Privatising WestConnex is the biggest waste of public funds for corporate gain in Australian history



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Gladys Berejiklian’s government will pay for much of WestConnex construction, give away other toll roads, guarantee annual toll increases and force motorists to use the toll road.
AAP Image/Joel Carrett

Christopher Standen, University of Sydney

The NSW government has confirmed it will sell 51% of WestConnex — the nation’s biggest road infrastructure project — to a consortium led by Transurban, the nation’s biggest toll road corporation.

NSW treasurer Dominic Perrottet described the A$9.3 billion sale to one of his party’s more generous donors as a “very strong result”.

I would describe it differently: the biggest misuse of public funds for corporate gain in Australia’s history.

Let’s examine how much public funding has been or will be sunk into WestConnex, a 33km toll road linking western Sydney with southwestern Sydney via the inner west.

Privatising Westconnex will return the NSW government 30 cents for every dollar of public money spent.
WestConnex Business Case Executive Summary

To date, the NSW and federal governments have provided grants of about $6 billion. Much of this was raised through selling revenue-generating public assets, including NSW’s electricity network.

Hiding privatisation by stealth

As well, the NSW government is bundling three publicly owned motorways into the sale: the M4 (between Parramatta and Homebush), the M5 East and the M5 Southwest (from 2026). Together, Credit Suisse values these public assets at A$9.2 billion. The government is privatising them by stealth. Leaked NSW cabinet documents suggest the Sydney Harbour Bridge will be next.

Then there is the A$1.5 billion bill for property acquisitions and the millions spent on planning, advertising, consultants, lawyers and bankers.

The government is funding extra road works to help prop up WestConnex toll revenue. It will increase the capacity of road corridors feeding into the interchanges. But it will reduce the number of traffic lanes on roads competing with WestConnex, such as Parramatta Road.




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Modelling for major road projects is at odds with driver behaviour


It will also pick up the bill for building a A$2.6 billion airport connection and the complex underground interchange at Rozelle. It will even pay compensation if the latter is not completed on schedule.

To further bolster toll revenue, NSW premier Gladys Berejiklian introduced a vehicle registration cashback scheme for toll-road users.

Her government has also committed to continuing the M5 Southwest toll cashback scheme. The cost of these incentives to the public purse is likely to exceed A$2 billion every ten years.

In total, I estimate the NSW government is pumping more than A$23 billion worth of cash, public assets, enabling works and incentives into WestConnex — though efforts to shield the scheme from public scrutiny mean the figure could be much higher.

Finally, as part of the deal with Transurban, the government has agreed to plough A$5.3 billion of the sale proceeds back into WestConnex. It’s recouping just A$4 billion by selling majority ownership.

This translates to a financial return of 34 cents for every dollar spent.

Government expenses and receipts.

Of course, governments don’t always spend our money with the intention of making a profit. Usually there are broader social benefits that justify the expenditure. However, past experience shows inner-city motorways do more harm than good — which is why many cities around the world are demolishing them.

Given its proximity to residential areas, WestConnex will have serious impacts on Sydney’s population. Construction is already destroying communities, harming people’s health and disrupting sleep and travel — with years more to come.

Motorists who cannot afford the new tolls on the M4 ($2,300 a year) and M5 East ($3,100 a year) will have to switch to congested suburban roads. This will mean longer journey times — especially with the removal of traffic lanes on Parramatta Road.

New tolls on existing motorways.

Those who do opt to pay the new tolls may enjoy faster journeys for a few years — until the motorways fill up again.

Costs outweigh the benefits

But this benefit will be largely cancelled out by the tolls they have to pay — with low-income households in western Sydney bearing much of the pain. As such, the ultimate beneficiary will be a corporation that pays no company tax and employs very few people.

Traffic and congestion on roads around the interchanges will increase significantly. Moreover, with tolls for trucks three times those for cars, we can expect to see them switching to suburban and residential streets — especially between peak hours and at night.

The extra traffic created by WestConnex will lead to more road trauma, traffic noise and air pollution across the Sydney metropolitan area. With unfiltered smokestacks being built next to homes and schools, more people may be at risk of heart disease, lung disease and cancer in years to come.




Read more:
Big road projects don’t really save time or boost productivity


On any measure, the WestConnex sale is not in the public interest. The billions of dollars ploughed into the scheme would have been better spent on worthwhile infrastructure or services that improve people’s lives.

Is the WestConnex acquisition a good deal for Transurban? A$9.3 billion may sound like a high price, given the past financial collapses of other Australian toll roads.

However, with the Berejiklian government agreeing to fund most of the remaining construction, giving away the M4 and M5, guaranteeing annual toll increases of at least 4%, and bending over backwards to force motorists under the toll gantries, it can only be described as a “very strong result” for the consortium, though not for taxpayers.The Conversation

Christopher Standen, Transport Analyst, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Why the ABC, and the public that trusts it, must stand firm against threats to its editorial independence



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Author Tom Keneally, actress Magda Szubanski and journalist Kerry O’Brien are among the ABC’s high-profile supporters.
AAP/Jeremy Ng

Denis Muller, University of Melbourne

The people who are turning up at Save the ABC rallies around the country are defending a cultural institution they value because they trust it.

In particular, they trust its news service. Public opinion polls going back to the 1950s consistently show it is by far the most trusted in the country.

So at this time it is pertinent to look at what creates a trustworthy news service. The cornerstone is editorial independence. As opinion polls have shown time and again, where people suspect a newspaper, radio, TV or online news service of pushing some commercial or political interest, their level of trust falls.

Editorial independence does not mean giving journalists licence to broadcast or publish whatever they want or to avoid accountability for their mistakes.

It means encouraging journalists to tackle important stories regardless of what people in power might think, then backing them to make judgments based on news values and the public interest, not on irrelevant considerations such as commercial, financial or political pressure.




Read more:
Constant attacks on the ABC will come back to haunt the Coalition government


Editorial independence is hard won and under constant pressure from outside the newsroom.

In commercial media, this pressure comes from big advertisers or company bosses with financial or political interests to push.

In public-sector broadcasting, the pressure comes from the federal government, which provides the funding and has powerful means of subjecting the broadcaster to intense political pressure.

A robust editorial leadership is essential to resisting this heat. It’s a daily battle. If the senior editorial management wilts, the weakness is swiftly transmitted down the hierarchy.

Middle-level editors and the staff journalists who work to them start looking over their shoulders, tempted to take easy options and avoid possible heat. The easiest option is self-censorship, dodging sensitive stories, leaving out material or watering it down.

This is where the ABC is at a crossroads. It has as its managing director and editor-in-chief Michelle Guthrie, a person with no journalistic background and who until recently showed scant signs of understanding the impact on the ABC’s editorial independence of the Turnbull government’s relentless bullying.

Then last month she gave a speech at the Melbourne Press Club in which she said Australians regard the ABC as a great national institution and deeply resent it being used as “a punching bag by narrow political, commercial or ideological interests”.

It was a start, and now the cause has been taken up by ABC staff themselves and by the wider public in the Save the ABC movement led by ABC Friends.

It is strongly reminiscent of events at The Age nearly 30 years ago, when I was an associate editor there. Then, a Save The Age campaign showed how effective a public outpouring of support for a news outlet can be when they set out to defend one they trust.

The campaign’s origins lay in concerns among senior journalists at the paper over what might happen to its editorial independence when receivers were appointed in 1990. This followed a disastrous attempt by “young” Warwick Fairfax to privatise the Fairfax company, which was the paper’s owner.

A group of senior journalists, including the late David Wilson and the distinguished business writer Stephen Bartholomeusz, formed The Age Independence Committee. It drew up a charter of editorial independence.

The key passages stated that:

  • the proprietors acknowledge that journalists, artists and photographers must record the affairs of the city, state, nation and the world fairly, fully and regardless of any commercial, political or personal interests, including those of any proprietors, shareholders or board members

  • full editorial control of the newspaper, within a negotiated, fixed budget, is vested in the editor

  • the editor alone decides the editorial content, and controls the hiring, firing and deployment of editorial staff.

The Save The Age campaign generated tremendous public support. Former prime ministers Malcolm Fraser and Gough Whitlam, who had barely been on speaking terms since the Dismissal 15 years earlier, joined together at the head of a public demonstration in Melbourne’s Treasury Gardens. One of the campaign slogans was “Maintain Your Age”, a pun on Whitlam’s post-Dismissal election slogan, “Maintain Your Rage”.




Read more:
The politics behind the competitive neutrality inquiry into ABC and SBS


Eventually, the receivers signed the charter and so, after some wrangling, did the new owners led by the Canadian-born newspaper baron, Conrad Black. Black is gone but the charter remains.

Like The Age in 1990, the ABC today has strong public support.

Like The Age in 1990, senior journalistic staff, most notably the Melbourne “Mornings” radio presenter Jon Faine, and former presenter of 7.30 on ABC TV, Kerry O’Brien, have shown leadership, lending their profile and authority to the cause.

But unlike The Age, the ABC does not have publicly acknowledged bipartisan political support.

Whatever Malcolm Turnbull’s private views of the ABC, and whatever the stated policy of his government, the facts are that since 2014 the Abbott and Turnbull governments have cut $338 million from the ABC’s funding, and the federal council of the Liberal Party voted last month to sell it off.

It is quite possible that when it reports in September, the present inquiry into the ABC’s competitive neutrality will provide some impetus to this proposition or propose some other ways to clip the ABC’s wings.

It is significant in the context of editorial independence that the inquiry is taking a particular interest in the ABC news service. That is the part of the ABC most detested by politicians, and on which the present government has focused its most intense pressure.

The ConversationIf editorial independence weakens, public trust will weaken too. That would make the ABC an even more attractive political target for a hostile government.

Denis Muller, Senior Research Fellow in the Centre for Advancing Journalism, University of Melbourne

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

The public has a vital role to play in preventing future cyber attacks



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Numerous cyber attacks in recent years have targeted common household devices, such as routers.
Shutterstock

Sandeep Gopalan, Deakin University

Up to 400 Australian organisations may have been snared in a massive hacking incident detailed today. The attack, allegedly engineered by the Russian government, targeted millions of government and private sector machines globally via devices such as routers, switches, and firewalls.

This follows a cyber attack orchestrated by Iranian hackers revealed last month, which targeted Australian universities.




Read more:
Explainer: how internet routers work and why you should keep them secure


A joint warning by the US and UK governments stated that the purpose of the most recent attack was to:

… support espionage, extract intellectual property, maintain persistent access to victim networks, and potentially lay a foundation for future offensive operations.

The Russians’ modus operandi was to target end-of-life devices and those without encryption or authentication, thereby compromising routers and network infrastructure. In doing so, they secured legitimate credentials from individuals and organisations with weak password protections in order to take control of the infrastructure.

Cyber attacks are key to modern conflict

This is not the first instance of Russian aggression.

The US city of Atlanta last month was crippled by a cyber attack and many of its systems are yet to recover – including the court system. In that case, attackers used the SamSam ransomware, which also uses network infrastructure to infiltrate IT systems, and demanded a ransom payment in Bitcoin.

Baltimore was hit by a cyber attack on March 28 that disrupted its emergency 911 calling system. Russian hackers are suspected to have taken down the French TV station TV5Monde in 2015. The US Department of State was hacked in 2015 – and Ukraine’s power grid and military infrastructure were also compromised in separate attacks in 2015 and 2017.

But Russia is not alone in committing these attacks.

In December 2017, North Korean hackers were blamed for the WannaCry attack that infected over 300,000 computers in 150 countries, affecting hospitals and banks. The UK’s National Health Service was particularly bruised and patients had to be turned away from surgical procedures and appointments.

Iran has conducted cyber attacks against numerous targets in the US, Israel, UAE, and other countries. In turn, Iran was subjected to a cyber attack on April 7 that saw computer screens display the US flag with the warning “don’t mess with our elections”.

Prosecuting hackers is ineffective

The US government has launched prosecutions against hackers – most recently against nine Iranians for the cyber attacks on universities. However, prosecutions are of limited efficacy when hackers are beyond the reach of US law enforcement and unlikely to be surrendered by their home countries.

As I have written previously, countries such as Australia and the US cannot watch passively as rogue states conduct cyber attacks against targets within our jurisdiction.




Read more:
Is counter-attack justified against a state-sponsored cyber attack? It’s a legal grey area


Strong countermeasures must be taken in self defence against the perpetrators wherever they are located. If necessary, self defence must be preemptive – any potential perpetrators must be crippled before they are able to launch strikes on organisations here.

Reactive measures are a weak deterrent, and our response should include a first strike cyber attack option where there is credible intelligence about imminent attacks. Notably, the UK has threatened to use conventional military strikes against cyber attacks. This may be an overreaction at this time.

Educating the public is essential

Numerous cyber attacks in recent years – including the current attack – have targeted common household devices, such as routers. As a result, the security of public infrastructure relies to some extent on the security practices of everyday Australians.

So, what role should the government play in ensuring Australians are securing their devices?

Unfortunately, cybersecurity isn’t as simple as administering an annual flu shot. It’s not feasible for the government to issue cybersecurity software to residents since security patches are likely to be out-of-date before the next attack.

But the government should play a role in educating the public about cyber attacks and securing public internet services.

The city of New York has provided a free app to all residents called NYC Secure that is aimed at educating people. It is also adding another layer of security to its free wifi services to protect users from downloading malicious software or accessing phishing websites. And the city of Jonesboro, Georgia is putting up a firewall to secure its services.




Read more:
Artificial intelligence cyber attacks are coming – but what does that mean?


Australian city administrations must adopt similar strategies alongside a sustained public education effort. A vigilant public is a necessary component in our collective security strategy against cyber attacks.

This cannot be achieved without significant investment. In addition to education campaigns, private organisations – banks, universities, online sellers, large employers – must be leveraged into ensuring their constituents do not enable attacks through end-of-life devices, unsupported software, poor password protection policies and lack of encryption.

Governments must also prioritise investment in their own IT and human resources infrastructure. Public sector IT talent has always lagged the private sector due to pay imbalances, and other structural reasons.

It is difficult for governments to attain parity of technical capabilities with Russian or North Korean hackers in the short term. The only solution is a strong partnership – in research, detection tools, and counter-response strategies – with the private sector.

The ConversationThe Atlanta attack illustrates the perils of inaction – an audit report shows the city was warned months in advance but did nothing. Australian cities must not make the same mistake.

Sandeep Gopalan, Pro Vice-Chancellor (Academic Innovation) & Professor of Law, Deakin University

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

A public broadcaster that bows to political pressure isn’t doing its job



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The ABC’s independence is a global concern.
AAP/Joel Carrett

Johan Lidberg, Monash University

The ABC’s chief economics correspondent, Emma Alberici, did her job the other day. She wrote a well-researched analysis piece investigating whether the Turnbull government’s proposed company tax cuts would grow the economy and break Australia’s wages deadlock.

Alberici’s article came in for a lot of criticism from the Turnbull government for its one-sidedness and lack of balance. Later, the ABC took down the article from its website.

If you read her piece, you’ll see that, yes, she could have included more voices, and yes, the case for company tax cuts was forcefully argued against. But the argument and analysis was built on sound research, as Saul Eslake (one of Australia’s most senior and respected independent economists, who was quoted in Alberici’s story) has pointed out.

So, why on earth did ABC take the article down?

Part of the answer to this lies in the very editorial policies that are supposed to safeguard the ABC’s independence. The current wording of these polices function as a straitjacket on ABC journalists and make it hard for them to toe the line between analysis and opinion.

And that in turn makes the ABC look less independent.

High level of trust

One of the ABC’s greatest assets is the high public trust it enjoys compared to many of its commercial media competitors.

That trust is to a large extent built on the broadcaster maintaining and defending its independence from commercial, political and any other societal interests.

There are a lot of misconceptions regarding what a public broadcaster is. But one thing it is not is a government or state broadcaster.

There are certainly examples of some public broadcasters that are. One prominent recent case was when the Polish government in practice took control of the country’s public broadcaster and turned it into a government mouthpiece.

A serious case of self-doubt

The ABC Act and the ABC Charter are the safeguards of ABC’s independence from the government of the day. This independence was challenged to unprecedented levels by the Abbott government a few years ago.




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Crude tone of attacks is new, but softening up the ABC for cuts isn’t


A new major challenge to the ABC’s independence is the current change, driven by One Nation, to the ABC Charter requiring it to be “fair” and “balanced” in its reporting. If you recognise these terms, that’s because it used to be Fox News’ catchphrase.




Read more:
How the government and One Nation may use media reforms to clip the ABC’s wings


The ABC is not turning into the Polish Broadcasting Corporation, but it has clearly lost a lot of confidence lately. In Alberici’s case, it appears it bowed to government pressure when it should have stood its ground.

But getting heat from the government of the day (regardless of the particular side of politics) is an indication that a public broadcaster is doing its most important job (provided you get your facts right): holding power to account. If you bow to political pressure, you’re not doing your job.

A public broadcaster with a confidence problem is a serious issue for political and democratic wellbeing.

Globally, there are between ten and 15 properly funded public broadcasters (depending on what level of funding you define as proper) with enough funding and safeguards to be able to call themselves editorially independent. This means there are only ten to 15 large repositories of in-depth public interest journalism – globally.

The ConversationSo, the case is strong for the Australian public to get behind the ABC and ask it to snap out of its crisis of confidence. Then it can get on with the job of keeping power to account – just like Alberici tried to do.

Johan Lidberg, Associate Professor, School of Media, Film and Journalism, Monash University

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

In whose best interests? Sam Dastyari and the politics of public intelligence


Melanie Brand, Monash University

The revelations that Senator Sam Dastyari warned a Chinese Communist Party-linked Labor donor that his phone was likely tapped by intelligence agencies are certainly newsworthy and in the public interest.

The Turnbull government has since flagged a raft of new intelligence laws. The legislation, to be introduced into parliament this week, will reportedly include:

  • banning Australian political parties from receiving foreign donations

  • strengthening laws on the disclosure of classified information

  • making it a crime to support foreign intelligence agencies

  • restrictions targeting foreign spies.

The public release of intelligence can no doubt have a powerful impact on the political environment, as last week’s reports about Dastyari demonstrate. The claims are certainly troubling, but when secret intelligence becomes front-page news, it is always worth looking beyond the headline.

Public intelligence is political intelligence

Classified and sensitive information is designed to be secret. When it is made public it is always for a political purpose. That purpose may be to promote a particular political agenda or to build public support for a certain policy position.

It may even be for partisan political gain, but it will always affect the political narrative. Because intelligence disclosures are so sensational, they are a very effective method of drawing attention to certain issues while distracting from others.


Read more: Government questions whether Dastyari fit to be a senator, in new row over Chinese donor


Intelligence that is deliberately released to the media for political purposes is known as “public intelligence”. When secret intelligence becomes public intelligence, it becomes a powerful tool of political influence.

Intelligence has an authority and influence that may not reflect its content. This is because of the psychological impact of intelligence.

Intelligence is usually classified, which makes it appear valuable. It is often collected covertly, so the public expects it to reveal hidden secrets. The result is that information from intelligence sources is treated with an unusually high degree of reverence and respect.

Intelligence also has a voyeuristic, illicit appeal. When intelligence stories feature in the news, readers are given a glimpse of a world that is normally off-limits. This is especially true for a generation raised on Bond movies, whose primary understanding of intelligence activities stems from popular culture.

Stories that feature intelligence exposes can therefore expect to have a broad audience, reaching beyond the typical consumer of political news.

Public intelligence has limitations

Despite its appeal, public intelligence has several significant limitations.

First, it is important to remember that public intelligence is incomplete. It is only a small section of a greater picture, and usually offered without context or nuance.

Intelligence reports are uncertain; the judgments they contain are always qualified. But in the process of selecting the information for publication, any cautionary judgments or concerns about sources are removed. As a result, when select pieces of intelligence are publicly released, intelligence loses its uncertainty and gains an authority and aura of truth that may not be deserved.


Read more: Chilcot’s lessons for Australia


The now-discredited intelligence dossier on weapons of mass destruction released prior to the 2003 invasion of Iraq is a case in point. In the aftermath of the invasion, when the weapons could not be found, it was revealed that the intelligence released publicly had been cherry-picked, that ambiguous evidence was presented as certified proof, and that the intelligence judgments had been massaged to more firmly fit the political line.

The second point to consider is that publicly released intelligence usually cannot be corroborated or contested. Even though certain pieces of intelligence may be released, the source and methods used to obtain that information are not.

This means that even if they wished to, neither the press nor the public have the means to assess the accuracy of intelligence information. We simply do not know if the information comes from a trustworthy source, or was obtained by reliable methods. However, we are not able to refute it.

Public intelligence should be viewed critically

Because of the political nature of public intelligence, combined with its limitations as a reliable source, both media producers and consumers should consider public intelligence with greater scepticism than other news items, not less.

The ConversationDastyari’s conduct should not be excused or minimised. However, when secret intelligence becomes public intelligence, it may pay for us to ask where our attention is being drawn, why that might be the case, and what we might be missing while we are looking the other way.

Melanie Brand, PhD Candidate in Intelligence History, Monash University

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

Public investment in electricity generation – a hot-button issue in Queensland?


John Quiggin, The University of Queensland

One of the most striking features of the Queensland election campaign is that all major parties are advocating public investment in electricity generation.

The real choice to be made is whether this investment will promote the goal of a decarbonised energy system, or whether it will seek to delay this transition and prolong Australia’s reliance on coal-fired electricity.

Labor and the Greens are advocating public investment in renewables, while the LNP and One Nation want a new coal-fired power station.


Read more: Twitter analysis shows Queensland Labor has put Adani behind them


This choice, in turn, depends on attitudes to mainstream climate science. If the findings of mainstream science are accepted, a complete phase-out of coal-fired power, and its replacement by renewables, must take place over the next couple of decades. This implies a target of 50% renewables by around 2030.

The Queensland Renewable Energy Expert Panel modelled the achievement of a 50% renewables share for Queensland. The Expert Panel identified economic benefits of a renewable investment program including an average gain of 6,400 jobs.

Queensland has retained publicly owned electricity generators, primarily focused on coal-fired power. It would make sense for the public to diversify more into renewables.

Where the parties stand

At its recent conference, Labor committed to continued public ownership in the electricity sector and a 50% renewables target by 2030. The conference motion proposed a publicly owned energy corporation committed to protecting customers’ interests and building at least 1000 MW of clean energy.

The Greens propose more comprehensive public ownership with investment of $15 billion over the next 5 years to build publicly-owned clean energy and storage, estimated to create 5,500 jobs every year. The Labor-Green emphasis on renewables is consistent with the movement of the global mainstream.

Last week, at the UN Climate Conference in Bonn, 19 nations including the UK, New Zealand and Canada joined the Powering Past Coal Alliance, pledged to phase out coal-fired power altogether.


Read more: Bonn voyage: climate diplomats head into another round of talks


In sharp contrast, One Nation’s policy is based on the claim that climate change is a hoax, promoted by the United Nations as part of its sinister Agenda 21 policy, which, according to the One Nation platform, seeks to control you and your life .

This position is, at least, internally consistent. The willingness of conservative, liberal and labour governments around the world to sign up to a common climate change policy is seen by One Nation as evidence that the UN is making progress towards its goal of world domination.

The LNP takes a more ambivalent position. While backing coal and opposing renewables, its Queensland state conference narrowly rejected a motion calling on Australia to withdraw from its Paris commitments to reduce greenhouse gas emissions.

‘HELE’ of a big gamble

The key idea used to reconcile these contradiction is the idea that we can meet our commitments using “high efficiency, low emissions” (HELE) coal-fired power stations.

HELE power stations rely on the process of ultra-supercritical generation. That sounds impressive, but the reality is more prosaic. The term supercritical refers to the fact that at high temperatures and pressures, fluids are neither liquids (in this case, water) nor gases (steam) but display characteristics of both. Supercritical boilers are 10-20% more efficient than subcritical boilers.


Read more: Ultra, super, clean coal power? We’ve heard it before


The first supercritical boiler was invented in the 1920s. The technology was fully commercialised by the 1990s. Coal-fired power stations built in Queensland since 2000 operate on supercritical technology.

‘Ultra-supercritical’ plants, first installed around 2000, operate at even higher temperatures and pressures, but the additional increase in efficiency is limited, by the physics of the Carnot cycle, to between 10 and 15 per cent. The HELE acronym is misleading: emissions are lower than those of 20th century plants, but higher than any other generation technology.

So, the moment any substantial carbon price is imposed the proposed power plant will cease to be financially viable and will become a stranded asset. Investment in such a project is a bet that all the world’s scientists and every other government in the developed world have got things wrong or, alternatively, that Australia can go it alone on this issue.

It’s hard to see any financial institution taking a risk like this. Given the warnings already issued by regulators about the dangers of investing in stranded assets, a loan that goes bad will leave the lender open to litigation and regulatory sanctions. Will banks be willing to lend the necessary billion dollars or so on such collateral.

The ConversationShould the LNP gain office, then, their policy will face a critical test. Even with a substantial public investment, will any private firm be willing to take an equity stake in what looks certain to become a stranded asset? If not, will the Queensland public be forced to bear the entire risk?

John Quiggin, Professor, School of Economics, The University of Queensland

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

Are private patients in public hospitals a problem?


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A new report has claimed public patients are worse off with increased numbers of private patients in public hospitals.
from http://www.shutterstock.com.au

Peter Sivey, RMIT University and Terence Cheng, University of Adelaide

Recently, hospital and aged care provider Catholic Health Australia (CHA) released a report sounding an alarm bell at recent increases in the number of patients in public hospitals being urged to “go private”.

Public hospitals may encourage their patients to “go private” because it allows them to bill the patient’s health insurance and Medicare for costs incurred, rather than having to dip into their own limited budgets. Patients may be persuaded to use their private health insurance after being assured by the public hospital of no out-of-pocket costs, or being promised added extras such as a private room.

The report argued this trend may harm the private hospital sector by affecting profitability and investment decisions. It may also harm the interests of public patients if public hospitals discriminate in favour of treating private patients.

While aspects of these concerns may be valid, there may also be some benefits to public hospitals treating more private patients.

A look at the figures

The report is correct that the numbers of private patients in public hospitals are increasing, at an average of 10.5% per year since 2011-12. Public patients in public hospitals and private patients in private hospitals have also been increasing, but at slower rates of only 2.7% and 4.5% per year respectively since 2011-12.

But percentage rates of change can be misleading. In raw numbers, the increase in public patients in public hospitals (527,467) and private patients in private hospitals (576,135) has actually outstripped the raw increase in private patients in public hospitals (287,473). This is because public patient numbers are increasing from a much larger base (over five million) than private patients in public hospitals (less than one million).

Concerns with this trend

The CHA report notes several concerns with the trend of increasing private patients in public hospitals. They note anecdotal evidence of public patients being pressured to “go private” with incentives including drinks vouchers, better food options and free parking. While these reports may seem concerning, it’s hard to base any change of policy on anecdotal reports.

More worrying is the suggestion that publicly-admitted patients in public hospitals are being discriminated against, for example by being made to wait longer for treatment. The CHA report cites data from an Australian Institute of Health and Welfare report, which shows waiting times on public hospital waiting lists for public patients (at 42 days) was more than twice that of private patients in public hospitals (20 days).

But this difference is hard to interpret. There may be many differences in diagnosis and disease severity between public and private patients, which may explain the waiting time gap. So we can’t conclude this is evidence of any form of “discrimination” against patients without private health insurance in the public hospital system from these figures.

More robust evidence from public hospitals in NSW in 2004-05 does show private patients were prioritised over public patients. In this study, waiting times for elective surgery were found to be considerably shorter for private patients, despite having similar clinical needs as public patients.

Differences in waiting times between public and private patients were found to be largest for patients assigned to the lowest two urgency levels. In these cases, waiting times for public patients were more than twice as long as for private patients.

There is further evidence, also from NSW public hospitals, that public and private patients may be treated differently when they are assigned to an urgency category for waiting lists for elective surgery. The study suggested private patients were more likely to be assigned into more urgent admission categories, which corresponds with a shorter maximum wait for admission into hospital.

This study also found private patients were likely to receive more medical procedures while in hospital, but found no difference for length of hospital stay or, importantly, for mortality rates.

Potential benefits

One claim of the CHA report is that there has been relatively “stagnant” growth of activity of private patients in private hospitals, potentially affecting their profitability and investment decisions.

First, the figures don’t seem to back this up. The increase in numbers of private patients in private hospitals is actually higher than the increase in numbers of private patients in public hospitals.

Second, even if private hospitals were losing business to public hospitals, it could be a welcome demonstration of competition in the health care market. The trend may be explained through public hospitals providing better amenities, higher quality, or lower costs than private hospitals.

There are some arguments to support continuing the practice of public hospitals admitting private patients. There can be efficiency gains to the health system given that the fees and charges for private patients in public hospitals are usually lower than those in private hospitals. So this form of competition could lower the costs in the health system as a whole.

Additional revenue raised by public hospitals could also support the continual provision of services and programs for public patients, which may have been curtailed due to budget cuts to the public hospital system.

The public hospital system is often seen as unfairly treated by the private sector in how it bears costs for training junior doctors (which takes place overwhelmingly in the public system), and treating the most severely ill patients. From this perspective, it seems only fair to allow public hospitals to take their “share” of the more profitable private patients.

Why we need better data

It’s important to figure out whether private patients are receiving preferential treatment at the expense of public patients. One study found abolishing preferential access for private patients and admitting patients according to when they were listed for an elective procedure would only lead to a small improvement in waiting times for public patients.

This is because long waiting times for public patients are primarily due to budget constraints in public hospitals, and not because private patients are skipping the queue.

The available robust evidence on the treatment of private patients in public hospitals is from more than a decade ago, and it’s unclear if the disparities between how public and private patients are treated have improved or worsened.

The ConversationOne reason for the lack of high quality research on this topic is the restriction on access to detailed hospital data in Australia, which we need for robust studies. If we had access to more detailed data, we could better understand what’s happening now, and ensure timely access to high quality hospital care for both public and private patients.

Peter Sivey, Associate Professor, School of Economics, Finance and Marketing, RMIT University and Terence Cheng, Senior Lecturer, School of Economics, University of Adelaide

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

J. I. Packer’s Ministry Ends


The public ministry of J. I. Packer appears to be largely over, to the extent that it can ever be truly over. The link below is to an article reporting on the end of his ministry.

For more visit:
http://www.christianitytoday.com/gleanings/2016/january/crossway-ji-packer-ministry-has-ended-macular-degeneration.html

Peter FitzSimons and Christianity


Peter FitzSimons has plenty of critics in Australia, as do many other journalists and public figures, and dare I say ‘celebrities.’ I find much of what Peter has to say refreshing, sensible and very good, though as with others whom I agree with on many occasions, there are times I disagree with him and on some issues we stand worlds apart. His attacks on Christianity is one of the areas I disagree with him and this article I cam across, linked to below, offers some useful thoughts on this area.

For more visit:
http://mentonebaptist.com.au/blog/gambling-peter-fitzsimons-and-church