A big reason why people say the Iemma government should be in trouble in New South Wales – despite the evidence of the polls – is its woeful performance in relation to public transport.

So it was not really surprising this week to see the Victorian government, with only slightly less serious problems, disclaim any intention of taking more responsibility for them.

Transport minister Lynne Kosky told The Age that the government would probably leave the running of Melbourne’s public transport system in private hands when the existing contracts expire next year. “Do I want to run a train system?”, she asked. “I don’t think so”.

Her comments have sparked controversy within the Victorian ALP. But confusion about the issue is spread by the common habit of referring to the existing arrangement, introduced by the Kennett government, as “privatisation”, when in reality it’s just a franchising deal.

In a genuinely privatised system, Kosky’s attitude would make sense. If you sell off an operation, that’s it; you’re no longer responsible for it (you may have a regulatory responsibility, but that’s a quite different thing). But if all you’ve done is contract out the management, then you can’t avoid ultimate responsibility.

Of course governments are no good at making decisions about which trains should run where. But somebody has to make those decisions, if only by default. The market can’t, because there’s no competition: companies can compete for the franchises, but they’re competing to the government, not the public. And once they’ve got a contract, that’s it.

The lesson from 20-odd years of Australian experience is that compromises between public and private ownership don’t work – they deliver the worst of both worlds. Hence Victoria has seen an endless round of buck-passing between the government and the franchisees.

The logical way to privatise public transport would be to decide how much the community is prepared to subsidise it, and then offer that subsidy on some per passenger/kilometre basis to anyone who wants to enter the market.

Then let competition determine which services get run at what frequency and price – subject, of course, to the same sort of safety and environmental rules that all businesses have to comply with.

If the Bracks government doesn’t have the stomach for that, then it should consider taking it all back under public control – and perhaps find a transport minister who actually cares about running trains.

Peter Fray

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