Mr Hockey, innovative or manipulative? You decide!
Joe Hockey, Australian Ambassador to the United States spoke at the BPC’s (Bipartisan Policy Center), Executive Council event on Infrastructure, in Washington DC, on Wednesday, May 16, 2018.
Hockey was invited to talk at the event, to help address America’s $2 trillion in unmet infrastructure needs. He explains how he helped saved Australia from going into recession, by taking an innovative approach! The question is, is his approach innovative or manipulative? You decide!
Hockey said, “the question for me in 2014 was; how we were going to keep the economy productive and continuously growing?”. The simple answer would be to spend money but, Mr Hockey said, “at the end of the day, the government didn’t have enough money to do it?”.
Mr Hockey said that “Australia has the fourth-largest amount of pension funds in the world, held in the private sector.”
Mr Hockey proposed to sell off state-owned businesses and assets and use private sector capital to invest it into infrastructure projects, which was going to lift productivity! He said, “I looked around at state governments and saw that they still owned businesses, businesses that;
- paid no tax to me
- businesses that competed with the private sector
- businesses that were in many ways inefficiently ran
- they paid poor shareholder returns to the state’s counties that owned them”.
Hockey said “well, I will give you an incentive to lease or sell those businesses and take all of the money and put it into new infrastructure. And I will create a pool of money and that pool of money will be a bonus payment to you, if you take the political pain of doing it.”
He argues,” at the end of the day, the federal government has to deal with boa constrictor level of state planning legislation and state environmental legislation”. He goes, I quote “the arms collected to the body that’s collected, connected to the leg”. and if we build one-off infrastructure who knows, whether it’ll meld up properly and the other infrastructure that needs to support it.
Let’s hope that his head is collected, connected to his shoulders. He tells us less than half of the states took-up his offer, he goes “thank god”, the biggest state New South Wales, which has Sydney did. Hockey said, “We can’t be the lazy brown dog, we need to be there, and we need to be able to compete particularly with the fastest growing region in the world.
He said, “our politicians were able to convince, not always but, in many cases successfully convince the public that their poles and wires would not be sold or picked up by overseas investors e.g. Japan and China. However, this is exactly what they did, and those services and jobs went overseas.
The strategy that Mr Hockey concocted was to sell the positives whilst convincing the people that whatever sacrifice you made to get the positive is worth it. In my opinion, we are still waiting to see the positive side of all these infrastructure projects right now – the projects are a huge inconvenience, with a lot of projects running up to 12 months behind already.
In contrary, one day Sydney can expect to have a brand-new railway, that is going to get commuters to work faster and (somehow) this will reduce the cost of doing business. But, the biggest joke was his comment “Australian’s can expect to also get faster internet”. hahaha Then he brushed off any judgment by saying, “It’s not always a simple solution often sometimes businesses don’t do well in infrastructure; nothing you know could be better illustrate that then the Indiana toll road where the first purchaser and builder went broke”.
Another example is the “The Sydney Harbour Tunnel” it went broke twice and you know “commuters didn’t notice any change at all”. It was the banks that took a haircut mainly because the intermediaries massively overestimated the amount of traffic, so be it. if the banks take a hit, do you think the electorate is really concerned, do you think the commuters are worried?
Apparently, independent economists and commentators who have analyzed our alleged budget crisis concluded that it is exaggerated. But still, almost every day, Australians are reminded by the Abbott Government that “we” are borrowing $1 billion a month just to pay the interest on government debt. It is also alleged that the annual cost of servicing through foreign loans the $200 billion in unfunded superannuation liabilities is in the billions, and that Australia’s banks are a “key conduit for foreign capital into Australia with a critical role in financing Australia’s current account deficit.”
But who exactly are the lenders to our state and federal governments and to Australian banks? For what periods and on what conditions? At what interest rates? And how much sway can the lenders exert over government policies and agendas?
So far, as of 12 May 2017, two government assets have been privatised. The most recent privatisation is the 99-year lease of a 50.4% share of Endeavour Energy.
On 11 May 2017, the NSW Government announced that a consortium led by Macquarie Group’s infrastructure arm had been successful in securing the tender for a price of $7.6 billion.
Along with Ausgrid and Transgrid, the lease of Endeavour Energy represents the final of the three “poles and wires” sales – a key policy of the Liberal/National government in the 2015 State election.
NSW Government will retain a 49.6 per cent interest in Endeavour Energy and will have ongoing influence over operations as lessor, licensor and as safety and reliability regulator.
The other privatisation is the 35-year long-term concession for the titling and registry business of Land and Property Information (LPI). The NSW Government first announced its plans for the LPI in May 2016, saying that net proceeds from the transaction would be invested in new infrastructure.
On 12 April 2017, LPI was leased to a consortium composed of Hastings Fund Management and First State Super for $2.6 billion. The NSW Government plans to invest $1 billion of the proceeds into upgrading Parramatta and ANZ Stadiums and refurbishing Allianz Stadium.
The video is located at https://bipartisanpolicy.org/events/putting-p3s-to-work-in-the-united-states/
Mr Hockey, the former Treasurer of Australia in the Abbott Government from 18 September 2013 until September 2015, when he resigned from Cabinet after refusing to work under an offer made from the incoming Prime Minister, Malcolm Turnbull.
BCP – The Bipartisan Policy Center is a non-profit organization that combines the best ideas from both parties to promote health, security, and opportunity for all Americans. BPC drives principled and politically viable policy solutions through the power of rigorous analysis, painstaking negotiation, and aggressive advocacy.