Weal of fortune

Comment by Richard Denniss

We are living in the golden age of nationalisation, yet Australians’ imagination for the role of government is at an all-time low.

In the past seven years the Coalition government has committed to spending $50 billion on the NBN, $10 billion on an inland rail line, $7 billion for a second Sydney airport and $5 billion for Snowy 2.0. The publicly owned Australia Post kept the private sector going in recent months delivering nearly 2 million parcels per day; our submarine company, ASC, is gearing up to build and maintain $200 billion worth of submarines for our defence; our “green bank”, the Clean Energy Finance Corporation, has lent out $6.2 billion; and our logistics companies such as the Moorebank Intermodal Company and the Australian Rail Track Corporation play a key role in heavy freight movements around the country.

And that’s just at the federal level. The New South Wales government recently spent close to $1 billion so that it could knock down a stadium and – no kidding – build a smaller one, in part to make the crowds look bigger when people watch the game on TV. There’s never been a better time to promote nation building.

The rhetoric of “small government” conceals the reality that our federal government doesn’t just regularly intervene in markets, it often creates them from scratch. And often with great success. Between them, the Commonwealth Bank, Telstra, Qantas, Medibank Private and CSL (formerly the Commonwealth Serum Laboratories) are worth a combined $300 billion and account for nearly 20 per cent of the value of the ASX 200. Who says governments can’t pick winners.

In the past three months the government has announced $200 billion of new spending. That’s enough to buy back most of the companies we privatised, to build four more nationwide broadband networks or 40 projects the size of Snowy 2.0. If Snowy 2.0 was a “nation-building scheme”, the stimulus packages announced to date must be what? Planet building? But despite this spending, the rules of Australian public debate insist we mustn’t think too broadly or deeply about what we’d like to do with all that money. Debating public spending in Australia is like debating the best albums of all time and only being able to mention those released in the past 20 years, by bands from Canberra.

Prime Minister Scott Morrison’s insistence that the POST-COVID recovery must be “business led” is as economically flawed as it is demonstrably nonsensical. The public sector has already provided a $90 billion line of credit to ensure the privately owned banks remain liquid (but nothing to super funds to help with urgent withdrawals), $300 million to regional airlines (but nothing for Virgin); $95 million for zoos (but nothing for public universities); and $50 million to the media industry (but nothing for artists).

Picking winners, or playing favourites, is what MPS do. Despite what they say, wherever possible they spend public money on the private ventures they like, and don’t spend it on the public institutions they don’t like. In the culture war that is Australian policy debate, funding for the ABC drives up our debt, but removing the local-content obligations of struggling commercial broadcasters saves jobs.

As we saw from the $100 million “sports rorts” affair, the $150 million “female facilities and water safety” infrastructure scheme, and the $1.1 billion Community Development Grants saga, Coalition MPS back themselves strongly when it comes to writing public cheques for private organisations.

There’s a simple reason conservatives spend so much time criticising public spending: it’s the easiest way to avoid having a public debate about what we should spend money on. Obviously the folks spending hundreds of billions of our money on their pet projects don’t have a problem with the idea of public spending, it’s just that their ideas for public spending aren’t very popular so they prefer not to debate them.