Secrecy in public policy-making involves the corruption of proper process. Victorians would be horrified if they knew more about the costs of the water desalination contract and the disaster involved in the (apparently bipartisan) determination to enter an equally disastrous contract to build the east-west road link.
Its big drawback would appear to be that it doesn't cost enough. It is clear that the investment bankers and superannuation funds - which have incredible liquidity thanks to compulsory superannuation - are reluctant to invest in government bonds yielding about 4 per cent when they can bamboozle silly state governments into deals that can yield 8 to 12 per cent. They use the bogus argument that states shouldn't go into debt.
It defies logic. The government is paying $650 million a year for a desalination plant for no water. Even now, the government could refinance the debt with long term, 25-year bonds at 4 per cent. This would cost $380 million a year. The net saving would free up $270 million a year - enough to finance the Doncaster railway and to replace 50 suburban level crossings, and leave money to spare.
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The previous Labour government left us with a huge debt when it comes to the Desal plant. The way the dams look currently it could be some years before the good people of Melbourne ever need to buy an water from the plant. Despite this, will are paying a whopping $650m per annum for the right to take some water. An unacceptable financial legacy left by a poorly performing government approaching the end of its tenure. Their time was up.
I love reading Kenneth Davidson. Such a practical thinker.
So why haven't the budget conscious and reportedly financially superior liberal government (arguably a one term government by the looks) keen on adopting Kenneth's idea and refinancing the deSal plant at a time when interest rates are low and going lower.
(BTW Ross Garnaut has just released his new book Dog Days (http://www.abc.net.au/radionational/programs/breakfast/ross-garnaut-dog-days/5093570 which looks very interesting)
The DeSal plant was Labour's poor legacy, the east west road tunnel (if it is built) will be the Liberal Parties.
Refinance the white elephant in South Gippsland and start building projects the people of Victoria desperately need. Doncaster would be a better choice than the east west road tunnel, but the better choice would be a combined metro rail tunnel with Doncaster included.