Stumbling into the future: living with the legacy of the great infrastructure sell-off


Phillip O’Neill, Western Sydney University

This is the fourth article in our series Making Cities Work. It considers the problems of providing critical infrastructure and how we might produce the innovations and reforms needed to meet 21st-century needs and challenges. The Conversation


The privatisation of urban infrastructure in Australia is an ironic story. The vehicles of urban infrastructure – the utilities and the state-owned enterprises – were so central to the life of cities that they became perfect entities for private sell-off. We now live with the consequences of the sell-off.

The utilities flourished in Australia as a nation-building exercise following the second world war. The Bretton Woods agreements entrenched Keynesian fiscal behaviours across the Western world.

The utilities thrived on the willingness of governments to raise capital for public works. They were also central to the development of state capacity and the assembly of a career-based professional public service. As part of the social compact, the public accepted reasonable user pricing for the availability of water, energy, public transport and telecommunications services.

Hence, the utilities and the state-owned enterprises led the roll-out of urban infrastructure in the second half of the 20th century. This roll-out shaped the nature of Australian urban life, its format and flows.

But then fiscal crisis of the state descended in the 1970s and 1980s. The sell-off of public assets was seen worldwide as a solution to state indebtedness. Arguments that private enterprise could deliver infrastructure services more efficiently added impetus.

A wholesale transformation

Few governments resisted the sell-off urge. Australian governments, state and federal, participated in the sell-off, though in a stuttering manner. Through time, however, the change has been substantial.

Abbott and Cohen calculate that the output of state-owned enterprises in Australia in 1989-90 accounted for 7% of GDP, 9% of total employment, and 14% of gross fixed capital expenditure.

By 2011-12, the output of state-owned enterprises had fallen to 1.3% of GDP. Their gross fixed capital expenditure contributed only 1.8% of the nation’s total. The authors estimate that proceeds from privatisations in Australia since 1987 total around A$194 billion (in constant year 2000 dollars).

The sell-off commercialised and privatised a raft of assets: electricity generation and transmission, gas distribution, airports, ports and telecommunication. New assets went straight to private hands: motorways, public transport, renewable energy generation, and freight handling.

The shedding of public responsibility for infrastructure meant public investment in Australia as a share of GDP fell from more than 5% in the mid-1980s to well below 3% by the end of the 1990s.

What’s in it for investors?

There is much to understand about the sell-off. Here I focus only on why private investors are willing to pay extraordinary prices to acquire urban infrastructure assets.

The attraction of investing in an urban infrastructure asset comes from the infrastructure services being embedded in the daily flows of people, water, energy and information throughout a city. The flows of a city are remarkably ordered in terms of volume, direction and timing.

How a city operates is dependent on the co-existence of decisions by infrastructure operators and users. The operators decide how and when services will be available. Households and firms decide what they will be doing across a 24-hour day and therefore how and when they will use the infrastructure services on offer.

Thus, the efficiency of infrastructure provision comes from the predictability of the flows of a city. These in turn come from a historical patterning and sequencing of behaviours by householders and firms as they read off and conform to each other’s movements.

An example is the relatively sympathetic structuring and sequencing of work hours and school hours. This ensures that public transport facilities are utilised more efficiently in peak hours, while the hours that parents and children spend together are made more convenient.

The embeddedness of infrastructure into city life means that revenue streams from user fees for infrastructure services are highly predictable and stable. And because transport, water and energy supply is usually monopolised, the householder has little choice but to continue as a consumer of an infrastructure service.

The books of a utility or state-owned enterprise, then, represent a discrete set of households well trained to pay their monthly bills. This is precisely the type of revenue stream that pension, insurance and sovereign wealth funds seek when faced with the peculiar problem of having surplus cash to lock away for at least the next two decades.

What did we lose in the sell-off?

Perhaps it was clever to have solved a government debt problem in Australia back in the day through a sell-off of assets to a new class of long-term investor. But as a consequence we have lost other things.

Infrastructure as a planning tool to shape our cities is one. Revenue streams to subsidise needy customers or supply to remote locations is another.

And, critically, we have lost the opportunity for the state to revamp energy, water and transport systems to allow for innovative supply and demand formats – such as distributed electricity supply networks – that are more appropriate to a climate-threatened planet.

Long-term privatisation contracts, most of them closed to scrutiny, lock urban infrastructure provision into 20th-century formats.

The difficult task now will be their unlocking.


This article draws on a research paper by the author in a new special issue of the international journal, Urban Policy and Research, on critical urban infrastructure. You can read other published articles in our series here.

Phillip O’Neill, Director, Centre for Western Sydney, Western Sydney University

This article was originally published on The Conversation. Read the original article.

Australian Politics: 17 July 2013


The asylum seeker controversy in Australia is deepening, with four more deaths after another tragedy at sea last night. There is yet another boat in distress right now as well. Compassion would seem to be much in need from where I sit, yet most Australians seem to have very little when it comes to the plight of refugees and/or asylum seekers.

Still, an election can’t be too far away as the various parties begin the usual pledges to spend money on this and that – certainly infrastructure needs are great in this country.

Meanwhile Kevin Rudd has held a community cabinet meeting overnight.

Spike in Anti-Christian Violence Feared before Burma Elections


Attacks on Christians seen as politically expedient in majority-Buddhist nation.

CHIANG MAI, Thailand, January 21 (CDN) — As Burma’s military junta gears up for its first parliamentary election in two decades this year, observers fear attacks on the Christian minority could intensify.

Mungpi Suangtak, assistant editor of a New Delhi-based news agency run by exiled Burmese journalists, the Mizzima News, said the Burmese junta has “one of the world’s worst human rights records” and will “definitely” attack religious and ethnic minorities more forcefully in the run-up to the election.

The military regime, officially known as the State Peace and Development Council (SPDC), pledged to hold the election this year, and analysts believe polls will be held after July in the country, also known as Myanmar.

Suangtak told Compass that the Buddhist nationalist junta would target Christians particularly in Karen state, bordering Thailand, and in Chin State, bordering India and Bangladesh.

Many Christians are part of the Karen National Union and the Chin National Front, armed resistance groups that have been demanding freedom or autonomy for their respective states for decades, and therefore the junta sees the Christian minority as a threat, said Suangtak.

There are over 100,000 Christian Chin refugees in India who have fled the junta’s attacks in the past two decades, according to Human Rights Watch.

Christians in Karen state are not safe. A Karen Christian worker living in the Mae La refugee camp on the Thailand-Burma border told Compass that ethnic Christians were facing human rights abuses by the junta “on a daily basis.” Most recently, Burma army soldiers attacked a church, murdered a local farmer and injured others in Nawng Mi village on Dec. 19, 2009, reported Burma Campaign UK.

Parts of Karen state fall under the “Black Zone” – identified by the Burma army as an area under the control of armed resistance groups where its soldiers are free to open fire on anyone on sight – and the junta has been launching indiscriminate attacks to take control of village after village, said the Karen Christian.

“Those who are not able to flee across the border during such attacks are either killed or forcibly relocated in and confined to temporary camps set up by the junta,” the Christian said. “Since the army litters surrounding areas with landmines, many local people die or get injured while trying to run away from or coming to the camps to look for their relatives.”

Over 150,000 refugees from Karen and neighboring Karenni states of Burma are living along the Thai side of the border, according to the United Nations High Commissioner for Refugees. More than half of them are Christian.

A representative of the Free Burma Rangers (FBR), which trains and sends teams of local people to help victims of the junta’s attacks inside Burma, said youths have been forced to become Buddhists in Chin state, where over 80 percent of the people are Christian.

Printing of Bibles is restricted, and churches are destroyed on a regular basis in the state, the source told Compass on condition of anonymity.

Access for foreign visitors to Chin state is, with some exceptions, prohibited, and the state is widely acknowledged to be the poorest part of the country, said Rogers.

“According to one Chin, the reason Chin state is denied resources, and foreigners are denied access, is specifically because the overwhelming majority of Chins are Christian,” stated a 2009 report by London-based advocacy group Christian Solidarity Worldwide (CSW). “The SPDC has, it is believed, taken a deliberate decision to discriminate against Chin Christians.”

The report cited a Chin Christian man who had served in the Burma army who faced discrimination.

“I had a colleague who was a Chin who became a Buddhist and he was promoted,” the Christian says in the report. “I was told to change my religion if I wanted to get promotion. I refused to convert.”

The report also quoted a Chin Christian as saying that students from a Christian youth fellowship at a university in Kalaymyo, in Chin state’s Sagaing Division, collected funds among their own community to construct a small church.

“However, in 2008 and again in 2009, ‘extremist Buddhists’ destroyed the church building, and when the students reported the incident to the local authorities, the youth fellowship leaders were arrested, detained and then released with a warning,” he said.

Religious Pretext

Suangtak said successive governments in Burma have promoted Buddhism since General Ne Win took power in 1962, leaving Christians insecure.

“There is a general feeling in Burma that the state represents Buddhism, and most Christians, particularly from conservative sections, cannot trust the regime,” said Suangtak.

Benedict Rogers of CSW said the junta doesn’t differentiate between individual Christians involved in armed struggle and ordinary Christians who have not taken up arms.

“And when it attacks villages in conflict zones, churches and pastors are often among the first to be attacked,” Rogers said.

A Christian worker from Burma’s Mandalay city, however, told Compass that thus far he has heard no reports of any major anti-Christian incidents there. He said he was hoping the junta would try to woo people with peace rather than violence.

“But nothing can be said about the unpredictable junta,” he said, adding that it was difficult to receive or send information in Burma. “Even in cities, the information infrastructure is limited and expensive, phones are tapped and e-mails are monitored. And the press is owned by the state.”

Rogers, deputy chairman of the human rights commission for the U.K.’s Conservative Party, said the Buddhist nationalist regime “distorts and perverts Buddhism for political purposes and is intolerant of non-Burman and non-Buddhist ethnic and religious minorities, including Christians and Muslims.”

Of the 56 million people in Burma, around 89 percent are Buddhist, with only 4 percent Christian.

Given that the junta merely uses religion for political power, it doesn’t target Christians alone, Suangtak said.

“The junta has no respect for any religion, be it Christians or Buddhists, and anyone who opposes its rule is dealt with harshly.”

Burma was ruled by military regimes from 1962 to 1990; at that point the National League for Democracy party, led by Nobel Laureate Daw Aung San Suu Kyi, won the parliamentary election. But the regime seized power again by imprisoning members of parliament after the election.

Rogers, who has co-authored a soon-to-be-published biography of SPDC chairman Senior General Than Shwe, said that while the armed groups are not perfect, they are essentially fighting to defend their people against a “brutal regime” and are “not in any way terrorists.”

“The armed groups have sometimes launched pre-emptive attacks on the military, but they have never attacked non-military targets and have never engaged in indiscriminate acts of violence,” he said. “Even the pre-emptive acts are conducted for defensive, rather than offensive, purposes.”

Rogers added that resistance groups were fighting to defend their people.

“Individual Christians who have joined the armed ethnic groups do so out of a perfectly biblical concept of just war, the right to defend your people from gross injustice.”

Added an FBR source, “In Burma, no one protects except the pro-democracy resistance groups, and all relief inside the country is only possible because of them.”

International Disrepute

The 2009 annual report of the United States Commission on International Religious Freedom states that Burma’s military junta had “one of the world’s worst human rights records.”

“Burma’s Christian populations face forced promotion of Buddhism and other hardships in ethnic minority areas where low-intensity conflict has been waged for decades,” the report states. “In addition, a new law passed in early 2009 essentially bans independent ‘house church’ religious venues, many of which operate because permission to build church buildings is regularly denied.”

The report also pointed out that in January 2009, authorities in Rangoon ordered at least 100 churches to stop holding services and forced them to sign pledges to that effect. Burma, which the ruling junta describes as “The Golden Land” on its official website, has been designated as a Country of Particular Concern by the U.S. Department of State since 1999.

Even after the 2010 election, little is expected to change.

The FBR source said the election was not likely to be free and fair, pointing out that the new constitution the junta adopted after an apparently rigged referendum in 2008 virtually enshrined military power.

“However, having an election is better than not having one at all,” the source said.

Report from Compass Direct News 

AUSTRALIA: BUSHFIRES UPDATE – Sunday 15 February 2009


It has been over a week since the bushfires in Victoria took a turn for the worse. Bushfires had been burning in heatwave affected Victoria for some time previous to the conflagration that took place last Saturday, but it was on that day that they turned deadly.

A week since that deadly day and the death toll remains unclear, with 181 confirmed dead and some 120 people still missing, feared dead. Over 1800 homes have been destroyed, along with many other buildings including churches, schools, police stations and shops. The damage bill is expected to run into the billions of dollars.

Whatever way you look at it, this bushfire crisis is a major disaster and the worst to have ever come to Australia. All other disasters fade away in contrast to this.

The death toll breaks down to this:

Callignee Upper

1

Callignee

11

Koornalla

4

Hazelwood

4

Jeeralang

1

Mudgegonga

2

Eaglehawk

1

Humevale

6

Steels Creek

7

St Andrews

22

Arthurs Creek

3

Yarra Glen

1

Hazeldene

2

Taggerty

3

Marysville

15

Narbethong

9

Flowerdale

4

Heathcote Junction

1

Kinglake

35

Kinglake West

4

Strathewen

30

Wandong

4

Clonbinane

1

 

 

Others

10

 

 

Total

181

 

Thus far we know that some of the fires were started by lightening strikes and arsonists. It is now thought that at least one of the fires may have been started by poorly maintained electrical infrastructure near Kilmore East. A class action against the private contractor SP Ausnet (Singapore based) is being planned. Over 100 people died from a blaze in the Kilmore East area.

ABOVE: Another theft of a bushfire appeal collection tin

ELECTRIC CARS COMING SOONER RATHER THAN LATER


In great news for the environment and consumers it seems that ‘green cars’ will be arriving in Australia sooner rather than later, with infrastructure for electric cars to be set up in Brisbane, Sydney and Melbourne within four years. The project is a joint venture between AGL, Macquarie Capital and Better Place.

The project aims to set up recharge stations for electric cars at workplaces, homes and shopping centres. It is thought that some 250 000 recharge stations will be built in the project. Such projects have already been set up in Israel and Denmark.

Macquarie Capital is to raise $1 billion to build the recharging network, with AGL to supply renewable energy for the project. Better Place will actually build the network.

Should the project go ahead and the infrastructure be built, motorists will be able to dump petrol and diesel vehicles and move to electric ones. This will of course be a great relief from rising fuel costs and help protect the environment from further greenhouse gas emissions.

Ruddslide


The ‘Kevin 07’ campaign has been waged and won with victory for the ‘true believers.’ After 11 ½ years in opposition, the Australian Labor Party (ALP) has swept to victory in the Australian national election, with the former Prime Minister (John Howard) loosing his own seat in the process. Not only has Kevin Rudd and the ALP swept John Howard and the Liberal-National Party government from office, it has now also seen off the leadership of John Howard, Peter Costello and Mark Vaile, along with several other high ranking Coalition ministers.

In the wake of Kevin Rudd’s 6% swing against the Howard government, the Liberal and National Party Coalition is in disarray and will now need to rebuild following it’s decimation in Saturday’s national election. The Coalition has lost government, its leadership, many party MPs and will loose its Senate majority in July 2008.

Tony Abbott, Malcolm Turnbull and Brendan Nelson have all declared themselves as being contenders for leadership of the Liberal Party, and we are yet to hear who will stand for the National Party Leadership. Whoever does win leadership of the opposition parties, they face what is potentially a two-term opposition period (at least) given the extent of the Rudd victory.

Australians are now looking forward to the end of Workchoices and other draconian industrial relations legislation brought into being by the Howard government during their final term. There are also great hopes for the ratification of the Kyoto Protocol on CO2 emissions, as well as other climate change and environmental initiatives. Progress is also expected in many other key areas including health, education, refugees, social welfare, infrastructure, federal-state cooperation, defence policy and overseas intervention, etc.

The Australian electorate expects much from the new Rudd government and I for one do not expect that this trust will be in vain. Kevin Rudd is a man of great intellect, determination and action, and I think Australia will be delighted with his approach to government and leadership in the coming weeks and months.

Already Kevin Rudd has begun his role of leadership, along with deputy Julia Gillard, visiting a school today in order to get his education revolution under way immediately. He has also accepted an invitation to Bali in the next week or so to attend a conference on climate change and CO2 reduction targets. Already he has begun work on ratifying the Kyoto Protocol on Greenhouse Gas Emission Reduction Targets. This is a wonderful first fruit and a sign of what is hopefully to come.

Australia is a great nation, with a great economic track record in recent years ~ however, our reputation as being a compassionate and just people has suffered in recent times. I for one will welcome a return to a more just and socially responsible government and nation.