Australia’s infrastructure “woes” as seen from Canada

From the front page of today’s Globe and Mail: Infrastructure bank seeks to avoid woes of Australian peer.

Politics is a clear dividing line in Australia when it comes to infrastructure. Since 2013, Australia has been led by the Liberal Party of Australia, which is more conservative than the left-leaning Australian Labor Party, the country’s other main political party. Australia is divided into six states and two territories.

The Australian Liberal government brought in an incentive program in 2014 called asset recycling that provided a financial reward to state governments that privatized assets. State reaction to the incentive largely broke down along partisan lines, with likeminded New South Wales praising the program as the “secret sauce” of success, while some Labor-led states declined to participate. Australia cancelled the program in 2016. . . .

John Quiggin, an economics professor at the University of Queensland, said other privately financed projects such as a $4.8billion toll road tunnel to the Brisbane airport, led to “disastrous losses for investors” as the original consortium went into receivership. He said it would appear from Mr. Sohi’s Sydney itinerary that he would have received a one-sided view of Australia’s experience. Prof. Quiggin said there have been several recent examples of Australian governments moving in the opposite direction, expanding public ownership in areas such as power generation.

“Looking at the itinerary, the minister will have spoken almost exclusively to advocates of private infrastructure, who will have told a rosy tale,” he wrote in an e-mail. “The fact is that these guys have lost the debate, as witnessed by the sudden surge of new public enterprises.”

Jeff Kennett, a former Liberal premier of the state of Victoria who approved his state’s first private toll road in the 1990s, has said those types of deals don’t make sense for governments with healthy finances. The toll highway, known as CityLink, opened in 1999 at a cost of $1.8-billion. Australian newspaper The Age estimated that the private owner, Transurban, is on pace to collect more than $20-billion in revenue by 2034.

Beats me what the point is but was nice to see all the usual gang on the front page of the local paper.

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