As more major electricity assets face sale to foreign investors, will Australia eventually need foreign aid to provide basic services?
So it’s down to this: not only are we a country that can’t run a census (and remember even the Romans could do it) but we could soon be a country that effectively relies on foreign aid to run its biggest state’s electricity system.
While the NSW Government and its army of financial advisers will laugh all the way to the bank if federal treasurer Scott Morrison approves the sale of AusGrid – the nation’s biggest electricity distribution grid – to a Chinese consortium, the rest of us should pause and think about how this changes Australia’s status in the world.
For most of our short life as a nation we have proudly run foreign aid programs to help less fortunate nations with their needs for education, roads, clean water and functioning health systems.
In effect, we’ve been willing to invest in those nations for little to no financial return because they can’t afford to themselves.
Why? Partly a sense of that it’s the right thing to do; and partly as a form of soft diplomacy.
The sale of AusGrid, in effect, could reverse this.
Here’s why: the NSW Government no longer feels it can meet community needs through the normal forms of taxation and fees. It has a big asset in its electricity system but the returns it provides are less than reasonable. Its options are to jack up electricity prices. Or to reduce the costs of running the system. Or to find someone willing to accept the lower returns and give it a lump of cash in return.
Enter the Chinese state-owned enterprise; a front-runner to take up the sale. If Scott Morrison approves a deal, expect new roads and stadiums aplenty in NSW over the next half decade as the Chinese money lands in the State Treasury.
The question, of course, is whether these are needs. Or simply lures to keep an increasingly demanding community off the government’s back.
What next? A foreign government running our hospitals and schools (so we can spend the money on even more stadiums). Or maybe we could outsource the Medicare payments system?
Mr Morrison has a complex decision to make on the sale of AusGrid. He has indicated that national security issues will be part of his consideration – and there’s little doubt the Chinese Government will see a rejection as a sign of Australia’s mistrust of China’s growing influence in the Pacific.
The Pacific version of the Great Game has China and the US positioning for power dominance in this part of the world. Australia sees itself as an honest broker but may ultimately have to choose a side in this diplomatic showdown.
So, how will that work if a Chinese Government agency runs the energy supply to our largest city. What happens if part of its armoury is to switch off the “foreign aid” of investing in a country that no longer wants to, or struggles to, fund its own essential services?
Foreign investment in Australia is a fraught issue – always has been even though our major industries have relied on foreign support.
The grazing industry, the mining industries, the tourism industry and what’s left of manufacturing would not exist except for the foreign seed capital and enterprise that started them.
But these were all start-up industries, not established services traditionally provided by government. And their funders were corporations motivated by financial imperatives, not governments increasing their influence in pursuit of diplomatic (or worst case, not so diplomatic) objectives.
Australia should welcome foreign investment if it is investment for investment’s sake. But not if it’s to serve another purpose. Foreign aid is meant for the needy. And we’re still well short of that.
As to the census, Prime Minister Malcolm Turnbull should stop talking about innovation and the digital revolution and demonstrate how his government can get it right. The census was one chance to do that. And he’s blown it.
Maybe a foreign government can run it for him next time?