office of profit after the Crown
the heat of summer was almost upon us. For most of the year the sun
arcs across the sky too low to fall deep into Werrong Lane, but now,
as the days lengthened, it was starting to caress the pavement for
hours at a time. In spite of which, an atmosphere of fear and loathing
pervaded the Brushtail Café. The regular customers huddled
around their tables, shaking their heads over the prime ministers
proposed security legislation and muttering words like draconian,
tyranny and dictatorship.
also muttered about the Cross City Tunnel, the regime of the Roads
and Traffic Authority, its front organization (known as the NSW Government)
and the recently revealed secret deal under which the tunnel consortium
would run the bugger for the next 30 years.
I went down to the café for lunch, angry and confused motorists,
trying to avoid the toll or just find their way to familiar
places were clogging the nearby streets. Nobody was happy,
not the motorists, who were being slugged $3.56, each way, for a couple
of kilometres, nor the public transport users who discovered that,
under the contract, the consortium would have to be compensated if
public transport development hit traffic flowing into the toll booths.
It was a double whammy against the public interest.
do you make of this $100 million payment the successful consortium
made to the RTA? The old retired colonel asked me as I sat down
with my vegetarian pide thingy.
first they explained it as a normal commercial fee for assessing
the details of their contract bid or as a payment for RTA research,
I replied. That might have washed if the payment was $100,000,
even a million, but $100 million nah. Nobody believed the story
for a second, and by the next day the payment was being explained
as a contribution to the relocation of services. That didnt
wash either. Finally the spin doctors just came straight out and said
the payment to the RTA was a business consideration fee
for awarding the successful bidder the contract.
his neatly clipped moustache. Which raises some big questions:
was this fee negotiated? If so, did all the tenderers
offer the same amount? Did the unsuccessful tenderers offer less?
me see if Ive got this straight, said Joadja, putting
my long black down on the table, In effect, it wasnt just
about the consortium bidding for the right to build and operate a
road for public use in the hope of attracting enough traffic and collecting
sufficient tolls to make a profit, the state itself was, as it were,
selling that right to the consortium. Doesnt that mean that
the fee would have to be factored into the cost of the road and the
tolls would have to be higher?
guess so. And in return for the so-called fee, the government shouldered
the political blame for closing roads all over the place so as to
force motorists to fill the coffers of the consortium. You know me,
Im all in favour of charging motorists the full price of the
damage and disruption excessive car use causes, but Ill bet
they didnt put the hundred million towards public transport
development. Ill bet it stayed with the RTA to be used for more
that business consideration fee was being actively negotiated,
that would be a bit like the notorious tax-farming system of ancient
memory, wouldnt it? the colonel mused. You know,
the Roman system of auctioning the right to raise taxes. Some entrepreneur
would bid, say, 100,000 Denarius to raise a million D in the province
of Bovinius. Hed pay the emperor a million plus the 100 thou
borrowed of course and then send his boys out to collect
two million from the subjects.
Hey, wasnt Bob Carr big on Roman history?"
but the Romans werent the only ones. The French emperors used
the system too. It was called tax farming and it wasnt exactly
popular. After the revolution the farmers all lost their
this is a bit different. Its sort of a combination of providing
a public facility thats privately built and operated plus paying
the state a consideration for the right to do so. But I agree, over
time, this thing will surely morph into something more sinister. I
wonder if this type of fee was part of other big contracts, like the
mention that I had a client who wanted to know just that.
snorted. Well think about this: a few weeks ago Bob Carr suddenly
quits, hes followed by the deputy premier and the minister for
planning. Of course theyve all got plausible reasons for quitting.
Oh, and then theres the treasurer, Mike Egan. He quit in January.
Thats the whole top leadership of the state government gone
in a period of six months. Before these contract details leaked, lots
of people were speculating that the mass exodus meant something damning
was about to come out. And now Carrs landed a $500,000-a-year
consultant job with the Macquarie Bank, the major toll-road operator
and probably the governments biggest quote, unquote, business
partner. It stinks.
on top of his generous pension. You know, theres a ban on running
for office if you hold an office of profit under the Crown.
I reckon its high time the former cabinet ministers were banned
from slipping into jobs with major government partners
for a few years.