok-ed for building? And why, when we now know that with global warming and rising sea levels (with accomplanying salination of waterways that have always contained FRESH water) why would people want to establish their homes on low-lying areas...aren't hilly areas the better option for the long-term?

Posted Friday, February 1, 2013 - 07:56

aussiegreg and dazza - an intersting sparring session from the two of you!

Aussiegreg - an acquaintance of mine, from dog trialling activities, used to work on the roads where I live when it was a publicly owned enterprise. He said the highway was in perfect condition and that the different crews had competitions on whose section was kept in the best condition. He still drives up that road to attend dog trials and can see its present disgusting and highly dangerous condition (a small car or motorbike could get lost in some of the potholes on that road!!).

The thing is, if you get a cheaer service, but it is cheap in quality too and transfers expense to other and more diverse areas of givernment and citizens' budgets - we don't really get the savings and efficiency you are talking about do we!!? ie worse quality roads equals wear and tear on cars, more accidents, more private repair costs, more insurance/rehabilitation/hospital/health costs, more funeral costs, more disabilities costs, lost worker productivity through injury/recovery/family crises, more distruption to all people's business/private affairs whilst accidents are cleared off the road...

I heard a ABC radio segment a while ago where the spokeswoman for Vicroads was stressing individual responsibility for our safety on the roads...this is a shift-the-blame game to change state commitment to being responsible for our safety whilst on the roads...rather than governments stepping-up and looking after their populations by making the roads we ALL use, MUCH safer...rather than acknowledging that at least in the case of roads, paying more from our individual incomes WILL get us ALL something worth that money ie safer roads and less of all those costs, time etc I mentioned above. Where I live they have spent a great amount of time/money building those safety rails of that fat wire stuff...often right beside roads with potholes a Kia would get lost in!! I suppose this way, when you lose control of your car in that pothole at least you won't run off the road into on-coming traffic!!

Posted Friday, February 1, 2013 - 13:12

Indeed, the scandal of housing developers being given permission to build hundreds/thousands of new housing on flood plains is a continuing saga.
The developers were always standing around the Bligh Government, with their little brown envelopes. They were so obvious they were a joke. Not what they do, of course.
Same with the Newman Government, they did not even try to disguise their contacts with various members of the new Government, after all, they are Private Enterprise, are they not. Much loved by Right Wing Governments.
In NSW this cosy relationship with the various Labor administrations has led to the present court case involving he Obeid family and an ex Minister.
Mostly, these cosy relationships are totally ignored by Media, par for the course, so to speak. Developers are like pilot fish around sharks, seemingly parasitic.
But, blaming most Councils for this is a bit 'off'. I am aware of Councils trying desperately to stop some of these developments, which seem to end up always with the various Land and Development Courts. Now it seems that all these Courts are stocked with Developers Friends (as they very much were in the days of the Belching Peanut) and it did appear that way when Labor was in power in Queensland, and I doubt very much that it has changed.
It costs the Councils hundreds of thousands of dollars of ratepayers money to mount cases against developers, and by now, most Councils are well aware that they are always fighting a losing battle. In Queensland, Development is God! Our new Premier has repeated the mantra, he is very much Pro-Develpment. At all costs.
So, let us give the various Councils a bit of slack here. They are NOT the final arbiters. A State Government appointed body is. Brown envelopes are sold at every Newsagent.
I do speak mostly of Queensland and NSW, as I know of situations in those states, but I believe that this same situation applies in all States.
As for Private Roads, I saw a few over in WA. They all lead to and from Mines. Built mainly by Private Contractors, they are beautiful roads, have to be good to handle the weight of all those trucks. But unfortunately, they all have big signs on them, NO ACCESS TO PUBLIC, GO BACK. They are built for Mine Traffic ONLY.
I have never actually seen a Public Access Road, built by Private Contractors, that had not got a built in service life of very short years. They really do cut corners to maximise profits. And remember all those buildings in some countries, built by Private Contractors. First little shake, and they fall down, killing thousands.
Lots of brown envelopes around when they are being built, also, to hand to so-called building inspectors.
I remember a few years ago, up at Tully, NQ, the Bruce Highway was being re-done, using Private Contractors. I think it was three times that the roads had to be torn up and relaid. A couple of MRD supervisors also lost their jobs. And yes, I know that there is a lot of rainfall around Tully, but the contractors were continually cutting costs by using inferior materials in the bedding, and not packing it down sufficiently. They were well aware of what they were doing. This whole fiasco caused some headaches in high places. I was working around there at the time. NOT in the MRD.
And fightmumma, perhaps hills may not even save the peoples. Arks may be better.
And when Contractors misjudge traffic under rivers etc. and their tunnel does not make 'even' money, Governments or Councils do not get the tunnels for free. Nothing is free in this world. Often, someone has to pick up the bad debts, and bankrupted Companies can not do it. Also, Private Participation in ppps costs a lot more than would cost Governments in financing. It has been pretty much agreed, except by the Right, that these ppps are a dead loss to the Public Purse. Much loved by the Right Wing Governments of Australia, backed by all those Right Wing Think Tanks. They just gotta be bad! Lots of profits sometimes for corrupt pollies mates, the Public Purse is almost always the big loser. It is intended that way. It is called Transfer! One way!
I was indeed referring to Mr. Bradfield in reference to turning rivers inland. But I do believe that quite a few of the Coalition (or the NP part of it anyway) still harbour such views, and every now and then, spout off. All investigations have proved, at least to my satisfaction, that this idea is utterly wonky. Just like their pushers. Was it not just last year that someone was spouting to turn the rivers inland, and make the North of Australia the food basket for Australia? Forgetting the experiences of the Ord River Scheme, although I see that this is again being heavily promoted.
In any case, everybody seems to be forgetting or ignoring Global Warming. All such plans will have to be re-thought, old fogies. The World, it is aChangin'.

This user is a New Matilda supporter. Venise Alstergren
Posted Friday, February 1, 2013 - 17:36

The trouble with your article Ben, is that you use logic. A quality completely unknown to Tony Abbott and his henchmen. (one or two henchwomen)

This user is a New Matilda supporter. Venise Alstergren
Posted Friday, February 1, 2013 - 17:40

There was a time when Queenslanders built their houses on stilts in order to save them from flooding-what happened?

This user is a New Matilda supporter. aussiegreg
Posted Saturday, February 2, 2013 - 02:29


As your roadbuilding friend dodged the potholes, I'm sure he was rueing his own time building that road, and the fact he was denied the materials, equipment and labour he needed to build a road that would never develop potholes, which (as dazza knows) are a product of poor original construction of the road bed and drainage works, and <i>not</i> of the surface. There are Roman roads in Europe, thousands of years old, sealed over with bitumen and with not a single significant pothole.

That is why private tollroads do not have potholes: the private owners cannot afford to see their customers deserting them, a commercial imperative not susceptible to brown paper bags.

This user is a New Matilda supporter. aussiegreg
Posted Saturday, February 2, 2013 - 02:49


I don't know if the contracts for Brisbane's tunnel committed the government to guarantee the bankrupt constructor's remaining debts, but I'm sure the Sydney ones didn't, and even if they did, paying those few debts would still make the tunnel a bargain for the State.

As an old fogey, I am old enough to remember the Berowra tollway, now part of the government-owned F3 Sydney–Newcastle freeway, and 45 years after construction, still the best part of it. I was living and working in Western Sydney – and <i>not</i> for the tollway company – when the Western Freeway was built as a tollway, for half the price the DMR had quoted and in half the time the DMR had estimated, but the tollway company only got to keep it for two years, and you are right, the quality didn't last much longer than a DMR road would have once it was in public hands.

Which rather proves my point – tollway companies will not build first-class roads unless they are going to reap the benefit of lasting quality. If they are going to be handing it over to the government after only two years (or whatever) they will build a road that will remain first-class for two years (or whatever). And the first time there are flooding rains, all that cheap and nasty construction will be exposed in potholes, broken edges, cracks etc.

This user is a New Matilda supporter. aussiegreg
Posted Saturday, February 2, 2013 - 03:04

@Venise Alstergren

"The Queenslander" remains an architectural style available to those homebuilders who appreciate its merits, which extend well beyond flood protection and enhancement of views to keeping cool by allowing breezes to pass underneath the house, providing a sheltered area for a second clothesline, an instant carport, laundry, et cetera. That more people do not choose to build in this style is probably a product of fashion more than anything else.

Posted Saturday, February 2, 2013 - 05:02

@ Ian Mcauley

Do you want to criticise the Liberals for <i>"a vanishingly small financial debt" </i>or do you want to criticise them because <i>"these liabilities occurred during Howard's watch"</i>?

which is it Ian?

Are Liberals bad because the liabilities increased or are they bad because the liabilities are inadequate and vanishing?

Posted Sunday, February 3, 2013 - 09:18

aussiegreg -

ok this is the way I think issues like this should be approached. The purpose of the service = safe, low-maintenance, public roads that are free to the citizens of our country. We ALL use these roads, the roads are essential especially for industry and business for their transportation needs as well as your average wage-earner. We ALL pay for the roads. The money we pay gives us the safe roads we deserve/need to avoid untold personal, private loss, despair and rehabilitation and to enable private lives and business/industry to run efficiently.

When we pay private construction companies out of public money - you are saying that there is a great possibility that this money will lead to poorly constructed roads, using cheap materials and ending with roads in need of constant repair - AND therefore in need of constant publicly funded repair. How is it good policy to use the tender process when this is the result? All the construction company has to do to ensure continues business, is to build a poorly constructed road where THEY will be paid more from the public purse to mend it...???

Now if (and I am no expert in how these projects are organised) the construction company uses their own money and invests in the project (I think the tunnels under Melb are done this way??), as part of business dealings, they WILL want to make a profit from their investment won't they? Normal business processes and common sense.

They question to me which is the concern, is that our roads have always been public assets because they are used by all of us for the benefit of ALL. When this changes to us having to pay a private corporation for what they have built - this changes the road from a service to a commodity doesn't it? My concern is that these things in society should NOT be commodities - they should be accessible and opportunities for EVERYONE because we are a society not only consumers in all spheres of life

Applying business models and economics principles across society where these enter/invade personal, social, community type domains is a big mistake IMHO. These principles SHOULD be our SERVANTS NOT our masters...private construction companies owning/profiteering from public roads interfers in community values/processes (one big problem being development companies challenging the wishes of citizens/local councils where these people cannot get their intersts/needs/wishes listened to/respected as much as the wealthy company when the matters go to tribunals and courts). Once a public asset becomes something we have to pay for, of course the most economically disadvantaged in our society can longer participate in their communities and society as much as they could when transport was a public asset - this leads to marginalisation of the lower socio-economic groups in society. With profit being the end objective for these corporations, costs of services go UP, services are cut in some areas (usually regional areas), services that are important to citizens but not cost efficient (like guards on trains/stations) will disappear, deregulation hides cutting of safety inspection/maintenance...all of which are negative for the citizens, often dangerous and denies access to some citizens (poor, disabled, elderly).

So, the purpose of transport being the service of citizens and public/private enterprise - when all these negative things happen - well - we don't really get what we are requiring from the service anymore do we? So, do we pay for something when we don't get what we actually want/need?? And before you or others kick up a stink about higher taxes - I wonder how much money each of us spends in all those tolls to use these privately funded roads/bridges/tunnels - probably the same as if we HAD paid more taxes...and with the money staying in the control/accountability and as an asset of our own States. Or had to suffer the costs associated with bad roads, driving own car rather than using excellent public transport, paying parking (Melb is extremely costly!!) and risks of car accidents/vandalism/theft of cars (associated increased insurance too!)???

Posted Sunday, February 3, 2013 - 09:31

aussiegreg ps -
also, I know one of your replies will be about public debt and the pressure on governments to not be in debt - but why can the business world often operate with great debt and just have to "manage debt" and public money even saves them from complete bankruptcy, AND our most wealthy individuals/corporations (often with profits greater than the GNP of some countries) can operate with huge debts/borrowings while this is not the standard/expectation likewise given to the countries of the world? This is a double standard and it is done in a way that holds back progress, innovation and access to greater wellbeing for the citizens of the world...unless of course someone IS a member of that wealthy minority of course. If a nation have proper democracy and all the checks and balances in place to monitor and control the debts (just as a private corporation has to do) why can't we operate in the same way as a corporation with debt? And I still don't see why it is considered acceptable and positive, for governments to enable private business to do what the financial institutions in USA did (with removing constraints, regulation etc) - and then for public money to save them. Governments in developed democratic countries DO have to answer to others and check spending/debt so wouldn't these groups (that in theory anyway serve citizens) serve society better if they also had these freedoms that the wealthy private minority do?

Posted Sunday, February 3, 2013 - 12:32

I just had a great article written out, and pressed some sort of wrong button, and lost the lot.
But, fightmumma, remember that Governments can borrow money much cheaper than Private Enterprise. If they borrow to build infrastructure, it costs the Public Purse much less in the long run, never mind the garbage that comes out of the Right Wing think tanks to the contrary. Public Private Partnerships (ppps) are simply designed by Big Business and foisted on Government to transfer Public wealth, the commonwealth, to Private pockets. And the Private contractors still rip off the Public by building shoddy infrastructure. Built in obsolescence.
And unless Freight Transport is moved to Rail in the very near future, there is just no way that our road system can cope. It is already under tremendous stress. The Road Freighters will fight this tooth and nail, as usual, but they must LOSE if we, the public, are to win.

Dallas Beaufort
Posted Sunday, February 3, 2013 - 13:56

The Greens and Labor prescribed no building on the hill sides which are flood free to pinch an environmental political score, now sorely missing while the 7 odd % drown their investments and starve financially post 74. What a bunch of wanker's who have no real appreciation of survival values outside the public service over inflated haunts in a home away from home.. Left of centre, bullshit sic puppies the lot.. And that's not to mention all of those approvals in the gullies under Green Labor in Queensland, factoring in their mates and green preferences.

Posted Sunday, February 3, 2013 - 19:11

Posted Saturday, 02 February 13 at 2:29AM
This proves that you are, Blind.

I said it before, no one or very few people actualy pay real Taxes.
Governments use the Tax Purse which is filled by Coal Minning and some export Industries to channel this wealth which realy belongs or once belonged to the indiginous people into the pockets of the dreamers who in turn pass it on to the Bankers and we know who they are.

The only real wealth creation is Minning, farming, forestry, why because we never count the cost of what we steal out of the ground or chop down. But once you have, it needs to be turned into something, so that Consumerism can turn it into cash and the rich then turn it into Gold.

Why did America go from debtor to Creditor after WW1, when 85% of the worlds manufacturing and wealth used to be in the hands of the big 4, after WW1 there were only 3 and 2 of those were broke, owed America Millions after being Creditors. Thats how America ended up with the Heady days of the 20's and then the 30's depression. Their were only four Countries with any wealth to buy of somebody, then their was only one, you can't sell to yourself. The American consumer/people had to borrow money into exsistance to keep the dream alive, it didn't work, they ended up with too much money in the hands of the few.

Arms Manufacturing made America the Creditor, no war no Arms sales, no taxes. Same here no digging or plowing or chopping no making products or taxes.

Aussie You have turned life into a Constant Loop Economic equation and your lost in it. Consumerism just for economic growth does not work, you must have wage earners, before you can sell anything, made from what we dig up, and Manufactured else where. China.

The river flows from the top to the bottom, same with the economy. Its starts with Plowing, Digging, Chopping and then the Taxes are supposed to flow from there. How do you make water go back to the top of the hill, Nature, Evaporation. What about Wealth, Currency, The Economic wealth of a Nation. You use Infastructure spending, so why isn't it working, no taxes and currency turned into Gold. Turning Money into Gold is like removing Evaporation, no evap no rain clouds, no rain fall, no river. No Economy

No wonder you went broke, you got lost in subset Economic Bonkum, Formulas.

You amaze me, you come up with some of the most inteligent dribble I have ever heard, your over educated and you actualy believed the crap you read in that Economic Bible written by Monkeys.

have a read of what Bill Bonner says about Economics and economists.

And don't say you agree because your then a Liar, your Therois are based in their dribble. Allan Greenspans dribble. He was an old fool who believed in Economic Witch Craft. Trojan Horse.

This user is a New Matilda supporter. aussiegreg
Posted Sunday, February 3, 2013 - 19:48


We don't ALL use roads, not if we are in hospitals or nursing homes for example, but more importantly, we do not all use roads to the same extent or in vehicles that subject those roads to the same degree of wear and tear, a pushbike versus a B-double for example, especially a pushbike used by a hermit couple of times a year against a B-double driven 24 hours a day seven days a week.

The reason governments of both political persuasions use the tender process is simple: even the tenderers with their build-the-worst-road-we-can-get-away-with approach still produce a better road at a cheaper price than the old public-service-based done-by-the-DMR roadbuilding could produce.

You know the old joke which goes "the government should nationalise crime – it's the one way to make sure it won't pay"! There is a reason why governments of both political persuasions subscribe to the view that in the public service – and we are talking about administration here, not frontline services like nurses and firefighters – 80% of the work gets done by 20% of the people. It's because most public servants are also doing the minimum they can get away with.

I would just reiterate the example of Sydney's Great Western tollway: built by the tollway company in half the time at half the price and to a superior standard to that promised by the New South Wales DMR.

Tollways are never the only road the public can use – no one is ever forced to pay a toll to get from A to B. Drivers <i>choose</i> to pay tolls for a variety of reasons, usually for a shorter trip, but sometimes just for a more relaxing one on a freeway with a superb surface rather than battling along a potholed highway with multiple intersections et cetera (or to take a tunnel rather than battle through city traffic, multiple red lights et cetera). The Berowra tollway, for example, was an alternative to the Pacific Highway on which no toll was payable. That tollway from Sydney to Melbourne through the Snowy Mountains would have been an alternative to the Hume Highway, back then a real goat track. The Bulahdelah to Kew one would have been an alternative to the Pacific Highway, <i>still</i> a goat track in places!

And no community I have ever been part of thinks it's wonderful we have goat tracks where we could have freeways for the same money. You remind me of the late ALP Senator John Wheeldon, who joined some of his colleagues in a trip to visit China in the wake of party leader Gough Whitlam's groundbreaking visit there in 1971, and was reported by one of those colleagues as waking up in a tent in one of the poorest parts of China to look out on dirt-poor peasants dragging themselves to another day of backbreaking labour in the paddyfields and turning to say, his face wreathed in smiles, "isn't it wonderful?"

By the way, I don't own a car, and as a rabid environmentalist would always prefer to see public money spent on public transport, bikeways et cetera than on roads. But I cannot understand why governments stand in the way of tollway companies who want to spend their own money offering drivers an alternative to the public roads.

This user is a New Matilda supporter. aussiegreg
Posted Sunday, February 3, 2013 - 20:22

@fightmumma #2

Actually, having an unsustainable level of debt – in the business world it's called over-leveraging – is one of the principal causes of bankruptcy for bigger businesses. Companies get overconfident in their ability to put that money to such profitable work that they will be able to repay it, principal and interest, and still have an asset which can earn an income, a profit.

Government borrowing for government programs which do not earn an income has to be serviced from the government's other revenue streams, principally taxation. So the government program you get today is paid for with money that has to be repaid with interest out of taxation revenues that could be used to pay for the government programs you get tomorrow, or rather which you <i>don't </i>get, because the money has to go to payment of interest, and eventually, principal.

When governments borrow for public-enterprise purposes, that is, for programs which <i>do </i>earn an income, or are expected to, those borrowings are treated like commercial borrowings and do not appear as part of government debt, even when the business case on which the borrowings are based is a back-of-the-envelope job like the National Broadband Network. If those public enterprises lose money, as they almost inevitably do if the government allows private enterprise to compete, then the losses have to be made up out of taxation revenue et cetera, and once again other programs must suffer to make this money available. It was this cruel logic that drove the Hawke-Keating government, completely against Labor ideology, to privatise so many government businesses.

As for what happened in the USA post the GFC, I am on record elsewhere as describing the TARP bailouts as the greatest crime in the history of the planet, when Wall Street's plant inside Bush Jr's White House, the Secretary of the Treasury (and former CEO of Goldman Sachs) Hank Paulson Jr persuaded a Democrat Congress to take $800 billion of the taxes of the working poor in America and hand it over to cover the debts of the merchant banks who had been gambling recklessly at the tables of casino capitalism. While the poor starved, obscenely wealthy bankers got even more obscenely wealthy stuffing their pockets with public funds.

That said, don't forget the sub-prime crisis was largely a product of governments of both political persuasions putting pressure on lenders, especially Fannie Mae and Freddie Mac (which were only nominally privatised) to not "discriminate" against poor people (and others who couldn't demonstrate their ability to repay a loan) by denying them a mortgage. A typical government policy: lend money to people who can't afford to pay it back. And it was a Democrat President who abolished the Act which had enforced strict separation between retail and wholesale banking, so that when the chickens of derivatives trading came home to roost, they roosted on the ordinary customers of bank branches as much as on the screen jockeys in the back rooms.

Dallas Beaufort
Posted Sunday, February 3, 2013 - 20:22

While Australians are drowning in debt in the flood zones these twerps ponder.

This user is a New Matilda supporter. aussiegreg
Posted Sunday, February 3, 2013 - 20:44


You are of course correct that governments can borrow much more cheaply than private enterprise – they are a pretty safe bet, even in these days of sovereign risk, to repay the money, given taxation powers et cetera, so lenders are willing to accept a lower rate of interest.

This makes it all the more remarkable that they cannot build roads except at twice the price and taking twice the time of the tollway operators like the one who built the Great Western tollway in Sydney. It's just an extreme example of the inefficiency and ineffectiveness of public enterprise when it comes to actually producing real things like roads.

Given your comment on Road versus Rail, I'm guessing you haven't got a quote recently for rail freight!

I too would like to see a lot more of the freight that presently travels long distances on our roads travelling instead by rail – the greenhouse gas emissions per tonne per kilometre are about 60% of those you get freighting by road – but for this to happen we will have to do get the cost of rail freight to where it ought to be, given the natural efficiencies of the system compared to roads. What is distorting those natural efficiencies is government ownership, and specifically ownership run for the benefit of the railways unions, and I confidently predict a privatised railway system would swiftly bring down the cost of rail freight, just as a privatised Qantas bought down the cost of air freight.

On the other side of the equation, we need to make sure that the road freight industry meets the real costs to the public purse of its heavy vehicles travelling on public roads. There are systems available that provide a constant measurement at each wheel of the pressure any particular truck or trailer is applying to the road, and therefore the wear and tear for which it is responsible. If these systems were mandatory – and if we could be sure they couldn't be tampered with – road transport companies could be charged periodically for the damage done to our roads.

They will of course have to pass those charges on to their clients, many of whom will find rail suddenly competitive, and the rest of whom will be helping to finance better roads for the rest of us (always assuming the government does not siphon off a large portion of the revenue from those charges for other uses, as the Feds did with fuel excise, originally implemented to finance roadbuilding).