Thursday, April 28, 2011

Belshaw's World - coming up thistles in government wasteland

Note to readers: This post appeared as a column in the Armidale Express on 20 April 2011. I am repeating the columns here with a lag because the Express columns are not on line. You can see all the columns by clicking here for 2009, here for 2010, here for 2011.

I wrote in a blog post during the week that I seemed to be in a cranky, irritable, mood at the moment

I’m not sure that I can be blamed.

One cause was the hike in electricity prices. I thought blow this. Well, that’s not quite the word I used. Indeed, I used several words that I fear this paper might not publish.

Two reasons were given for the price increase.

One was the excessive costs of the renewable energy program. Well, that was a policy failure, but it was one I could understand.

The second was the need to catch up on maintenance. This was the one that made me swear in a most uncharacteristic fashion.

Back in 1995, the wise gnomes of the NSW Treasury – may their tunnels collapse and submerge the lot of them – concluded that electricity distribution needed to be restructured. So they ripped out local assets from county councils such as our own New England County Council and put them into larger State Controlled Enterprises.

Now there were in fact some practical reasons why change might have been needed, but the overall approach was actually ideological. The Councils were, Treasury said, not subject to market discipline and were under borrowed. Why, financial modelling showed that they could carry debt levels of 50 per cent!

The problem was worst with the country county councils. They had been over investing in the network and had little or no debt. What a shame!

So Sydney grabbed the assets. The new businesses were instructed to cut costs and increase profits. There was no new shareholder investment; all this had to be funded in other ways, while maximum cash was stripped out through dividends.

Having milked the cow, Sydney sold what they could. Now we all have to pay for the whole thing. And the increases are reportedly biggest in the country, just those places where the County Council’s lazy assets were worst.

Okay, that made me crabby, but we also had the Federal Minister for Sustainable Population and a rag bag of other titles ruling out any transfer of public servants to regional centres. Growth centres are dead, he said.

Now there are some issues with growth centres that I will come back to in a moment, But Mr Burke went further.

The country was, he said, at a unique stage in its history because the mining boom meant the growth in regions was commercially driven rather than led by government.

"We have a really different opportunity because regionalism is being market-driven," he said.

I wonder what planet he is living on.

I wasn’t aware that Governments at any level had been driving regional development.

To the despair of many of us who actually believe that Government can play a proactive in regional development, all Governments for over thirty years now have been saying that the market must decide. Further, were they do provide some form of support, it is always generalised, universal.

Growth in regions has been led by government. Hah!

In the words of modern jargon, you facilitate and remove impediments and a thousand flowers will bloom. Somehow, it’s mainly thistles.

In fairness to Governments, they do try to react to specific problems. They just don’t do it very sensibly nor in a coordinated way.

Worried about problems of education and deprivation among our Aboriginal peoples, the Government builds new houses and trials different forms of service delivery in Bourke. Then the previous Sydney Government, with Federal support, buys Toorale Station and closes it down.

One can argue for or against the environmental arguments used to justify the purchase. Leaving that aside, the reality is that, in one stroke, Governments put a bullet through their entire Bourke Aboriginal initiatives.

You see, the thing that the people in Bourke most need to address social deprivation is jobs. No jobs and nothing that you do is likely to have much impact.

The large direct and indirect job loss from Toorale’s closure affected Aboriginal people most of all. There was no significant local compensation that I am aware of, I stand to be corrected, that might help Bourke adjust. The town and its people just had to grin and bear it in the name of the greater good.

I said that I would come back to growth centres in a moment. There is, as is so often the case, an Armidale connection.

Perhaps next week.


Greg said...

The electricity thing really gets up my nose too Jim. Not only because of higher consumer prices, but also because many regional jobs were lost as local county councils (eg. Shortland County Council in Newcastle) were gobbled up by their city counterparts and head offices located in Sydney.

uts said...

You're quite right about the electricity privitisation; orchestrated by treausury goons following the latest lax accounting guidelines instituted by governments because their figure fiddling friends in private industry are doing it.

What really annoys me is the media's lack scrutiny on this issue. Instead of laying the issue bare and exposing Keating's and ultimately Egan's policy as flawed so the public is alerted to this occurring again, the issue is only discussed well outside the mainstream.

Sydney is very intraverted. Sydney siders are similar to Americans in this regard. As few Americans have passports and have ever left America, most Sydneysiders have never left Sydney and have no appreciation of NSW outside of Sydney. Sydney is therefore very self obsessed and incapable of any empathy for problems outside Sydney.

This is a very good reason for a second state for Norther NSW.

Jim Belshaw said...

My apologies both for my very slow responses to your posts. Greg that really gets up my nose too.

I agree with you uts on the the lack of media scrutiny. One of the problems in this case was that it was out of sight, out of mind so far as Sydney was concerned, but the country media actually lacked the time and knowledge to properly analyse the issue. So there was a real gap.