My arguments were primarily commercial. It seems to me that duplication of infrastructure, especially in a large sparsely populated country like Australia, lead to economic inefficiencies that must reduce profits. Stuart also had sound technical reasons that to my abstract mathematical mind, looked like technical versions of the same argument.
Sixteen years on and those ratbag ideas are now a mainstream point of view. This is partly because of the huge waste of money invested in dual coaxial cable running past all metropolitan Australian homes – a 2 billion dollar homage to the fallacious altar of competition. It is partly because it is now obvious to everybody, what Stewart and I were predicting and industry insiders like Paul Budde were furiously denying, that it goes against the nature of any corporation to use its monopoly powers benignly.
—–
Professor Ian Lowe recently pointed out that population growth of over two percent per annum results in an every increasing infrastructure bill, because gross domestic product tends to track population growth (more on that elsewhere) where as infrastructure costs accumulate because of the maintenance bill for ageing infrastructure.
The end outcome of this mathematical certainty, is that national governments facing ongoing population growth over extended periods of time, externalise infrastructure costs by privatising the infrastructure.
This, of course, is a short term fix, because the corporations externalise the repair costs by avoiding them and the collapse of the infrastructure inevitably follows.
As we set about privatising the water and energy infrastructure of the nation at exactly the point where our future depends on careful long term management of it, the experience of Telstra should remind us of the dangers.
We need public investment in major infrastructure that takes the nation forward to a sustainable future based on higher energy costs and therefore very expensive water. While it is politically unpalatable to recognise a higher cost of living and a lack of economic growth, it is the only serious plan that will provide a secure and vibrant future.
I only hope I am not referring back to this column in 2026.