Treasurer Scott Morrison has copped a certain amount of ridicule for drawing a distinction between “good” and “bad” debt, but I think most of us can relate to what he’s on about.
“Good” debt is debt that can be justified by the fact that it’s money being spent on nation-building in whatever form, like construction of vital infrastructure to generate jobs and economic growth.
“Bad” debt, by comparison, is debt that is racked up month after month on recurrent expenditure in excess of budget income.
It’s like a farmer going to the bank to seek a loan for a new bore, or tractor, or woolshed, as opposed to an increase in the day-to-day overdraft to cover an unsustainable level of outgoings. In the budget, Morrison announced funding for the Melbourne-to-Brisbane inland rail link, the western Sydney airport at Badgerys Creek, and possible buyback of Snowy Hydro from the states.
All are clearly worthwhile projects that will deliver lasting benefits to the nation, and that wouldn’t occur unless the government stepped up to the plate. Some have argued that the government shouldn’t be getting involved in Badgerys Creek, because the fact that Sydney Airport Corporation didn’t exercise its right to take on the project meant it was a dud.
But that logic presupposes that government spending on infrastructure can only be viewed like a commercial investment – putting up money to derive a cash return, as if it were buying a farm, or a factory.
As the federal Minister for Urban Infrastructure, Paul Fletcher, wrote in The Australian, “governments have an interest in not only the specific financial return to be earned from the asset but also the broader economic benefits that it will generate”.
Hence, Badgerys Creek will provide a huge boost in jobs, related developments and convenience for western Sydney, just as the inland rail will be a boon for regional communities and freight movement.
Similarly, the Snowy Hydro expansion will help alleviate the energy crisis confronting the eastern states. As others have noted, the fact that governments rack up public debt to build things like roads, railways and airports doesn’t mean they can’t later sell them to private owners, once their viability is established. But I’m one of those old-fashioned people who believe certain pillars of infrastructure should never be sold off to private ownership – things like ports, roads, rail networks and electricity grids.
And I’m absolutely at one with Dirk Veersema of Inverell, whose recent letter to The Land lamented the Nationals’ silence on Premier Berejiklian’s cavalier flogging-off of the NSW land titles registry. The land titles registry is the sacred record of our colonial settlement and property ownership history. It’s like the family bible, not something to be turned into cash for more Sydney sports stadiums. First it was the Lands Department building in Bridge Street, and now this!
- Peter Austin