Public Infrastructure – Are we still a ‘fair go’ society?

756e4a1758e0160010da073e24c32a44(1)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?

4 Thoughts on “Public Infrastructure – Are we still a ‘fair go’ society?

  1. Lorraine on August 22, 2016 at 8:26 pm said:

    Very interesting topic. Both sides of the argument are relevant. The issue is funding.

    Unfortunately Australians tend to want full service without tightening their belts to pay for it.

    Me personally – I would rather pay a little more tax to keep our way of life. Unfortunately others, who want it all but won’t pay, are forcing privatization and possibly higher prices in the long run.

    • The cultural element is important. As Lorraine suggests, many people do not like the idea of paying extra for infrastructure, believing that their taxes are sufficient and new infrastructure should be provided from that. This tends to encourage a ‘user pays’ mentality in elected officials, as it annoys a smaller segment of the population and is, on the surface, a good argument, easy to privatise. What is often overlooked is a comparison of the total cost to the community of (a) private or (b) public/private partnership or (c) government provided infrastructure. Eventually we all fall under the net of increasing numbers of privatised services, so any aggregate shortfall in services, or increased long-term expense is a public burden.


  2. Patrick Whelan on September 9, 2016 at 3:18 pm said:

    I saw on LinkedIn the other day a post about a shopping centre development that was replacing “High St,” i.e private infrastructure acting as public infrastructure. It is a very interesting and I think appalling proposition. People can be excluded from a shopping centre simply because the owner doesn’t like the look of them. I have seen that. The same people have a perfect right to be on High St. So how can private, introspective infrastructure replace public outward looking public high street?

    This is something of an extreme version of “user pays,” but is a serious erosion of our cultural norm. It is really hard to shop on High St now as the shopping centre is squeezing the High St traders out. But where is the community hall? Where is the senior citizens centre? Where is the essential infrastructure that supports society? Nowhere. Only shops. Is that the new High St? If so, user pays is being pushed to the extreme.

    • I agree. Private public-infrastructure is often separated from public infrastructure by both physical and commercial barriers. Some Public–private partnerships ( seek to address this and there is a trend for locating library facilities, etc. in commercial centres. This has an impact on government, creating a need for “infrastructure negotiators” rather than designers, maintainers and creators. I see this trend of commercial public infrastructure continuing; the question of governance of private public-infrastructure is important.

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