
Issue No 86		02 March 2001

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News

Who Pays for the Public Works?

By Alison Peters

Plans to allow the private sector to build, own and operate public infrastructure carry all the pitfalls of other forms of privatization, NSW unions have told the Carr Government.

Labor Council and several affiliated unions have lodged submissions in response to the Government's discussion paper "Working with Government - Private Financing of Infrastructure and Certain Government Services in NSW" . In the discussion paper the Government promotes using the private sector to fund the construction of new infrastructure.

The union movement accepts that the private sector has made, and will continue to make, a significant contribution to the building and establishment of schools, hospitals, roads and other forms of infrastructure. However, the discussion paper goes much further than paying business to build things. What is being discussed is having business pay for the construction of the infrastructure and then to be allowed to operate it (through a leaseback or user charge) in order to recoup their costs and to make a profit.

Such schemes already exist in NSW and are known as BOO (Build, Own, Operate) schemes and don't have a particularly good reputation as far as taxpayers are concerned. The Harbour Tunnel and other toll roads, for example, were critisised in various Auditor General's reports because the contract required the Government to make up any shortfall in revenue to the private operators.

Critics argue that these schemes are used to get around Government policy to reduce debt and government borrowings. The Government (and the taxpayer) ultimately pays for this infrastructure but at the same time have passed responsibility and control to business.

This is no different to other forms of privatisation and has all the same sorts of problems :-

� job losses

� reduced employment conditions

� loss of expertise within the public sector

� loss of government revenue streams

� loss of control

Labor Council's submission calls for proper consultation with the union movement and the broader community about how important infrastructure should be funded and how it should be operated. This needs to occur well before developing procedures to manage private sector funding of infrastructure projects which seems to be the sole aim of the discussion paper.

For copies of Labor Council's submission please email Alison Peters at [email protected]

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Issue 86 contents

Interview: Master of Opposition
Over the past five years, John Faulkner has turned the Senates Estimates structure into his own House of Pain. He explains the art of Opposition.

Politics: Beazley the Bridge Builder?
As the Howard Government flounders, Brett Evans looks at the challenges Kim Beazley faces as his hour of destiny approaches.

Unions: Lashing & Loathing at Patricks
Three years since one of the Howard Government�s most infamous episodes, the Waterfront War, Zoe Reynolds discovers how casuals are now doing the doing the dirty work on the docks.

Legal: Workers Without Rights
Mark Morey outlines the legal status and (lack of) rights for foreigners in Australia on working visas.

International: Dispatch from the Dispossessed
Mahendra Chaudhry, Leader of the People's Coalition and the Fiji Labour Party comments on this week�s court decision.

Economics: Business Power and Mobility
The US election season makes it patently clear how Big Business is able to transform its financial resources into political power via campaigncontributions.

History: The Spoilers and the Split
The Movement, Groupers, the DLP and The Doc. All have been blamed in various ways for the ALP split in the 1950s, ensuring the ALP was kept out of federal government until 1972. Can One Nation return the favour?

Review: The New Hard Politics
Dennis Glover argues that policy has taken over from spin as the political battleground of the new century.

Satire: Bradman Latest: Family In Dramatic Court Action
The family of the late Sir Donald Bradman yesterday sought a restraining order against Prime Minister John Howard after it became apparent that he wants to be involved in every single detail of the The Don's funeral.

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