Yet again taxpayers bail out private sector

The Victorian Government foreshadowed doom and gloom for Melbourne's 
public transport last week. Acknowledging the private operators are going 
under and that the system is near collapse, the Bracks Government is 
handing over $105 million to prop up the failed private enterprises.

The scheme, however, is not a buy-back or re-nationalisation, but a cash 
handout from the public purse. Labor claims the companies were the victims 
of privatisation bungling by the Kennett Government, and therefore 
deserving of the bailout.

"The public transport franchises were one of a series of privatisations the 
Kennett administration had mismanaged across government", said Transport 
Minister Peter Batchelor.

"In many cases, the privatisation process was rushed, flawed and based on 
simply extracting the highest price from the market — without any regard 
of the quality of services to be delivered, or the long-term sustainability 
of the privatised businesses."

Treasurer John Brumby says his Government will have to spend up to $500 
million to fix the mess.

In return for the cash, each operator must double the size of its 
"performance bond" lodged with the government to $210 million — "In the 
event that (they) became insolvent ... this money would be forfeited to the 
State."

Three companies on the verge of bankruptcy are given $105 million to bail 
them out, but then expected to lodge $105 million with the government as a 
good behaviour bond? Is Mr Batchelor serious?

Even Mr Kennet, who handed this essential public service over to them in 
the first place can see the idea is ludicrous.

"If they have failed to deliver ... then under no circumstances should Mr 
Batchelor or the government acquiesce", said Mr Kennett. "What they have 
fundamentally done is reward inefficiency..."

"Peter Batchelor has been played for a sucker", Opposition Leader Denis 
Napthine chimed in.

However, the cash comes with a stern warning from Mr Batchelor. "If the 
financial performance of the operators cannot be improved, we may have no 
option but to consider re-tendering.

Yes Minster, there is another option — re-nationalisation.