Friday, November 03, 2006

Changing times

In retrospect the Victorian election may be seen as significant for indicating emerging shifts in public policy, the focus on water and the renationalisation of rail freight are examples. Interesting to see John Roskam, of all people, criticising Public-Private partnerships, today. Says Roskam:
State governments, burned by the financial disasters of the 1980s, are now so reluctant to carry any debt whatsoever that they rush into any available scheme that promises debt-free infrastructure. Such thinking totally ignores the fact that not all debt is bad. Borrowing to pay for recurrent expenditure is bad debt. Borrowing to pay for long-term infrastructure that benefits more than one generation is good debt. The Victorian Government by refusing to countenance the use of responsible debt is asking current taxpayers to bear the cost of assets that will be enjoyed at no cost by future generations. The growth of a national economy has meant a corresponding decline in the ability of state governments to influence the economic performance of their own state. State budgets still count for something, but they are nowhere as important as they were 20 years ago. State government officials carrying economic functions now have less to do. PPPs have filled the void. Meanwhile financial and legal advisers have, not unreasonably, grasped the opportunity provided by PPPs. Multibillion-dollar projects generate millions in fees.
The left has been doing this for years but he doesn't acknowledge them. Roskam is not unintelligent, and I remember him complaining at the 2004 Australasian Political Studies Association Conference about how boring the Liberal Party was because everyone was over 50 (or was it 60?), but usually his work is partisan hackery, as in his wild overstatements of the level of self-employment (which I refute here). The fact that even he can criticise PPPs is a sign of the times. Will these new times be more favourable terrain for the left?


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