Crying poor

The Queensland government has cited an alleged financial crisis as one of its spurious justifications for the sale of public assets, but apparently it can find a spare billion or so to spray on yet another sporting event which will almost certainly return little or nothing in revenue. I had my say on the Commonwealth Games bid here and here. The ABC story includes Treasurer Andrew Fraser’s admission that the proceeds of the asset sales, which were supposedly going to finance schools and hospitals, are the source of this luxury expenditure.

I’m happy to say that on this occasion I was accurately quoted in the Oz. The reporter Roseane Barrett did her job properly, and there was no editorial interference, presumably because the story was critical of a Labor government.

41 thoughts on “Crying poor

  1. So it seems that Anna Bligh is a “good time girl”, selling off the assets to keep the “party” going. That is disappointing.

    What do you have to do to get some energy and vision into government?

  2. BilB, we’ve not always agreed on everything but, if it’s any consolation, I have a viewpoint very similar to yours as to Anna Bligh and her “government”.
    The recent advertising for the selloff of QLD rail was arrogant in the extreme and was, significantly, not offloaded onto the QLD public till after the fed election.

  3. Welcome all Mums and Dads to the latest new offering T1,2 and 3 ..oh I mean QR1, 2 and 3.

  4. You know if they didnt have all that super pooled up in managed funds – no-one would buy it. Thats part of the major problem we have – institutional investors wanting to pile in for want of anything real to invest in….the rewards of privatisation will go straight to some “Sol Trujillo” of the railways on some exorbitant salary…in a few years they will have stuffed the operations entirely….lets hope big business starts screaming there is no effficiency in QR and they are paying too much to haul their coal…or whatever and then the stupid government has to get off its lazy posterior and actually maintain and invest in infrastructure again. Unfortunately the whole epsiode, which I want noted I predict right now, will cost taxpayers much much more…

    but then Im starting to think that is the end game of governments and privatisation.

  5. Perhaps Queensland could spare a bit more to take the moto-GP off Victoria. Or perhaps they could just have it for free.

  6. Bligh and Fraser – what do they care? practically the whole of QLD hates them. They must know that. They are not in politics for the good of the state, the good of the economy. They are in politics to reward their high falutin business mates who want to sponsor a sidewhow and at the same time they are looking after their post political job opportunities with some financial firm somewhere.

    This sucks. This is what happens when you mix money with the public sector and politics (via privatisation). The politicians (Bligh and Fraser) pat someones back (some raceway idiot like the V8 supercars in Sydney) and get their own backs patted later after the next election when they are thrown out and looking for the big $ private sector jobs. Thats all they give a damn about and meanwhile their hairstyles stand up in a force nine gale and the grins are frozen to their faces while the News Lts cameras snap away.

    It really stinks. It smells so bad – never thought Id live long enough to watch this country go down the drain but Im seeing it in front of my eyes.

    The street where I grew up in is full of potholes.

  7. @Alice
    The job is largely done.

    UK exported nationalisation to the world. Thatcher exported the cure – privatisation. Thank god governments took it up when they did.

  8. @Rationalist
    The job is largely done I agree Ratio….public assets sold off and not working well and collapsing in piles of private sector debt (nicely pass the parcel—-written into the PPS contract as a contingent libaility on…you guessed it it one…taxpayers…the eternal fount of all wealth for entrepreneurial firms and entrepreneurial scumbag politicians.)

    Well I dont know about you Ratio – but Im trapped in PAYE land paying for these con merchants who are supposed to deliver something real with my taxes. Would you care to send me the name of a good accountant or a gun because right now I can see a use for both.

    As I said before – the street I grew up in is full of potholes yet much richer people live in it now. Surely their taxes can fill the potholes…or maybe they have a better accountant than me?

  9. Alice, I’d tend to agree with you , visa vis the oxymoronic Rationalist’s comment- the cure has proved far worse than the the alleged disease.

  10. Ratio’s cure is the disease that is killing us Paul. What on earth did Ratio mean? “Thank god governments took it up when they did.”

    Does he mean Govts couldnt possibly afford to buy back the public assets they once owned even if they wanted to?

    Thats what really scares me Paul….and Ratio thinks its a plus?

  11. Probably one of these that thinks its all “the gummint’s” fault, without bothering to find out what and who the”gummint”really is. Whereas you and I would see the problem as more “the system” .
    I just wish it had been Terje instead, at least you know where you stand with him.

  12. I note that QR considers moving 500,000 tonnes of coal a day to be a good thing and no doubt a long term good thing and even growing good thing. I think that works out to be roughly 500,000,000 tonnes of CO2 per year (each tonne of coal turns into more than 3 tonnes of CO2). Of course most Australians prefer to believe this is not part of Australia’s contribution to climate change but when the impacts begin to be costly as well as clear the people of other nations will likely do what we prefer to do and look for other nations and people to blame. The world’s biggest coal exporter will be perfect for that role. The costs to Australia of that defy calculation but I don’t believe they won’t exist and won’t hurt us deeply. Just one more way that governments indulge in false economy.

  13. Since the privatisation mania began in Australia it has been intentionally the vehicle for massive wealth transfers from the public to private owners.

    About 100 billion of federal and state assets (on a conservative valuation) have been sold since about 1990 for about 50 billion. That’s a 50 billion dollar wealth transfer.

    The neocon corporates are mainly about plundering rather than producing. That’s why productive investment takes a back seat to raiding public wealth and running a casino-ponzi financial system. The neocons also don’t understand the importance of science and technology in working to maintain a sustainable environment and a sustainable productive base for our economy.

    Our system is now unsustainable and unreformable. The best thing that can happen is another great depression leading to radical social change and a sustainable change in course. The current system is corrupt, criminal and unsustainable. It will collapse under its own weight.

  14. Take the privatisation of ETSA (Electricity Supplier [Trust] of South Australia), the result has been a tripple wammy:

    1) Loss of significant dividend to Govt revenue;
    2) Lack of infrastructure improvemet;
    3) 20% hike in prices paid by consumers.

    If that 20% when to greenpower or efficiency I wouldn’t mind, I’d be happy. But it is not clear that this is the case. I suspect profit gouging might be at play.

  15. Well after the neo con corporates trash all our public assets – will we be ready to be herded into one monumental marketplace? It seems like the Europeans dont much like the takeover by neo cons either…

    Must watch video..

  16. @paul walter
    LOL Paul – I tried to get Terje back – hes over at ALS. Says the Prof ‘needs his space’ but I reckon its the sheer horror of the ban, however temporary, that did it (our Terje loves his freedoms but its not as much fun in the sandpit without him).

  17. Ikonoklast raises a good point about wealth transfer. In the end, markets are places where wealth is transferred and valued, not created, other than in short term bubbles. We need to get back to creating things of value, not simply inflating assett prices. If financiers can make profits without having to generating anyting of value, they will cheerfully do so.

    Stephen Long at the ABC website recently did an analysis of APRA figures where he pointed out that average returns for all listed super funds since 1997 were only 4% per annum, barely ahead of inflation. Further proof that, despite the huge pile of capital being stored in such funds, we are not using it to create things of value. Too bad the GFC didn’t last longer here. The stimulus saw us make more long term investments thant we have contemplated in some years.

  18. My mother was going through some old articles we have kept from a couple of generations ago. The handy work on some of the utensils, kitchen ware and various other outmoded items (matching eyehook and boot spoon) is impressive. Even the delicate work on a very small bottle – for the lady of the house to store her perfume – demonstrates the willingness to show some finess in even the potentially mundane items.

    I mention this because in my opinion it is a good counterpoint to the mystery of Qld government (and even Australian Federal Government, but that’s another story for another day). It shows quite clearly what people are capable of when they have the free time and space to think about how to improve their craft, of how to bring out the best in something. A fairly graphic example of what was achievable in both the government context and private hands are the many fine buildings that are a monument to the craftsmen and artisans of the time. Items weren’t just designed with utility and economic benefit as the sole dictator of effort to place in the making of the item in question. Whether a beautiful building for public use, the ornate and elaborate designs within the Commonwealth Bank at Martin Place/Elizabeth St in Sydney, or some of the very old rural homes, or even a boot spoon, care and attention to detailed artistic finish were not short changed.

    How come we seem to miss out on that in today’s society, under today’s state governments – Qld being the current example of privatise once, pay forever, but SA fell for that too when it gave up power generation and distribution, which incidentally increased electricity costs far beyond that portrayed as the likely impact of the ETS during the previous Rudd government. And yet the (economic?) rationalists – in great form holding true to the oxymoronic implications of the nominative determinism in their name – paraded in the streets almost; the arguments by the social democrat types concerning cost increases due to distribution and supply issues in the peak months, that fell on deaf ears. The world didn’t collapse under the weight of the price increases though, which rather makes the case that the ETS in the legislated form of the CPRS wouldn’t have killed humanity’s progress either.

    PS: I have two super funds – my form of risk management against total fund failure – and one of the them has barely beaten inflation, and the other one has although it had some shocker quarters during the GFC. The question now is whether any funds are stupid enough to buy into the “QR VisionTM” or whether they learnt from the Ghan experience, certain X-City Tunnels (LOL) or Lane Cove ABSOLUTE DISASTERS (LOL some more RFLOL)?

  19. Donald Oats raises some good points about arts, crafts and aesthetics. Our modern society is almost unrelentingly ugly. Our city scapes are mostly a jumble of black bitument, grey concrete, poles, wires, advertising signs, discordant architectural styles and noisy, ugly CO2 spewing 4wd and suv monsters. Corporate capitalism, it’s mad, bad and deadly on the environment.

  20. @BilB
    That house is pretty darn impressive. I am glad to see that they used straw for insulation – it is an extremely good insulator – and stuck to the principles of use, not abuse of the surrounding environment. Wow.

    On TV a while ago now I saw a doco in which a husband and wife team, with the help of a few friends here and there, rebuilt an old – very old – style of house/hotel in rural Italy (IIRC). It took them several years to finish. They did the walls, the internal garden with house windows looking in upon it, large colonades to shade the walls in summer, and artwork for the walk ways and some of the walls. What is called a labour of love. I’ll have to see if I can find it on the net; it isn’t comparable to your example in terms of cost and environmental impact but even so it demonstrates the skills required – and learnt mainly on the job – to build the old style of dwelling.

  21. It will cost a lot more than “a spare billion or so”. The official cost of the Delhi games is US$2.5 billion but according to the Indian business magazine Business Today the real cost is US$15.47 billion (Source: Wikipedia). Now it’s true that, unlike Delhi, Brisbane already has most of the facilities but given the desire of games host cities to out do their predecessors, the cost is likely to be huge.

    I guarantee that if this bid goes ahead the Queensland government will commission a study which will show that the net economic benefits of staging the games will be strongly positive. I also guarantee that this study’s methodology will be, in effect, to assume the answer.

  22. If anybody wants to know about a Privatisation disaster involving rail, you don’t have to look far.

    New Zealand – Privatised. Private company ran down assets to the point where much of it was almost worthless. Government had to renationalise and reinvest at enormous cost.

    Tasmania – Rail run down so badly, government had to take it back and ask Queensland Rail’s engineers to come down and fix their track.

    Melbourne – A great deal of rotting timber sleepers, un-tensioned overhead wires and trains that turn off in hot weather and an on time running (OTR) of about 82%. RailCorp (Government) in NSW is 95%+.

    Great Britain – The greatest disaster of them all.

    In 1994, the number of passenger kilometres travelled was 28.8 billion.
    In 2009, the number of passenger kilometres travelled was 50.3 billion.

    An increase of 76.6%.

    Public subsidies in 1993/4 were £1,627m ($2,430.00 in 2008 terms adjusted by RPI)
    Public subsidies in 2008/9 were £5,212m

    An increase of 114.5%

    In 2007, the subsidies reached a peak of a whopping $6,308m.

    Then there was the disaster of RailTrack. Someone thought it would be a brilliant idea to be a infrastructure operator without adequate engineering skills within the organisation. After the Hatfield disaster, nobody had any idea how much of the network at risk. They more or less shut down large parts of the network or simply slapped on speed restrictions. Their profits turned to losses, and RailTrack asked the taxpayer to bail them out. The government had to eventually nationalise this giant disaster.

  23. @Alice

    It is not surprise to me…the real question for the US is how much real unemployment, ie people who want to work fulltime or as close to that as possible, is hidden among the unemployed running down savings, underemployed using undeclared income (cash in hand) to make it through a week, as well as those on the limited US unemployement benefit?
    I think it was 25% in the Great Depression for one of the years – yes, 1932 according to the book by Eric Rauchway, The Great Depression & The New Deal: A Very Short Introduction, Oxford University Press (2008), first paragraph on page 1!

    However, anything over 15% unemployment has to cause noticable social changes as much as economic ones. People lose lines of credit and also become very shrewd in the use of the lines of credit still available – eg, they buy goods on a credit card on a particular date to maximise the length of “free credit” before paying off the card in full at the end of the interest free period. Still others repair rather than replace clothing, put up with old worn furniture, and don’t watch payTV ad channels. Instead, they use computers for entertainment, or their i-Phones or i-Pods, assuming they already own one. Libraries regains their old membership rates through renewed interest in borrowing, rather than buying, new books. The nearest equivalent period, the aftermath of the Great Crash in 1929, people who were not even shareholders took the plunges of the stockmarket as a proxy for their own financial security, and acted accordingly. As Rauchway reports (pg 19):

    Facing a dubious future, Americans made important decisions not to buy. Particularly, they stopped buying the expensive durable goods like cars that they had learned to buy on credit. Each signature on and installment-plan contract represented a consumer’s prediction about his or her ability to pay in the future. Suddenly Americans no longer felt able to see far enough ahead to make sound forecasts. Within a few months of the crash new car registrations had fallen by almost a quarter of their September number. In 1930 spending on consumer durables fell by 20 percent. Factories closed and banks failed. Unemployment more than doubled its 1929 level.

    It is worth remembering the mad scramble to “save” car dealers and manufacturers in the first Rudd Labor government, and the utter failure of the opposition to appreciate the perils Australia was facing. Our current two-speed economy stands testiment to the Lib/Nat opposition’s incredible inability to learn from the pages of history, perhaps because they believe they are entitled to rule Australia rather than afforded the occasional privilege by the Australian voter. Some humility wouldn’t be amiss if tried out for size by the opposition – Tony Abbott the clown excepted.

    Still, after the two really bad years of the Great Depression, the growth rate of the US economy was nothing short of amazing: 8% growth per year from 1933–37 and 10% a year from 1938-41 (see last para, pg 5, Rauchway 2008). Unemployment returned to 1929 levels (pre-crash) in 1943, although it was trending downwards well before the Second World War began (ibid, pg 5). I haven’t checked, but IIRC the Dow returned to 1929 levels first in 1955. Perhaps someone could check it out; anyway, the real economy took until the middle of the Second World War to have unemployment back down to pre-crash levels, and that doesn’t account for the effect of war-time military drafts of the coercive kind. Starve on foodstamps or get a modest income and three square meals a day (until the fighting starts for your platoon, of course); not much of a choice for an long-term unemployed American.

    Getting away from that and focussing upon Qld, they are a major source of our coal for export. Unfortunately, climate scientists like Jim Hansen make a compelling case for why any response to our feeding of GHGs in the atmosphere must include leaving nearly all of the known coal reserves in the ground. Tony G and El Gordo are no doubt falling off their respective chairs upon reading this, so I’ll provide the quote sand references to them:

    Secondly, the belief that ice sheets are inherently lethargic is based mainly on the average rate which they grew and decayed during Earth’s history. The overal size of the ice sheets grew and decayed over tens of thousands of years. But the ice sheets responded so slowly because that was the time scale for changes to Earth’s orbit – the time scale for the forcings that caused ice sheets to grow or melt.These slow orbital changes imply nothing about how fast the ice sheets would respond to a rapid forcing.

    the paleoclimate data indicates that ice sheets are able to respond rapidly, with large changes in a century. Sea level 13,000 to 14,000 years ago rose at a rate of 3 to 5 metres (10 to 17 feet) per century for several centuries.

    [James Hansen, pp 142–143, Storms of my Grandchildren, Bloomsbury (2009)]
    In other words, as I have highlighted in bold and/or italics, it is only relatively recently that scientists have (approximately, but within physical constraints imposed by the data) settled the question of just how rapid a response might be expected from a given forcing, in so far as the north and south polar zones go. And it isn’t a good picture at all, in spite of the IPCC’s decision not to include such data (yet). As Jim Hansen says further on in his book [Hansen, pp 161–162, ibid]

    The natural source and sink^[for carbon dioxide] can be out of balance, such as when India was cruising through the Indian Ocean, by typically one ten thousandth of 1ppm per year. In a million years such an imbalance changes atmospheric carbon dioxide by 100ppm, a huge change.
    But humans, by burning fossil fuels, are now increasing atmospheric carbon dioxide by 2ppm per year. In other words, the human climate forcing is four orders of magnitude – ten thousand times – more powerful than the natural forcing.

    With regards to methane hydrates, the leading contender for several “rapid” interglacial warmings, Jim Hansen and others now believe (in the scientific sense of the word, not theological) that methane releases are a nonlinear feedback from natural forcings. To quote [Hansen, pg 162, ibid]:

    Unfortunately, paleoclimate data now unambiguously point to the methane releases being a feedback. If the PETM^[the Paleocene-Eocene Thermal Maximum, a rapid warming of at least 5 degrees Celsius] were an isolated case, that interpretation would be less certain. But it has been found that several PETM-like events in the Jurassic and Paleocene eras were, as with the PETM, “astronomically paced.” Huh? Tha means the spkes in global warming and light-carbon sediments occurred simultaneously with the warm phase of climate oscillation by perturbations in Earth’s orbit. In other words, the methane releases occurred at times of natural warming events.

    Hansen’s book is quite useful for the layperson – it is his attempt to synthesise his reasons for thinking that business as usual (BAU) is going to lead to inevitable rapid environmental change/challenges affecting a huge proportion of our planet’s biosphere, not the least of which includes us. He gives five clear points as to why we must aim for a 350ppm carbon dioxide target, which is already below the current atmospheric carbon dioxide content (around 390ppm). On page 174 Hansen has a graph (Figure 22) which illustrates how much of a given fossil fuel has been used, and what the estimated reserves are. We simply cannot get rid of cars overnight (although we may use them less) and coal is a cheap source of industrial heating, especially in metal production. It is certainly feasible to switch from coal to another carbo-rich heating sources

  24. @Donald Oats
    Don the sad truth is also that if they measured unemployment in exactly the same way they did during the great depression – it is already at 20% or around that mark. Thats the ting most people dont realise. Some US states and industry sectors are already even higher at 28% unemployment.

  25. @Ikonoclast

    I disagree with this sentiment quite strongly – I like the modern aesthetic, and I don’t think it has much to do with corporate capitalism, per se. I quite like that hobbity-looking house. It’s more modernist than traditional, though.

  26. BilB :If that is the way that you feel, Ikonoclast, then you might be more interested in this

    A nice cosy hobbit like house! 🙂 Very good. Does it pass building codes for safety? Especially the load bearing members? Otherwise I have no qualms. It’s an aesthetic I could get to like. The problem, as always now, is that 6 billion could not live like that. The planet has about 6 times the population it should have for sustainability purposes.

  27. @Donald Oats

    The clear conclusion is that rapid disastrous climate change is about 90% certain. Exhaustion of non-renewable resources is 100% certain. Our chances of adapting to all this and keeping our current civilization and population intact are functionally zero. Our chances of surviving as a species for another century… about 50%.

    The best scientists know all this. The rest of humanity is in ignorance or denial. Whether it really matters is moot. Personally, I dont think our species is special or important in any way; not in any ecological, evolutionary or cosmological big picture sense. Although I agree that what we thnik and feel on daily basis matters to ouselves. But thinking humanity itslef has some great overarching importance is just humanity’s conceit.

    I find I can think this and yet live existentially day to day. I also notice that despite my misanthropy I am not more cruel and I am considerably less exploitative than the average humans I meet. As W.B. Yates wrote, “The best lack all conviction while the worst / Are full of passionate intensity”.”

    It’s the fervent believers, like market funadmentalists who you need to fear.

  28. Yeah, most but not all, he’s done a self-build housing co-op and a number of houses close to the hobbity house we all liked. I have faint a suspicion I’ll never own a Picasso, but a guy can look)

  29. Ike @34,

    The Simon Dale hobbit house is just a quaint interpretation of the building class called “Earth Sheltered”. You might enjoy viewing the work of this style’s most respected modern proponent, Malcolm B Wells.

    As 90% certain global warming bites hard and people suffer from extremes of heatwaves, fire storms, cyclones, hurricanes, extreme hail, etc, you will further appreciate earth sheltered dwellings. Take a closer look. With this style there can be ultra dense accommodation …and… the green veneer of life that sustains us, along with the birds and the bees as well.

  30. @Alan
    Just had a look and yep that is the one, I reckon. While I certainly couldn’t have afforded that, plenty of people can, but the really interesting fact for me was the amount of the work that the couple did themselves to make it happen. Personally, I’d be pretty happy with a ramshackle cottage on a block with garden and veges, and a broadband – true broadband speeds – connection to said cottage. Stuff the sewage, who cares about boiling hot water or clothes dryers or multiple ovens, etc? A good long verandah with clean air and voila – drying space for the chilies and other fine plant offerings…Na, I’m dreamin’.

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