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.

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Westboro Baptist Church: Fred Phelps is Dead


The link below is to an article that takes a look at the death of Fred Phelps and his twisted legacy.

For more visit:
http://www.albertmohler.com/2014/03/21/fred-phelps-and-the-anti-gospel-of-hate-a-necessary-word/

Chinese pastor, wife slain at church served by Lottie Moon


A Chinese pastor and his wife were slain Aug. 31 at Penglai Christian Church, where Lottie Moon, an icon of Southern Baptist mission work, served in the early 1900s in Penglai, China, reports Baptist Press.

Pastor Qin Jia Ye and his wife Hong En He, both in their 80s, were killed in the church’s office on Wednesday.

The suspect — a 40-year-old former church member — was arrested within an hour of the early morning incident.

The couple’s violent death is a shock to many, both in China and the United States. The church was closed for 49 years after communists came to power at the end of World War II, reopening in 1988 with only 20 people.

Qin reported 300 baptisms several years in a row. Today, there are 3,600 members.

Chinese newspaper accounts state that the suspect entered the church office carrying an axe and struck the pastor and his wife, killing them both.

The church eventually outgrew Moon’s original structure and built a modern 1,500-seat sanctuary next to it with the help of Johnson Ferry Baptist Church in Marietta, Ga.

"From the moment I met Pastor Qin, I could sense a Christ-like spirit," said Bryant Wright, Johnson Ferry senior pastor and current Southern Baptist Convention president. "We are incredibly saddened by this tragic event, but we know one of the Lord’s faithful servants is with Him forever in Heaven."

Qin graciously acted as tour guide for a large number of Southern Baptist leaders passing through Penglai who wanted to connect with the community where Moon served.

Wanda S. Lee, executive director-treasurer of Woman’s Missionary Union, visited the church during a 1997 China tour. In spite of numerous church responsibilities, Qin and his wife welcomed the group warmly, Lee said, and it was obvious they were well-loved and respected.

"We are deeply grieved at the news of [the] death" of Qin and his wife, Lee said. "It is a great loss to the Christian community."

Candace McIntosh, executive director of Alabama WMU, took seven college students to China in 2008 to experience firsthand the history and work of Southern Baptists. Penglai Christian Church was a stop on the tour.

McIntosh remembers admiring Qin’s humble and quiet strength as he prepared for worship, as well as his ability to state the message clearly for all to understand. After the service, Qin spent a great deal of time talking with the team of young women about Moon’s legacy.

"He was so encouraged that younger women were there, learning about the history of Lottie Moon and the Chinese church," McIntosh recalled. "I know the legacy of Lottie Moon will live on, but one of its greatest communicators is no longer with us. I know Qin’s legacy will live on, too."

Report from the Christian Telegraph

Scholars: John Calvin was America’s ‘Founding Father’


More than a thousand attendees are expected to gather for a four-day conference to celebrate John Calvin’s 500th birthday, reports Michael Ireland, chief correspondent, ASSIST News Service.

As America prepares to celebrate Independence Day this July 4, Vision Forum Ministries will be hosting the national celebration to honor the 500th birthday of John Calvin, a man who many scholars recognize as America’s “Founding Father.”

The event — The Reformation 500 Celebration — will take place July 1-4 at the Park Plaza Hotel in downtown Boston, according to a media release about the event.

“Long before America declared its independence, John Calvin declared and defended principles that birthed liberty in the modern world,” noted Doug Phillips, president of Vision Forum Ministries.

“Scholars both critical and sympathetic of the life and theology of Calvin agree on one thing: that this reformer from Geneva was the father of modern liberty as well as the intellectual founding father of America,” he said.

Phillips pointed out: “Jean Jacques Rousseau, a fellow Genevan who was no friend to Christianity, observed: ‘Those who consider Calvin only as a theologian fail to recognize the breadth of his genius. The editing of our wise laws, in which he had a large share, does him as much credit as his Institutes. . . . [S]o long as the love of country and liberty is not extinct amongst us, the memory of this great man will be held in reverence.'”

He continued: “German historian Leopold von Ranke observed that ‘Calvin was virtually the founder of America.’ Harvard historian George Bancroft was no less direct with this remark: ‘He who will not honor the memory and respect the influence of Calvin knows but little of the origin of American liberty.’

“John Adams, America’s second president, agreed with this sentiment and issued this pointed charge: ‘Let not Geneva be forgotten or despised. Religious liberty owes it much respect.’

“As we celebrate America’s Independence this July 4, we would do well to heed John Adams’ admonition and show due respect to the memory of John Calvin whose 500th birthday fall six days later,” Phillips stated.

Calvin, a convert to Reformation Christianity born in Noyon, France, on July 10, 1509, is best known for his influence on the city of Geneva, the media release explains.

“It was there that he modeled many of the principles of liberty later embraced by America’s Founders, including anti-statism, the belief in transcendent principles of law as the foundation of an ethical legal system, free market economics, decentralized authority, an educated citizenry as a safeguard against tyranny, and republican representative government which was accountable to the people and a higher law,” the release states.

The Reformation 500 Celebration will honor Calvin’s legacy, along with other key Protestant reformers, and will feature more than thirty history messages on the impact of the Reformation, Faith & Freedom mini-tours of historic Boston, and a Children’s Parade.

The festivities will climax on America’s Independence Day as attendees join thousands of others for the world-renowned music and fireworks celebration on the Esplanade with the Boston Pops Orchestra.

Report from the Christian Telegraph