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Victoria’s private transport model failing

Jul 15, 2013News

Victorians paid more than $2.6 billion in subsidies to private companies running the state’s public transport last financial year, with less than a quarter of that going back into the public purse through fares.

But despite the obvious flaw in the private system governments around the country, including NSW, seem insistent on moving away from a state-run system and to privately run operations.

Victoria’s public transport system was sold off to the private sector in 1999 under then Premier Jeff Kennett. At the time, Kennett said that subsidies would fall steadily and eventually reach the point where transport was generating revenue for the state.

He estimated that by this time, 2013-14, the state would be making the equivalent of $20.05 million.

One reason cited for the failure of the privatisation of the system in Victoria is that Premier Kennett had already made deep cuts to the system.

Monash University professor of public transport, Graham Currie told The Age that the model was doomed from day one. ”They sold the international franchisee a dud because they’d already stripped the costs out,” Professor Currie said. ”So in many ways they ended up bidding on stuff that wasn’t feasible …”.

Governments’ move to privatise is also incredibly unpopular with voters. A recent poll conducted by Essential Research showed that almost 60 per cent of people think that having public services owned or run by private companies is a bad idea.

When specifically asked about who – private companies or the government – would be better at running of trains, buses and ferries, just 25 per cent of people said the private system.

And in a poll conducted by Melbourne newspaper The Age, 90 per cent of Victorian respondents said they believe that public transport privatisation has not worked.

So why then does NSW Premier Barry O’Farrell seem so insistent on following Kennett’s failed attempt and privatising NSW transport? It’s hard to believe that it could be for the good of the people of the state.