New South Wales needs investment in electricity and public transport. Whether these assets are privately or publicly owned, there will be the same requirements for labour and materials to construct them, and the same demands on financial markets for billions of dollars of debt and equity finance.
The issue of public or private ownership should be a secondary one, based on consideration of risk and market failure, rather than some illogical notion that the government cannot afford to make these investments, for, whichever way, the people of NSW will have to pay for them.
Is it that we have been conditioned to believe that all public debt is bad, even when that debt is used to finance productive assets? Or is it that the government believes it is incapable of managing public assets efficiently, and rather than improving its management, wants to shove responsibility off to the private sector?
Ian McAuley is a contributing author to CPD’s recent publication More Than Luck: Ideas Australia needs now. Ian’s chapter Living off our resources looks at how we use our resources in an era where environmental capital is fast-becoming our scarcest resource of all. Ian lectures in Public Sector Finance at the University of Canberra. His research interests are in public policy, with a specialisation in health policy. His academic qualifications are in engineering and business management from Adelaide University and in public administration from Harvard University. Besides his academic work, he has assisted consumer and welfare organizations in financial and economic policy matters. He has been a strong advocate for integration of the components of health care into a coherent consumer-focussed system. He has been a critic of successive governments’ piece-meal approaches to health policy, particularly the government’s subsidies for private health insurance because they bring neither the benefits of market competition nor the benefits of strong government control. Ian is co-author of a number of papers for the Centre for Policy Development, including ‘Reclaiming our Common Wealth: policies for a fair and sustainable future‘, ‘A Health Policy for Australia: reclaiming universal care‘ and ‘You Can See a Lot By Just Looking: Understanding human judgment in financial decision-making‘.