NSW Govt privatisation:
Corruption, scandals and strife
by Peter Mac The Queensland ALP Government isn't the only one to be dogged by persistent rumours and scandals of corruption. Within the recent past, for example, the NSW Government has faced revelations that its proposed highly controversial lease of the historic North Head Quarantine Station site would net the government over a 30-year period only one third of the present income generated by use of the site by the NSW National Parks and Wildlife service. The government-appointed chairman of the newly formed Sydney Harbour Foreshores Authority (SHFA) has also drawn strong criticism on the grounds of conflict of interest. ŠThe SHFA has control over State Government harbour property, and while acting as SHFA chairman Gleeson was also director of a company whose subsidiary was awarded lease of a prize government waterfront site at Darling Harbour. The Sydney Aquarium had a strong interest in acquiring the lease, but claims that most of its correspondence to the Authority over a two-year period concerning lease of the site was simply not answered, and that the lease was then awarded to Gleeson's subsidiary company. More recently, the Government's arrangements with private contractors over NSW State Rail and Roads and Traffic Authorities have come under scrutiny from the state's Audit Office, which concluded that certain clauses which were entered into by these organisations with private contractors were deemed "not to serve the public interest". Specifically, Sydney's recently-opened airport rail link, which was leased to private operators by the previous Fahey Liberal Government, has run into financial trouble, with the number of passengers on the line not reaching the expected levels. (This could have something to do with the fares, which are approximately two and a half times the cost of an equivalent journey on the state-owned rail lines.) The private operators of the line claim to have been mislead by government as to the anticipated patronage for the line, and the matter is heading for the courts. The private sector is now arguing that all public projects should be open to "private investment" and that in future the government should shoulder the major burden of the financial risks associated with such projects. They have, for example, proposed that future tollway projects be financed jointly by both private and government sources, and that revenue from road and other projects should take the form of a "shadow toll". This arrangement is prohibited by current tax law because of the possibility of collusion and conflict of interest. Under a shadow toll, the government, not the drivers, would pay a toll to the company based on the number of vehicles using the system and the proportion of cars to trucks. This form of payment would not only reduce the financial risks for the companies, but would also largely remove the issue from the public gaze. In particular, it would avoid public protests over toll charges, and facilitate future toll rises. Significantly, the major transport initiatives involve roads, rather than the more efficient public transport, especially rail. ŠPrime Minister John Howard's major preoccupation at the moment is for the provision of funding for road construction, to the exclusion of other priorities such as welfare or flood relief. The NSW Labor Government seems to share this preoccupation, with the main focus on the construction of the giant western orbital road. The one exception is the newly revived rail link to Bondi Beach, which, if it were to go ahead with either a Liberal or Labor Government in office, would almost certainly involve a partnership with the private sector. Although many ALP members are still hopeful that their party will play a more progressive role in public affairs, it appears that in NSW as in other states the ALP and the Liberals are increasingly resembling a political version of Tweedledum and TweedleDee on the question of privatisation.