Victorias Neverending Debt Spiral

[red750]

News today the State debt will blow out by a further $840,000,000 due to costs with the Suburban Rail Loop, and an email today from the local member, John Mullahy MP, ALP, stating that the tunneling machines to create the loop will arrive in 2026. How much will the bloody thing cost before it opens? I t has already been reported that it fails cost benefit scrutiny.

 

[Jerry_Atrick]

It's $840m, not $840bn. Will take the total cost to $15bn (https://www.theage.com.au/national/victoria/metro-tunnel-blowout-to-cost-taxpayers-extra-840-million-20240926-p5kdqu.html) . Since when have major capital works, especially in government, come in on budget and on time?

 

 

[Jerry_Atrick]

Mind you, this is the photo from the article:

 

Jacinta Allen is quite apt at giving us both the bird and the two fingers 🙂

 

Edited September 26 by Jerry_Atrick

[pmccarthy]

Selfies! Idiots!

[red750]

Meanwhile, she's in India.

[spenaroo]

yeah, different to what I am hearing,

ton of government contracts cancelled.

basically halted the economy in Victoria at the moment.
(I work in Hydraulics - everyone has swapped from an upgrade mindset to a maintain what they have - cancelled orders on new equipment etc..)

Edited September 26 by spenaroo

[onetrack]

Jerry - Peter wrote $840M, not $840B. The problem with Govts spending big on large projects, is that it's rare that the cost/benefit returns in the long-term, ever match up with the initially-projected figures. 

Then the project becomes a millstone around the taxpayers collective necks for decades to come - and long after the politicians who incurred the scheme and the costs, are gone.

 

I can recall that the loans taken out to finance the construction of the railways in W.A. in the 1880's to the 1920's, were still being paid down in the 1990's. Many of the initial loans were interest-only loans.

The only reason these loans were able to be serviced was because of the amount of gold the State produced. When gold mining slumped, wool and grains and other agricultural exports usually rose to compensate.

 

Victoria has long been dependent on a large manufacturing base to produce its wealth. I don't think that manufacturing base is anything like the size it used to be, and I can't see any high-tech manufacturing providing the level of State income that's needed to service large debts on public transport infrastructure, because public transport is always a loss-making exercise.

Add in a loss of Govt revenue from declining fuel excise, as a result of a major increase in EV's, and the State Govt in Victoria will be looking for a whole new raft of taxes.

[old man emu]

2 minutes ago, onetrack said:

I don't think that manufacturing base is anything like the size it used to be,

I recently watch a video about the restoration of a 1920 electric radiator heater. The radiator was made in Australia. I've seen other video of restoration of tin plate toys that had been made  in Australia. During WWII Australian manufacturing industry ran at top speed. Just after he was demobbed, my Dad worked in the foundery of a company that made plumbing items like taps and such. Actually, during the first 50 years of the 20th Century, manufacturing in Australia was growing steadily considering the small population. 

 

I reckon that growth was knocked on the head by Menzies' anglophilia. If it wasn't British it was no good. Australia simply became another British-controlled colony for the production of raw materials for countries that had the foresight to rebuild after WWII. Now we have an economy that is based on primary production and tertiary "industries" such as finance and education. We don't have secondary industry worth a damn. 

[spenaroo]

yep,
our manufacturing was on the decline.

but really the death of the car industry was the cornerstone.

It was the trade teaching center - oh how woefully Tafe has failed since

 

So many industries were built around that with parts manufacturing (plastic molding etc...) that now could have been revitalized and used to expand.
but there is no equipment or knowledge left to re-start it.

I still think it was a very short sighted decision by the government of the day.

the death of local car manufacturing was for a 100 million dollar subsidy...

they gave 285 million in financial relief to the airlines.

 

but we are also to blame, We have a race to the bottom mindset with prices.

if you go into bunnings and there is a $50 local made shovel, and a $20 import, which one sells more?

how much chinese product floods the market because price is the #1 driver

We could process the Ore here - but China and other markets want the "waste" because they use it in other products

Edited September 27 by spenaroo

[pmccarthy]

We export raw minerals mainly because Australia self-imposes industrial, environmental and "net zero" regulations that other countries don't have. I don't see that changing. As everyone knows, we have (for example) the coal, iron ore and fluxes to make iron and steel and once did at several places, now the remaining one at Whyalla is threatened with closure. Closure will be blamed on costs, but we have the cost environment we have chosen. 

[old man emu]

It's a farce that a country of 27 million with a  population density of 3.38 people per square kilometre is hamstrung by a minute proportion of that population for whom any sort of human activity is tantamount to deforesting the Garden of Eden. These are the same people who create their equal share of pollution, probably without thinking of the unintended consequences of the simple fact of living. It is an undeniable fact that whatever a living thing does creates pollutants, and I include bacteria, fungi, other single-celled organisms, plants and animals amongst those polluters.

 

I wonder if those people consider the amount of pollution involved in the making of their mobile phones and computers with which they communicate; or the pollution involved in producing their daily cup of coffee, or plant-based vegetarian foods. 

 

But I feel it is a hopeless task for the majority to awaken those people, simply because the majority is heavily occupied in keeping body and soul together through hard, often mind-numbing work.

[Jerry_Atrick]

4 hours ago, onetrack said:

Jerry - Peter wrote $840M, not $840B.

Thanks, OT; apologies, @red750; 'twas an honest mistake.

 

Somehow, I can't help but think Abbott and Hockey had something against Vic and SA. It was bloody-mindedness to do what they did as their gripe was, as I recall, just with GMH and where they located their R&D that claimed the R&D tax credit. However, it is always more complex than a single issue and the holes in the Swiss Cheese probably aligned on different fronts - but I can't recall everything. What I do recall is both the left and right of politics, the academics and business people were dead against it, but the Abbott/Hiockey government pursued it dogmatically. In the end, though, I think  it would have happened anyway as in the late 2010's global manufacturers were consolidating and pulling their regional manufacutring back home.. The Australian car market operating in a relatrively small market and expensive cost base probably would not have survived anyway.

 

I don't think there is appetite to build an automobile manufacutring base in Australia. H2V tried but haven't got far, and it is useless competing with the bottom feeders - innovative, high-end stuff is required, but that is bog outlay and huge risks. Most of the British iconic manufacturers with a alrgeish market are all foreign owned. I think Mclaren is still British owned, as is Cateram, Morgan, and Noble.. But Mini, Land Rover, Aston Martin and the like are all foreign owned.

 

2 hours ago, pmccarthy said:

We export raw minerals mainly because Australia self-imposes industrial, environmental and "net zero" regulations that other countries don't have. I

I believe those cheap and fixed price exports of gas to China were done by the Howard government - long before Net Zero was in. And we have been exporting our natural resources in quantities well over domestic use for many decades. I seem to recall pig iron and Menzies, and I don't think Net Zero was a thing then. In fact, the net Zero would see us stopping the export so as not to continbute to emissions generated overseas using Aussie resources.  The doemstic consumption of these resources has fallen away because of the drp in manufacturing which was acconpanued by, hang on.. the destruction of the car industry, which has had many other manifacuting industries hang off its coat-tails. That is why other countries, inclluding China, subsidise it still.  If your manufacturing base drops away, people still consume and the mining companies still have to sell their resources somewhere. So, we export out resources and import the finished product, as we have been progressively doing since the 60s at least.

 

 

[onetrack]

When we had a big local manufacturing base, it was well-protected with major levels of tariffs. It was Whitlam who dismantled all the tariff protection for Australian industries and thus left them exposed to the "global manufacturing order".

Car manufacturing is a horribly expensive business to be in, and you compete with huge nations and huge manufacturers who all have the advantage of large population bases and large markets that are easily accessible.

 

In the 1930's to 1980's, Australia did alright out of manufacturing vehicles - because shipping in imports was costly (due to smaller ship sizes), and tariffs made imports expensive.

Our local vehicle manufacturing was protected and subsidised, and we even managed to export quite a few vehicles to nearby countries.

 

But the value of the Australian dollar was always a problem, it also fluctuated widely, meaning it was difficult for manufacturers to plan very far ahead. Add in the ever-increasing industry restrictions, compulsory safety features that were legislated for, vastly increased levels of manufacturing sophistication - and a small local market, with export-potential countries always a long way away, and often with limited purchasing capacity as well - and Australia was always behind the 8-ball.

 

A lot more could've been done to assist local manufacturing, but easy money and big profits, in the form of property development, financial industry investments - and retailing, most of all - have all resulted in the money gravitating to these areas, rather than the high-risk areas of product development, marketing and production.

A few Australian industries have taken advantage of overseas manufacturing for components for their locally-produced products, but they still always battle with trying to acquire funding for manufacturing -  and also face the constantly-depressing fact, that no matter what you produce, China can produce it in volumes 10,000 times higher than you can, and at a fraction of the cost.

 

Edited September 27 by onetrack

[Bruce Tuncks]

good stuff onetrack...  but my impression was that wa came late to the federation, and it held out for the railway line to do this...  do you agree?

[Bruce Tuncks]

PS. I bought Australian cars for as long as I could, from a chrysler Simca to leylands to various holdens to a ford falcon. I wonder though if the companies concerned ever made money. Even so, I would still like to be able to buy "designed and made in Australia". My Jabirus are all that is left.

[old man emu]

39 minutes ago, Bruce Tuncks said:

chrysler Simca

Some car, that Simca!

[onetrack]

Bruce - Yes, you're correct there, W.A. was the last State to join the Federation. But the State was overwhelmed by the number of Victorians digging for W.A. gold, and they swung the vote in favour!

W.A. was going to be left out of the Federation, the Eastern States had already decided that! We could've been an independent nation today, imagine that! You'd need a passport to visit us!! 🙂

 

https://exhibitions.slwa.wa.gov.au/s/federation/page/reluctant#:~:text=On 31 July 1900%2C Western,union with the eastern colonies.

 

Re the railways, I was referring to the West Australian Govt Railways, when I mentioned railways. The Trans-Line is, and always has been, owned by the Commonwealth Railways, and there was only one private railway operator in W.A. - the Midland Railway, which was a British company that built a narrow-gauge rail line between Midland and Walkaway, about halfway between Dongara and Geraldton.

 

The Midland Railway ran up substantial losses over many decades, and was eventually sold to the W.A.G.R. in December 1963.

 

https://en.wikipedia.org/wiki/Midland_Railway_of_Western_Australia

 

Edited September 28 by onetrack

[facthunter]

It's easy to lose money with RAIL.. Nev

[spacesailor]

Australia has the raw materials,  that we export .

Our manufacturer's have to buy those same materials back ( at inflated prices ) to build aluminium ' tail wheels '  for our " general aviation " that are hit with exorbitant overseas pricing. 

Our government will never help to lower prices .& lessen their GST coffer fillers.

Has anyone priced a billet of aluminium from Gladstone Queensland. 

Then figured the number of said wheels per billet .

spacesailor

PS. : one (state) refused to join that federation. 

Western Australia  in , who was out .

[nomadpete]

7 hours ago, onetrack said:

We could've been an independent nation today, imagine that! You'd need a passport to visit us!!

Ya mugz! Ya nearly got that during covid19.

[nomadpete]

7 hours ago, facthunter said:

It's easy to lose money with RAIL.. Nev

Financially, Railways are a lot like boats.....

 

Gov't spend gazillions on roads and call it 'investment'.

 

Anything they spend on railways is  announced as 'subsidising'.

 

But we all know which infrastructure is the cheapest way to move large amounts of freight over great distances, don't we?

[old man emu]

In Australia, the initial construction of railways had to be funded by governments - at the time, colonial governments with the approval of Westminster. Despite the money from gold, the economies of the colonies were not big enough to entice private investors to build and own railways as happened in the USA. So the colonial governments built the railways and retained ownership of them. Then, in the usual way that governments handle valuable assets, they let the railways deteriorate, resulting in the closure of many routes. Where the routes could not be closed - for example metropolitan lines - the government simply had to subsidise their operation and cut operating costs as much as possible.

 

That's why I see the daily State Rail bus running along the highway between towns where once there were functioning stations. Each day there is a road coach service from Dubbo to Lightning Ridge or to Broken Hill, and they run with plenty of empty seats. It's even rare to see a train of grain cars loading at railside silos that once were hives of activity during harvest time.

[Jerry_Atrick]

Australians are so conditioned to use their cars when they don't need to. Even taking the train or tram to work was not, when I was starting out, seemed the second choice, only used when the inconvenience and cost of running a car far outweighed that of public transport. I guess if your work was in the city, it was more palatable to take the car than public transport. I recall my father working in Collingwood, a short tram ride from the city, and taking the car rather than the train and tram - which would have been quicker most times. 

 

When I stated work, I had a car and drove to work in the city. Although the early bird car parking was cheap, the train would have been half the price of the cost of the convenience of sitting by oneself in a traffic jam, taking a lot longer to get to and from work; and heaven forbit of there was an accident on the way. And it was never really questioned - it was the norm. Yes, there were people who commuted to the city by train or tram; for tram, it was the ones who usually lived close to the city; for train, the cost and inconvenience of the car seemed to have to far outweigh shortcomings of the train or tram. I know Melbourne had some buses.. just can't remember them. 

 

When I came to the UK.. I didn't have a car, but that is for two reasons; first I lived right around the corner from the office, and living in Richmond is nice and self-contained. Also, the office was full of mainly US expats, so the social life was vibrant without having to go into London. Second, I used to travel a lot with the job (estimate approx 9 months away - mainly in the US and central Europe) out of the first year - so was based close to work and play wherever I was.. And just got a taxi if I needed to go anywhere. 

 

But, when I got a job in London city, that changed, and the culture shock of public transport being the norm hit me like a brick. The district line, of which my stop was on, was the worst maintained and had quite old rolling stock. I was on the last stop of the line, so always got a seat, but jeepers did it get rammed full of people. And, signal failures were the norm (they used some resin relays encased in a vacuum still), causing long delays at times. Having said that, I relished only waiting up to a max of 5 minutes for a tube.. .Imagine that in Melbourne - only 5 mins between trains (except to Richmond). But, one quickly got used to it, and if I just missed a tube, and had to wait four minutes, it got frustrating! Then I discovered overland trains to Waterloo and an extensive tube and bus network,  though buses, even with dedicated bus lanes, get caught up in traffic and can be slow - a bit like the trams on Sydney road from Coburg to Brunswick. 

 

Now, I take the car to London from home only because the train is so expensive, being privatised. The minimum it will cost me for the times I travel is £180 (although once I saw £140).. All in costs for the car including petrol, maintenance, depreciation, insurance, rego, etc. is about £100. I can get to Cyprus from Exeter for about £150 (although in holiday season it gets up to £300). And of course, from London airports it can be as low as £75.. And that particular train company's reputation for reliability is questionable at best. Privatisation does not necessarily make a monopoly run for effectively or cheaper. Train companies have been re-nationalised here and the service has been better because the government (even under the conservatives) have run them as statutory authorities and can hold them more to account.  Too early to say if it will continue under Labour. 

 

When I get back to Melbourne (if we can ever flippin well finish this refurb and sell the bloody thing), as I have said before, I have no intention of getting a car. I get for the outer burbs, you need one, especially if you want to go anywhere other than the city. But, our intention is to save on a car and spend more on a property, so we intend to live inner burbs with great transport links and in the odd necessity, a taxi ride (will never use Uber). If I want to go away for a weekend, booked well in advance, car rentals are very good value for money. Plus my brother has a spare car from one of his daughters that now lives out here - and now complains when the tube wait is more than two minutes. Her car is OK for short trips and if I want to go fishing (I cannot wait to go fishing again). And the inter-city rail - max $10.50 each way is a steal. How much in petrol would I spend going from Melbourne to say Bendigo, Ballarat, or Shepparton and back? Darned shame that Tocumwal (which is NSW - just) no longer has passenger services. 

 

Of course, there are disadvantages to public transport. First, they don't go everywhere you want to; segments offer poor or infrequent services; they can breakdown, just like cars, at the most inopportune time, and sometimes other passengers behaviour or personal hygiene are less than acceptable. I once took a train from Melbourne to Traralgon as my car was being serviced at the time and I worked in Traralgon - and I sat next to an o elderly lady who's flatulence would rival a large bloke eating baked means and drinking Guinness for a week. 

 

1 hour ago, old man emu said:

That's why I see the daily State Rail bus running along the highway between towns where once there were functioning stations. Each day there is a road coach service from Dubbo to Lightning Ridge or to Broken Hill, and they run with plenty of empty seats. It's even rare to see a train of grain cars loading at railside silos that once were hives of activity during harvest time.

I would think inter-city coaches are probably not too bad, because highways in Aus are (or were) not terribly congested with traffic. Of course, they are slower than trains, but still acceptable. So, where I see, say a rail replacement, I am not too fussed as I would be here where there are 60m people in a country only 7% bigger than Victoria.. Roads and motorways are always getting congested (though less so since Covid).

 

Edited September 28 by Jerry_Atrick

[onetrack]

When we travelled around Spain, France, Italy, and Greece during the period from 2010 to 2014, we were impressed with the level of public transport in all those places.

We travelled by hire car as well, but the trains and coaches were very good, and surprisingly new, in most cases.

 

Unfortunately, vast distances and the relatively small population of Australia means we will never be able to match the public transport of Europe and the U.K.

However, the Labour State Govt here has just invested mega-billions into extending and upgrading the rail network, and we are possibly reaching a level of superiority to the other States as regards the city train network.

But the country rail services are non-existent. However, we do have large 3 axle road coaches that are Govt-owned, and they provide a reasonable level of road bus service. The private coach operators here have virtually all vanished.

 

Greyhound used to run road coaches all around Australia, but cheap airfares wiped them out. They have recovered a little, but are only a shadow of what they once were, and they no longer service the Left Coast, apart from a service to Kununurra and  Broome, from Darwin.

 

Edited September 28 by onetrack

[Jerry_Atrick]

For a country as large as outs (33 times the size of the UK; 1/2 the population), it is a complete waste to try and emulate the public transport system there. However, they could try in the US. 

 

I consider airlines one of the types of public transport. I buy a ticket as can any other member of the public, and I board (with a bit more faff to get there and get onboard), and I get taken, along with other members of the public to the destination. 

 

The selection of the mode of public transport, or private transport to get me from A to B will depend on cost, time, and necessity. If I am going a bulk Christmas shop, public transport is not going to be practical, for example (although of course, online shopping is changing that, too). 

 

I choose the car over here because it is far cheaper and I am happy to wear 6 hours/week driving, because it actually gives me time to listen to lectures uninterrupted, so not entirely unproductive (I can't concentrate fully on them, but I get the gist). 

 

Thanks to Spewtin, it looks highly unlikely the trans-Siberian will be part of my transport back to Aus. The plan was train to Moscow, Trans-Siberian to China, then mostly train.bus to Singas and fly to Melbourne. Now it looks like train to Croatia; plane to Cyprus, then Dubai (overnight), Chennai, Singas, and then Darwin. 

 

If I can get fares at a reasonable enough price, Ghan to Adelaide and a train or flight to Melbourne. 

 

Expect it to take about 2 - 3 weeks all up. 

 

Not helping Victoria's debt though... I will fix it when I get there 😉