NSW Election Special – Assets from the Attic

GLASS PYRAMID ‘EXCLUSIVE’ SEALED SECTION CONTENT

The NSW election is in full swing!

It is getting hard to control excitement levels in the glorious Emerald City as the buzz of the democratic process infects everyone with dazed expressions of what might be bliss. Citizens when shopping, catching a bus or cleaning their teeth barely go a minute without assessing the policies and competing promises of the candidates for high office.

One of the issues that is proving to be a soft spot for the ever congenial Premier Mike Baird is the assurance that all the goodies he is promising to dispense will cost the taxpayer nothing  – beyond flogging off some dusty uncool public assets he found in the attic.

Poor Mike is perturbed to find  that a fair chunk of the public are starting to wise up to the – sell off the public assets – routine, albeit a decade or so after it became the new black.

Certainly most people do get that public services need to be well run and that if something is well run it should be cheaper to the consumer, but having experienced the joys of being gouged, by private companies, to use services once run by the government they are not so easily convinced that privatization is a one way street to Happytown.  

After all, why can’t the adults in the LNP NSW government run the public assets efficiently without selling them? Are they not supposed to be the party of business and economic good sense.  

We have heard a lot about “asset recycling” as though there is some limit to the wealth that can be held by the public.  Mr Baird seems to be arguing that we have reached the public asset ceiling and if we want more public assets we have to sell a few first to ‘make room’.

Yep – nutty stuff and no surprise few people are buying it.

What is really driving the government is that today’s corn fed and focus group nourished politicians (on both sides of the aisle) are simply not capable of explaining the simplest of policies to the public.

Funding infrastructure is not difficult to explain providing one point is made clear to the public.

If infrastructure is effective – say a new big road connecting your house to the city – it will add to the value of your home.  Therefore as the direct beneficiary of this increase in value you should contribute to the cost whether or not you actually use it.  And if you are not prepared to contribute to the cost why should someone contribute (by selling assets they have an interest in) who lives hundreds of kilometers away from the fabled road at the centre of the earth.

That way the cost of exciting new infrastructure can be split between the people who benefit from using it (tolls) and the people who benefit from seeing their chunk of dirt rise in value.  If there are some landowners who don’t want the value of their land to rise and thus don’t want infrastructure improvements that might do that, they can campaign against infrastructure improvements or sell up and move to some forgotten corner of the state where the risk of useful public works is sufficiently low.

Sure, older folk who are asset rich but cash poor may need to have infrastructure payments deferred in the form of a charge against the property with the outstanding payments recovered when they float away to the great hereafter.  But that is just tinkering and is easily accommodated.

Nothing difficult about doing it either.

Just add a small infrastructure charge to the rates and calculate it by reference to the unimproved value of the land. The local council can remit the funds to state government – after a small collectors fee of course.  If the land value rises the amount of the infrastructure charge rises. If it doesn’t rise – the charge stays the same.   Most rates are already calculated this way so a small additional infrastructure charge is hardly a new form of Ebola.

What the public seem to have worked out is that Mike Baird’s great plan is about selling assets that are owned by EVERYONE in the state of NSW to pay for infrastructure for Sydney and that will increase the value of the private property owned by a relatively small group of Sydneysiders – namely those at each end of Mr Baird’s giant road tunnels.

Mr Baird – if you want to build subterranean freeways go ahead but please raise the money by taxing the land that will benefit (increase in value) from those projects (as well as tolls on those that actually use them).  You should have a chat to that nice former government architect who is busily explaining how we can erect gi-normous towers across the city to house the population ponzi that your Federal colleagues (again both sides of the aisle) are so infatuated by.

I am sure he will welcome the idea of taxing the land beneath those massive towers to pay for the freeways and railways that link them together and make them valuable.  Who could possibly argue with such a modest and reasonable proposal.

PS:    Yes I know the ALP were no better than you in implementing a sensible approach to funding infrastructure but we expected so much more of that wonderful smile.

 

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