Sabrina Pit, Western Sydney UniversityYet again, large swathes of New South Wales are underwater. A week of solid rain has led to floods in the Mid-North Coast, Sydney and the Central Coast, with several areas being evacuated as I write.
As a resident of the NSW Far North Coast, which has had its share of devastating floods, many of the tense scenes on the news are sadly familiar.
Unless you have lived through it, it is hard to understand just how stressful a catastrophic flood can be in the moment of crisis. As research evidence shows, the long term impact on mental health can also be profound. And often it is the most disadvantaged populations that are hardest hit.
In many places, socio-economic disadvantage and flood risk go hand in hand.
In a study published last year, led by the University Centre for Rural Health in Lismore in close collaboration with the local community, colleagues and I looked at population data following Cyclone Debbie in 2017. We found people living in the Lismore town centre flood footprint experienced significantly higher levels of social vulnerability (when compared to the already highly vulnerable regional population). This study would not have been possible without the support of the Northern Rivers community who responded to the Community Recovery
after Flood survey, nor without the active support, enthusiasm and commitment of the Community Advisory Groups in Lismore and Murwillumbah and community organisations.
Notably, over 80% of people in the 2017 Lismore town centre flood-affected area were living in the lowest socio-economic neighbourhoods. The flood-affected areas of Murwillumbah and Lismore regions included 47% and 60% of residents in the most disadvantaged quintile neighbourhoods.
By examining data from the 45 and Up study, we also showed that participants living in the Lismore town centre flood footprint had significantly higher rates of smoking and alcohol consumption. They were also more likely to have pre-existing mental health conditions such as depression and anxiety, as well as poorer general health.
So even before disaster strikes, residents in flood-prone areas may be more likely to battle with financial and health issues. Our study showed disaster affected people also had the fewest resources to recover effectively. When floods arrive, the impact on mental health, in particular, can be acute.
A flood can be extremely stressful in the moment, as one rushes to protect people, property, pets and animals and worries about the damage that may follow. Can you imagine clinging to a rooftop in the rain in the middle of the night and waiting to be rescued?
The damage caused by floods causes enormous financial pain, and can lead to housing vulnerabilities and homelessness, especially for those without insurance — and research reveals a pattern of underinsurance in disadvantaged populations across Australia.
Even if you are lucky enough to have insurance, waiting to have your claim assessed and approved, then dealing with a shortage of tradies can take a real toll on your mental health. The waiting and the uncertainty can be especially hard.
Other flood research by colleagues and I, led by the University Centre for Rural Health, showed business owners whose homes and businesses had flooded were almost 6.5 times more likely to report depressive symptoms. Business owners with insurance disputes were four times more likely to report probable depression.
Flood affected business owners whose income didn’t return to normal within six months were also almost three times more likely to report symptoms of depression.
Lack of income can clearly cause stress for the individual, their family and their larger network. Small businesses play an important role in rural communities and employ a large number of people so the sustainability of local businesses is crucial.
We also found the higher the floodwater was in a person’s business, the more likely the person was to experience depressive symptoms.
People whose business had water above head height in their entire business were four times more likely to report depressive symptoms. Those who had water between knee and head height in their business were almost three times more likely to report probable depression. All this adds up to an increase in mental health issues that often follows a flood.
Six months after the flooding, business owners felt most supported by their local community such as volunteers and neighbours. However, those that felt their needs were not met by the state government and insurance companies were almost three times more likely to report symptoms of depression.
So, what can be done?
Firstly, we can boost preparedness. Risk and preparedness education may be especially needed for people who have recently moved to flood-prone regions. Many who have moved to regional areas recently may not be aware they live in a flood zone, or understand how fast waters can move and how high they can reach. Education is needed to raise awareness about the dangers. People may need help to prepare a flood plan and know when to leave.
Secondly, supporting people and local businesses after a disaster and assisting the local economy in its recovery could help reduce the mental health burden on people and the business community.
Thirdly, mental health services must be provided. A chaplaincy program was implemented in Lismore by the local government to assist business owners with emotional and psychological support after Cyclone Debbie and ensuing floods. This program was largely well received by business owners for having provided psychological support and raising mental health awareness.
However, the ongoing lack of mental health support remains an issue, especially in rural areas, and is exacerbated by disasters.
Fourthly, insurance disputes and rejection of insurance claims were among the strongest associations with likely depression in our research. We must find ways to improve the insurance process including making it more affordable, improving communication, by making claims easier and faster and boosting people’s understanding of what’s included and excluded from their policy.
No single organisation, government or department can solve these complex problems on their own. Strong partnerships between organisations are crucial and have been shown to work, as is direct and real-time support for flood-affected people.
This story was updated to add more detail about the author’s research funding, collaborative partners and affiliation. It is part of a series The Conversation is running on the nexus between disaster, disadvantage and resilience. You can read the rest of the stories here.
“The lie outlasts the liar,” writes historian Timothy Snyder, referring to outgoing president Donald Trump and his contribution to the “post-truth” era in the US.
Indeed, the mass rejection of reason that erupted in a political mob storming Capitol Hill mere weeks before the inauguration of Joe Biden tests our ability to comprehend contemporary American politics and its emerging forms of extremism.
Much has been written about Trump’s role in spreading misinformation and the media failures that enabled him. His contribution to fuelling extremism, flirting with the political fringe, supporting conspiracy theories and, most of all, Twitter demagogy created an environment in which he has been seen as an “accelerant” in his own right.
If the scale of international damage is yet to be calculated, there is something we can measure right now.
In September last year, the London-based Media Diversity Institute (MDI) asked us to design a research project that would systematically track the extent to which US-originated conspiracy theory group QAnon had spread to Europe.
We examined the role religion played in spreading conspiracy theories, the most common topics of tweets, and what social groups were most active in spreading QAnon ideas.
We focused on Twitter because its increasing use — some sources estimate 330 million people used Twitter monthly in 2020 — has made it a powerful political communication tool. It has given politicians such as Trump the opportunity to promote, facilitate and mobilise social groups on an unprecedented scale.
Using AI tools developed by data company Textgain, we analysed about half-a-million Twitter messages related to QAnon to identify major trends.
By observing how hashtags were combined in messages, we examined the network structure of QAnon users posting in English, German, French, Dutch, Italian and Spanish. Researchers identified about 3,000 different hashtags related to QAnon used by 1,250 Twitter profiles.
Every fourth QAnon tweet originated in the US (300). Far behind were tweets from other countries: Canada (30), Germany (25), Australia (20), the United Kingdom (20), the Netherlands (15), France (15), Italy (10), Spain (10) and others.
We examined QAnon profiles that share each other’s content, Trump tweets and YouTube videos, and found over 90% of these profiles shared the content of at least one other identified profile.
Seven main topics were identified: support for Trump, support for EU-based nationalism, support for QAnon, deep state conspiracies, coronavirus conspiracies, religious conspiracies and political extremism.
Hashtags rooted in US evangelicalism sometimes portrayed Trump as Jesus, as a superhero, or clad in medieval armour, with underlying Biblical references to a coming apocalypse in which he will defeat the forces of evil.
Overall, the coronavirus pandemic appears to function as an important conduit for all such messaging, with QAnon acting as a rallying flag for discontent among far-right European movements.
We used Textgain’s hate-speech detection tools to assess toxicity. Tweets written in English had a high level of antisemitism. In particular, they targeted public figures such as Jewish-American billionaire investor and philanthropist George Soros, or revived old conspiracies about secret Jewish plots for world domination. Soros was also a popular target in other languages.
We also found a highly polarised debate around the coronavirus public health measures employed in Germany, often using Third Reich rhetoric.
New language to express negative sentiments was coined and then adopted by others — in particular, pejorative terms for face masks and slurs directed at political leaders and others who wore masks.
Accompanying memes ridiculed political leaders, displaying them as alien reptilian overlords or antagonists from popular movies, such as Star Wars Sith Lords and the cyborg from The Terminator.
Most of the QAnon profiles tap into the same sources of information: Trump tweets, YouTube disinformation videos and each other’s tweets. It forms a mutually reinforcing confirmation bias — the tendency to search for, interpret, favour, and recall information that confirms prior beliefs or values.
Harvesting discontent has always been a powerful political tool. In a digital world this is more true than ever.
By mid 2020, Donald Trump had six times more followers on Twitter than when he was elected. Until he was suspended from the platform, his daily barrage of tweets found a ready audience in ultra-right groups in the US who helped his misinformation and inflammatory rhetoric jump the Atlantic to Europe.
Social media platforms have since attempted to reduce the spread of QAnon. In July 2020, Twitter suspended 7,000 QAnon-related accounts. In August, Facebook deleted over 790 groups and restricted the accounts of hundreds of others, along with thousands of Instagram accounts.
But further Textgain analysis of 50,000 QAnon tweets posted in December and January showed toxicity had almost doubled, including 750 tweets inciting political violence and 500 inciting violence against Jewish people.
Those tweets were being systematically removed by Twitter. But calls for violence ahead of the January 20 inauguration continued to proliferate, Trump’s QAnon supporters appearing as committed and vocal as ever.
The challenge for both the Biden administration and the social media platforms themselves is clear. But our analysis suggests any solution will require a coordinated international effort.
This article is part of a series examining the Coalition government’s record on key issues while in power and what Labor is promising if it wins the 2019 federal election.
Politicians often invoke the word “reform” to convey the significance, or gravitas, of a particular policy change they are proposing.
However, the tax policies implemented over the six years of the Abbott-Turnbull-Morrison government should be more aptly described as: no reform, lots of tinkering, two blunders and some lost opportunities.
To be fair to the leaders of the Coalition, both Abbott and Turnbull began their prime ministerships professing a large appetite for tax reform.
In opposition Abbott and his treasury spokesman Joe Hockey had promised a major inquiry. Hockey said it would pick up where Labor’s Henry Tax Review left off:
We thought the Henry Tax Review was going to be a proper process. Now, that has obviously been an abject failure. We’ve said – Tony Abbott announced
in Budget and reply speech – we will have a proper process for proper tax reform, and whatever comes out of that process, which will be a white paper, we will take to a subsequent election, seeking the mandate of the
Australian people – their approval.
It got as far as a discussion paper, seeking submissions.
When Turnbull assumed the leadership, the draft white paper, which would have followed the discussion paper, was scuttled, and the process ended.
Instead what resulted were marginal changes to personal income tax. One of the brackets was expanded and a new low and middle income tax offset was added.
Marginal changes to superannuation tax further added to the complexity of the tax system as a whole. The current superannuation system disproportionately rewards higher income earners because most contributions are taxed at the same low rate (15%) regardless of the taxpayers’ income tax rate.
The Coalition’s response was to apply a 30% tax on contributions for those earning $250,000 or more (down from the previous threshold of $300,000) and to cut the cap on concessional contributions from $30,000 ($35,000 for those aged 49 and over) to $25,000. And it capped at $1.6 million the amount that could be transferred into the “retirement phase” where fund earnings in retirement were exempt from tax.
It made the system much more complex, and it could have been done more simply, perhaps by reimposing tax on super earnings in retirement (at a low rate) or by taxing by contributions at a standard discount to taxpayers at a marginal rate, as recommended by the 2009 Henry Tax Review.
Alongside these marginal changes, there was also a failed attempt to cut the company tax rate (only the tax rates for small companies were cut) and a muddled discussion about the progressivity of the income tax system.
All in all, many a tinker, but no reform.
Human-induced climate change is compromising the sustainability of our planet. The only way to solve it is by changing incentives using the economic toolkit at our disposal. The Carbon Tax was a good tax. It shifted the costs of pollution onto those who created it, instead of subsidising processes that damaged the environment.
No solution to climate change is possible without corrective taxes.
At some point we’ll have to climb that mountain again, assuming the mountain is not underwater before politicians come to their senses.
The repeal of the Minerals Resource Rent Tax was also a step backwards. By taxing rents (excess profits) instead of profits, it avoided the disincentives created by traditional company taxes. And, it was a good example of the kind of taxes that could eventually replace or supplement company tax.
Changing the GST could have ensured at least one significant contribution to overall tax reform. At 10%, the rate is relatively low by international standards and applies to a shrinking share of spending, as more and more of our money is spent in places or on goods that aren’t taxed.
These factors, combined with the fact that GST is difficult to evade and less costly to administer, suggest that broadening the base is low hanging fruit on the tax reform tree, ripe for picking.
The failed debate on company tax cuts was another missed opportunity.
What remains is a system that applies different rates to different company sizes, one of few remaining dividend imputation systems in the world, and no discussion about the sustainability of corporate income tax revenue in the future.
All up, the government’s approach over the past six years has largely been piecemeal. It also managed to dismantle two of the most significant tax reforms that could have contributed to a more sustainable tax base in the long run.
It remains to be seen whether a Labor government will be able to achieve more. Some of the party’s proposed changes, such as the treatment of capital gains, head in the right direction, but what it is offering falls short of comprehensive reform.
At the same time, many of its proposed changes will add additional complexity, fail to account for interactions within the entire tax system and use tax exemptions to reach goals that could be better achieved with payments.
Many an international tax reform was engendered by crisis, so there’s hope, of a sort. The opportunity still remains to get in early before weaknesses inherent in the current system become grossly apparent.
What we’ve got is unfair and its complexity rewards those with the resources to pay to understand and exploit it. It is overly reliant on income and company tax in place of indirect taxes, like consumption tax, and it tries to achieve too many disparate objectives, without consideration for the workings of the family and social security payments system.
There is much scope to improve things. What we need most are fearless leaders, from all sides of the political spectrum, who treat comprehensive tax reform as important and can work together to achieve it.
Robert Breunig, Professor of Economics and Director, Tax and Transfer Policy Institute, Crawford School of Public Policy, Australian National University and Kristen Sobeck, Senior Research Officer, Crawford School of Public Policy, Australian National University
This article is part of a series examining the Coalition government’s record on key issues while in power and what Labor is promising if it wins the 2019 federal election.
When the “mighty Roman” Gough Whitlam died, Indigenous leader Noel Pearson delivered a memorable eulogy. Channelling Monty Python, Pearson asked what had Whitlam ever done for Australia? Pearson then reeled off a long list of achievements, including Medibank, no-fault divorce, needs-based schools funding, the Racial Discrimination Act and many more. This was a blistering set of reforms by a truly radical and activist government.
After close to four years of the Turnbull and Morrison Coalition government, we might well ask: “What has the Coalition done for us?”
It is hard to think of a single notable achievement for which the government will be credited or remembered. If we take another government as ideologically driven as Whitlam’s – albeit from a different vantage point – in this case John Howard’s, we can still recall a significant range of policies and changes. Chief among these was gun control.
In contrast, we are hardly likely to remember the Turnbull-Morrison governments.
In 2016, if we vaguely recall, there was a double-dissolution election – but could many voters even remember why? Ah, the trigger was the ill-fated Australian Building and Construction Commission, which did not even feature during the election campaign.
Since then, what have been the major policy achievements?
The National Energy Guarantee? If the government is likely to be remembered at all, it will be for the deep-seated divisions that meant Malcolm Turnbull was entirely unable to deliver a clear and coherent energy and climate policy. This was, after all, a government that chose to ignore Chief Scientist Alan Finkel’s call for a Clean Energy Target.
Tony Abbott’s reversal on withdrawing from the Paris Climate Agreement (under Turnbull), but then arguing Australia should stay in (especially with Angus Taylor’s masterful handling of the data on emissions) reflected a policy agenda dogged by internal divisions and incoherence.
Scott Morrison’s major contribution to the debate was to bring a piece of coal into the parliament.
Perhaps immigration? Turnbull was forced to rescue a deal initially brokered with the Obama administration, after new President Donald Trump mocked the deal as “stupid”. With the government wedded to a “tough” border policy, including re-opening the detention facility on Christmas Island, it even lost the vote on “medevac” legislation to ensure medical treatment for suffering refugees.
Any lasting achievements that seem to have happened were only because the government was either forced to, or reluctantly accepted it needed to, make changes. On the banking royal commission, Morrison – a political leader resolutely wedded to remain on the wrong side of history – had initially described it as a “populist whinge”. Any systemic changes to the banking sector will emerge, in spite of, rather than because of the government’s actions.
Turnbull will point to legislating for same-sex marriage as one of his government’s signature policy achievements, following the plebiscite. Yet Morrison will hardly be trumpeting this achievement, given that he voted against it.
Yes, same-sex marriage should be a lasting and welcome change, but again, the Coalition did much to resist it.
In stark contrast, German Chancellor Angela Merkel enabled a parliamentary vote but then voted against it – a more principled position than the unnecessary plebiscite. This was a government that consistently showed it was behind public opinion on a range of issues.
There is a case that underneath the general political and policy mess of the Turnbull-Morrison era, the government notched up some quiet achievements. These include a free-trade deal with Indonesia, entering the fourth phase of the bipartisan national plan to reduce family violence, and trying to embed the Gonski 2.0 schools funding.
Many public servants across a range of portfolios were busily, professionally carrying out a range of important policies and programs out of the media glare. This reflects a long-standing view of government as policy incrementalism – carrying out the everyday, important, but unglamorous work of running the country.
Perhaps the greatest missed opportunity of the Turnbull-Morrison era has been a consistent failure to adequately represent the concerns and issues of the centre-right of Australian politics. Neither Turnbull or Morrison understood the promise of Burkean conservatism or even John Stuart Mill’s liberalism.
Worse still, in the case of the Nationals, there was an almost wilful inability to offer a coherent and reasoned case on behalf of regional Australia. As Coalition MPs scratch their heads and wonder where it all went so horribly wrong, they might well look at South Australia and now New South Wales to remind themselves what a “liberal” government looks like.
Indeed, if we needed a lasting image of the Nationals’ mishandling of the water portfolio, then the dead fish of the Menindee will suffice.
As Scott Morrison most likely exits the prime ministership, a different kind of Roman to Whitlam, his only comfort might be that he is not Theresa May.
This article is part of the Revolutions and Counter Revolutions series, curated by Democracy Futures as a joint global initiative between the Sydney Democracy Network and The Conversation. The project aims to stimulate fresh thinking about the many challenges facing democracies in the 21st century.
With Iran’s ruling clergy already preparing to celebrate the 40th anniversary of the 1979 Islamic Revolution, it may be too late to question whether or not the revolution was in fact Islamic. What we can do, at least, is explore the revolution’s degree of Islamicness.
In Iran, like elsewhere in the world, often competing utopian political visions shaped the political landscape of the previous century. Marxism, nationalism and liberalism all played important roles in the 1979 revolution. Yet it was later branded “Islamic” with such insistence that this eventually became its sole adjective.
Most Iranians were religious, which positioned the clergy far ahead of any other political group in being able to mobilise the masses. The clergy benefited enormously from their highly effective religious network, which was both far reaching and fully under their control. By that time, the Pahlavi regime had severely weakened the organising capacities of Iran’s other political groups.
After claiming a dominant post-revolution position, the clergy under then Supreme Leader Ayatollah Khomeini exploited their irreproachable reputation and religious bond with the masses to eliminate their rivals and consolidate their power. They converted Iran’s religious networks into permanent political platforms.
Mosques and other religious spaces and occasions were at the forefront of their propaganda machinery. Mosques were also – and still are – used as polling stations during elections.
The ruling clergy coupled the term “Islamic” with the revolution, calling it a “regime of truth”, to use Foucault’s terminology. More importantly, they impeded the emergence of a non-religious alternative to their peculiar political system. Over the past 39 years, no secular political group has been able to mount a formidable challenge to the Islamic Republic.
Instead, other religious forces have challenged the ruling clergy. They have done so both on the level of practical politics and by way of introducing viable alternatives to the ideal of the Islamic state.
The impetus for Iran’s most significant periods of political unrest in recent decades can be traced to the Islamic reformists. Examples include the reformist movement from 1997 until 2005, and the Green Movement, which emerged after the disputed 2009 elections.
The Green Movement brought the regime to the brink of collapse, and its religious ties were undeniable. Its leaders, Mir Hussin Mousavi and Mehdi Karubi – who are still under house arrest – are both religious figures who have always aligned with the Islamists. The colour green is a religious symbol, hence the name of the movement.
A new politico-religious discourse is emerging that offers a viable alternative to the Islamic Republic. The Green Movement must still be understood within the broader “Islamist” school of thought, as it promotes a political role for religion. It is, however, unique in that it envisions this role as part of a democratic polity.
The reformist movement amounts to a direct backlash against the ideal of the Islamic state. It targets the foundational pillars of the Shiʿi model of the state, which is based upon Khomeini’s doctrine of wilāyat-i faqīh.
The reformists intend to strip away the ruling clergy’s proclaimed religious legitimacy. They maintain that Islam does not specify a blueprint for political matters and explicitly avoids providing economic, political, or policy prescriptions. The Qurʾān and many Ḥadīths support the notion that humans have the capacity to determine appropriate solutions for their worldly problems.
Thus, reformists argue that Islam should be actualised in politics through the political contributions of believers rather than the political leadership of the clergy.
Islam does not stipulate a model political system. This makes it impossible to extract the notion of democratic government from Islamic teachings.
However, one could argue that democracy is an appropriate political system for the Muslim world, based on human reasoning. For example, Mohsen Kadivar asserts:
Democracy is the least erroneous approach to the politics of the world. (Please note that least erroneous does not mean perfect, or even error free.) Democracy is a product of reason, and the fact that it has first been put to use in the West does not preclude its utility in other cultures – reason extends beyond the geographical boundaries. One must adopt a correct approach, regardless of who came up with the idea.
The religious backlash has been particularly focused on refuting two interconnected claims that form the existential grounding of the Islamic state. These are the claims of divine sovereignty and the necessity of implementing Sharīʿa, or Islamic law.
Iran’s ruling clergy argue that the divine right to political leadership rests not only with the Prophet Mohammad and Shiʿi’s Infallible Imāms, but also with Islamic jurists in today’s world. According to Khomeini:
God has conferred upon government in the present age the same powers and authority that were held by the Most Noble Messenger and the Imāms, with respect to equipping and mobilising armies, appointing governors and officials, and levying taxes and expending them for the welfare of the Muslims. Now, however, it is no longer a question of a particular person; government devolves instead upon one who possesses the qualities of knowledge and justice.
This assertion could be questioned on various levels. First and foremost, it offers a problematic reading of Islamic history. It ignores the reality that the Prophet Mohammad’s governance was a historical occurrence as opposed to a part of his divine mission.
In the same vein, many Iranian religious reformists repudiate the divine source of political authority, not only in the present, but also for the Prophet and Infallible Imāms. These interpretations of the revolution reject the possibility of claiming any sort of divinity in the political realm. This empowers believers to manage their political lives based on their collective rational reasoning.
The second major claim is that Islam is a political religion because Sharīʿa law encompasses important socio-political dimensions. Its proponents maintain that Sharīʿa ought to be implemented to its full extent, thus requiring political leadership by the clergy.
This was a founding maxim of Khomeini’s doctrine of wilāyat-i faqīh. But he revised this when he began running a modern state.
Soon after the revolution, Khomeini realised that implementing the many components of Sharīʿa would interfere with the basic tasks of government. In other words, he concluded that full compliance with Sharīʿa law would make it impossible for a state to effectively carry out its core functions and responsibilities.
His response to this predicament was to prioritise political interests over religious considerations. He went so far as to declare Sharīʿa as secondary to governing:
A government in the form of the God-given, absolute mandate was the most important of the divine commandments and has priority over all derivative divine commandments … [it is] one of the primary commandments of Islam and has priority over all derivative commandments, even over prayer, fasting and pilgrimage to Mecca.
This was conceptualised as a Shiʿi jurisprudential principle called Fiqh al-maṣlaḥa (expediency-based jurisprudence). It establishes that a state is regarded as Islamic if the head of state is a jurist, a walī-yi faqīh, regardless of whether the state enforces Sharīʿa and Islamic precepts.
Expediency-based jurisprudence leaves the fate of Sharīʿa ordinances, and by extension the entire religion of Islam, to the “personal” understanding of the ruling jurist. Unsurprisingly, it has been challenged for exploiting religion.
Critics say that decisions based on a rational assessment of the circumstances should not be tagged as “Islamic”. Attaching a religious tag to decisions made by the absolute authority of one person, who is not immune to mistakes and failures, will render religion responsible for policy mistakes and failures.
Ultimately, the lived experience of the government born out of the 1979 revolution proved detrimental to Islam. It led to the disillusionment of some Islamists who wished to emancipate religion from the state. As such, reformist discourse failed to propose a tangible alternative to the model of the Islamic state. This, in turn, could partially explain the resilience of the Islamic state in Iran.
Nevertheless, we should not overlook the powerful role of religious backlash in disarming the ruling clergy and delegitimising the theological foundation of the Islamic state. It remains the most formidable challenge to Iran’s ruling clergy to date.
Still, the possibility of a major shift in the country’s political landscape is more complicated and depends on factors far beyond religion-state relations.
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 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.
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.
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.
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.
The link below is to an article that takes a look at the death of Fred Phelps and his twisted legacy.