Public Private Partnerships no 'magic pudding'

That said, the NIFC option certainly seems attractive when compared to the scenarios that have emerged from PPPs in Victoria and New South Wales. The ability of the Commonwealth to borrow at a lower rate than the states, in particular, is a drawcard that heightens the appeal of the overall package.

However, despite the assumption of the CFMEU report that pure public finance of major infrastructure projects is unviable because of a popular aversion to public debt of any form, this ought not be accepted fatalistically.

Fashions come and go, but in the public sphere we must continually struggle to construct what is perceived as “common sense”. If purely public finance remains a more competitive way of building infrastructure then we ought to be struggling to win recognition of this reality as the “common sense” of our age. And we should not forget that dividends from publicly-owned assets can themselves be used to finance further infrastructure development.

Finally, there also remains the option of “wage earner funds” along the lines imagined by eminent economist Rudolf Meidner in Sweden. If implemented along the lines suggested by Robin Blackburn in New Left Review, a levy of 10 per cent on corporate profits - to be issued as shares - could result in a substantial pool of capital to be controlled by communities and unions in partnership. http://newleftreview.org/?page=article&view=2572 This is a more modest proposal than the 20 per cent levy originally proposed by Meidner. http://www.counterpunch.org/blackburn12222005.html Nevertheless, such a proposal still represents a radical option for economic democratisation: opening the way for regional funds to trade existing shares and plough the proceedings into local infrastructure projects. Such funds would provide an unprecedented avenue for popular participation in economic decision making in Australia.

In its offering the CFMEU has pushed the debate forward: beyond the scandals and fleecing of taxpayers that some of our politicians would like to accept as “responsible economic management”.

Nevertheless, when compared to traditional methods of public finance, and when considering the cumulative cost of any tax incentives, governments still need to decide whether or not a National Infrastructure Finance Corporation would provide better value than traditional public finance.

For those who care, contributing in the public sphere towards a movement that seeks to challenge and reconstruct the “economic common sense” of our age is a valuable mission that impacts on all of us as citizens, consumers and taxpayers. As economists and journalists such as John Quiggin and Ken Davidson remind us, though, it is a debate that is far from over.