Pawning the Family Silver !

High finance is not something the ordinary citizen understands but - hopefully - the government people who control our finances know what they are doing.   The only problem is that simple minded folk are coming to believe that " finance " really means pawning the wealth earlier generations generated for this state.

It all started with what seemed like a very reasonable proposition.  We badly needed a decent road system to overcome the ever slowing traffic flow in Sydney and the public transport system was not up to scratch.  It was argued that if we sold the means of producing and distributing electricity the billions of dollars it would provide  would pay for this upgrade.

Unfortunately, Newtons law applied.  Work is now well advanced on a splendid arterial road system of widened roads and new tunnels and we have not only returned trams to the streets and complimented them with a brand new metro system to speed the working public to their jobs.  But, of course the investors who bought the electricity system and the poles and wires need to also make a profit, and somehow the price we pay for electricity has gone through the roof.

One of the peculiarities of the road system like the West Connex is that despite it being financed from that electricity sale, the public will still be charged a toll to use it.   What is even more peculiar is as fast as it is being built, it is being sold off to other investors.

The original concept of using tolls to finance roads worked on the principle that this was a temporary charge which would cease once the road was paid for.  The difference now is that another group of investors will pay billions to have toll access to that road and the toll will bring them a profit over a very long period of years.

We now hear that there is doubt about what investors may be prepared to pay for a fifty-one percent purchase of the toll rights for the West Connex.  The final cost of construction remains an unknown factor, but sixteen billion has been suggested as the likely outcome.  It is suggested that this may be sold for a mere five billion dollars - and the lease period may be extended from 2026 to 2060 to sweeten the deal.

The reason given for this lease extension is doubt that  the traffic using the road and paying a toll will be lower than the original estimate.  It seems that nobody took into account how those new trams and the new metro will lower the number of people who choose to drive their car on the daily commute.  The road system and public transport are actually in competition with one another.

Of course, the sale of the West Connex will mean the government is again flush with money, and once again we can expect more wonderful plans of how new infrastructure will improve or lives.
Unfortunately, all this sounds like a new version of the " magic pudding ".   It creates the illusion of a generous helping for everyone - going on forever.

Reality is a little different.  Access to these new improvements comes at an added cost !