In this post, Geoff Webb picks up on the question of infrastructure access.
The concept of ‘universal service provision’ stands in stark contrast to the ‘user pays’ model which is so often cited as a fair method of delivering services to the community, but is it?
Australians have long taken pride in being considered a fairly egalitarian society with an attitude of a fair-go for all. For many years, this was reflected in public policy and in the provision of essential infrastructure to all Australians, whether they be located in major cities and urban areas or in remote and isolated locations.
The history of telephone connection fees in Australia exemplifies the point, where actual costs for individual connections could be several orders of magnitude higher for a connection in the bush compared to connection in town, but a standard connection fee was charged for both. The community at large was, typically, fairly accepting of the idea that service charges, as long as they seemed reasonable, paid by the high number of users in the major metropolitan centres would effectively subsidise the relatively low numbers of remote and isolated services.
While critical infrastructure ownership and operation remained in government hands, whether at federal or state level, the issue of cross subsidisation was easily managed. Selling government owned infrastructure assets to private companies raises issues around the provision of services to all citizens, particularly those least able to pay. Business does not operate on an ethos of ‘best for all’ and universal provision and, in a country such as Australia,with a relatively low population distributed over a huge land mass, this generally does not equate to maximising profits.
Thus private provision of essential infrastructure presents a serious conflict. The transfer of ownership from public to private interests does not guarantee service levels will be maintained, regardless of the regulatory requirements put in place in an attempt to ensure it does. Invariably, and inevitably it seems, over time, increasing costs associated with the provision of service levels tend to justify the reduction, or at least changes, in provided services.
This raises an important question:
What has the provision of essential public infrastructure to do with financial profit to the provider? If the answer is that it does not, then what is the motivation for business to be involved in it?