11 Dec 2008


This is your public-private partnership – the public purse lines the pockets of the bourgeoisie. According to this article, the Sydney Harbour tunnel cost $550 million to build. Rather than pay this money, the shifty NSW government of the day got a private company to build it, to operate as a toll road, to recoup vast profits from the users. However, just to make sure they'd build it, the government removed the element of risk on which capitalist enterprise supposedly thrives, and guaranteed not simply the investment, but the profits.

What is the point of such a deal? Well, it means that the state can avoid an initial outlay. But it also means that they are deliberately foregoing a revenue stream that they know will be profitable. Since it will be run as a near-monopoly (actually in competition only with the government's own harbour bridge), there is no likely advantage to consumers or profitability having it privately-run. It's thus simply short-termism.

The claim that the tunnel cannot generate enough revenue to run is total nonsense – the problem is not that the tunnel is not financially viable, but that it's not profitable, that it cannot make the giant returns required by finance capital for them to get out of bed in the morning.

Why the short-termism? Two reasons: firstly neoliberal ideology, and secondly the shambolic Australian federalism. The influence of the first should be obvious enough: cutting taxes is good, private industry is good. The second is less noticed, but operative: the state of NSW is hard-pressed to afford serious infrastructure investment. Nationally, however, it becomes possible for the government to invest $1 billion dollars in an infrastructure project in Sydney, on the understanding that the next time it has money it'll go to Melbourne. To some extent the existing federal government already does operate like this, but imagine what it could do if it had all the money in one pot, and if proportional representation cut out the pork-barrelling.