I am going to provide my own title for the story rather than use the headline from the subbie at The Oz who seems to have tried to obscure the point: Government projects chosen by dull-witted politicians like Malcolm Turnbull make us worse off. And I will quote a bit more than usual to help those who cannot link. And in my view Newman lets these incompetent bozos off the hook for their massive economic ignorance. We already understand how incompetent they are in political calculation, so the question remains what are they actually good at?
Political conceit, ineptitude and reckless indifference to proper process now leave Australians with an inflexible, hugely expensive communications system, little better than the one it replaced. So much for bringing our communications into the 21st century.
But not even this first-hand experience nor his publicly expressed mega-project misgivings, have dampened the Prime Minister’s enthusiasm. Indeed, with $75bn over 10 years and a new Infrastructure and Project Financing Agency to be established within his portfolio, it’s full speed ahead. Take the “Snowy 2.0” pumped hydro storage facility. There are no costings but a rough estimate puts the capital cost at about $2bn. However, when necessary upgrades to poles and wires are included, the cost rises to at least $4bn. The ultimate bill to consumers is unknown, but experts say pumped storage hydro consumes about 20 per cent more energy than is returned to the system and would take almost 15 per cent of NSW baseload production in the process.
Whatever the merits of pumped hydro storage, with five to six years to completion this project will do nothing to alleviate Australia’s immediate energy crisis and seems guided more by green politics than economics.
Another budget infrastructure decision with an eye to politics is the $8.4bn equity investment in a high-capacity inland freight link between Melbourne and Brisbane. Even though there is private sector interest in majority funding an alternative proposal, the government seems intent on discouraging, if not ignoring, it. . . .
Of course, the country needs to build and maintain vital infrastructure. But the process is flawed and invariably opaque. There are no business cases. Voters are sweet-talked into believing any infrastructure debt is “good debt”.
Is there a conclusion? There is. Give Malcolm the flick while there’s still time and bring Tony Abbott back.