Melbourne's public transport and market-supreme doctrines

Deregulation also brought out some unexpected and hard-to-accommodate realities in life. Public services were slow and less responsive, taking time to change and upgrade. Above all, they lost money. Services in the new era, this time in the hands of private operators and providers, present you with another picture, in which company coffers are full, while services rendered leave a lot to be desired. While state governments felt exuberant about relieving them of investment pressure, consumers and the public foot the bill for any service provided. It is to be stressed that services demand quality, not letting customers short-changed. It also does not just mean cutting down on the size of staff, a common strategy of private contractors. In facing routine problems of maintaining public services and utilities, private operators could be even more pressure-resistant and unanswerable to consumer complaints than previous public corporations were.

The last time I rode trains in Melbourne, the system was under a private operator, Connex. There was no discernible upgrading from my previous experience of a state run system in the 1980s, at least in regard to station staff speaking in some accent or other. Train carriages presented the familiar layout of seats, cheap brown covers with stains, and messy graffiti which drew your attention to figure them out. Is the system now punctual or more reliable? Hard to say on the spot, but it was reported that monthly train cancellations amounted to over 500 times in 2005. Delays are common place, on top of usually lengthy waiting time for a train coming next. Another telling sign is that Connex was recently fined by state government for not keeping up with train schedules and causing mounting complaints.

I found a new inconvenience to train users, which is under-staffed stations. At the grand Flinders Station, there used to be a small both at each platform from which station employees kept their guard and answered questions from ticket holders. It is utmost important for travelling crowds to know where they are going with which train. Occasionally people feeling a little lost could make sure they were on the right track through getting answers from these on site employees. I once had a terrible experience in Sydney when boarding on a wrong train (it seemed correct from reading signboards) and taking over an hour to come back to where I started (the train, unfortunately, was an express one and dashed past a number of stations before stopping, so I could get off). At Flinders Station, people simply asked those conductors if unsure. Under Connex, such a helpful post is now removed, and one has to walk up and back to the front gate counter to find and reconfirm the platforms for their destinations. It is common everywhere in the world that public transport providers seldom design their operations from the point of view of end users. They blindly assume that people understand fully and immediately what they offer there, but a traveller would rather ask about directions from a nearby, informed employee in a massive central station. You have to be a regular train passenger, after numerous trials and errors, to confidently board trains of your choice without making enquires. For ubiquitous reasons of improved efficiency, those staff booths are gone, saving some money to the corporation on personnel, replaced by booths selling chips and drinks, bringing in some more money to the same corporation. It seems that the people touch, face to face at the moment of need, has clearly vanished amidst ambitious management goals for larger operating revenues and increased convenience of the operator.

If a system in operation, after privatisation, performs not visibly better but evidently worse, what is the point of installing this system in the first place and paying for its mundane work with the public money? If in a fair comparison and after adequately long trials, the new system does not excel above the old, as promised and desired, should there be the moment of a second thought and for a reversing action to be taken? If a private operation of public transport requires huge public funding to provide passable services at the most, what real, meaningful changes have this practice brought to the state government and the public? With common sense, the underperforming operator should be dismissed, and the system brought back to the hands of the government for further re-organising or open bidding. It is here that the enshrined economic rationalism demonstrated its unrivalled penetration into the mind of contemporary policy makers. The Labour government of Victoria, an economic rationalism convert though less enthusiastic than the Liberals under Kennett, balked at a rare chance of needed corrections. It let an opportunity to take back control of public transport pass, when a private operator exited the contract abruptly, and continued to offer contracts to other private operators. Even if the results of this rerun of public corporation might have generated some difference from under a private operator, in financial, managerial, and customer service terms, the state government dared not to disobey the mighty, trendy doctrine of privatisation across the world and take the pride of undertaking the first policy reversal in the country from private back to public operations. The sheer weight of ideology and doctrine of economic rationalism prevented policy makers from thinking straight and dealing with the matters of daily life with more common sense.

Comparable to privatised rail transport, toll roads around Melbourne are built and managed by Transurban, another private operator. The Citylink networks under Transurban covers a few trunk lines around the city, but there are countless existing public roads and streets outside this toll system. As a result, motorists plunge into sideline streets on daily basis, in order to avoid paying detested tolls. The road systems in Australia, from streets to super freeways, were built by governments, paid for by taxpayers, from the petrol excise, in particular. Motorists did not have to dig more from their pockets for using roads. There was this fantastic, sensational feeling when I cruised along the south-eastern coast of Australia, passing major cities through high quality and sometimes brand new highways, without encountering a single toll booth. That free-roaming experience is unmistakably Australian, unfettered, whooshing, and worry free. This idea of toll roads is a typical American intrusion and has caused quite a stir when it was first introduced. The roads authorities, for example, had to make a promise to motorists of no tolls for a number of years when a new freeway was to be built in Melbourne’s south east.

This toll setting created some absurd scenes. Along a major toll road to the Melbourne International Airport, I witnessed on a number of occasions massive exit to Bell Street by those out from the Airport. Facing narrowness and slower moving traffic along this public thoroughfare, motorists went ahead anyway, showing little desire to take the half empty Citylink toll road all the way to the city centre. Toll roads are to be avoided when possible, and their presence only make other public roads more congested. From those who have to use toll roads for daily work and business purposes, toll operators have collected massive amounts of dues and make their operations pleasingly profitable, as demonstrated in their annual reports. In this public-private relations setting, the private operator has gained handsomely through those business opportunities previously in the hands of the public but now willingly given away by government.

The confidence on the market to do the tricks has not receded, but the performance of private companies in a market economy has been varied and unsteady. It could be disappointing or dismal, or at least not up to the expectation in many cases. Business failures on a large scale are exactly the reason for rescue actions taken by government agencies with public money. Closures of smaller sized companies are common place, even in good times of economic booms. Theoretically, these collapsed companies have themselves to blame and do not affect the public. However, every sizable bankrupt involved sufferings on the part of those dismissed and government actions are required as remedies, for example, the closure of Nissan’s Clayton complex in Melbourne. The high rate of failed businesses at least gives people a clear idea of perils in trusting the perpetuity in operation by a private firm, but this does not ring a bell to those disciples of economic rationalism. Short-term efficiency can be achieved with little doubt, but a continuing steady performance is quite rare.

The aviation industry in Australia after deregulation offers a reference to this point. The national airline of Qantas was the target of deregulation from the beginning. Actions were taken to both open company shares to foreign strategic investors, first British Airways and then Singapore Airlines, and open the sky to more private airlines. The outcome has so far deviated from original plans. Qantas remains the dominant player in both international and domestic markets, except a little wrestling with Virgin Atlantic. A previously capable contender, Ansett, managed to take a cut in domestic markets, essentially the beneficiary of past government policies on a separation of international and domestic markets between Qantas and Ansett, but failed to be viable and met its final fate of downfall in March, 2002. I have fond memories of this little airline not just because its existence in my early years in Australia and company legends around it, but also because the nice public image of an Ansett family member, Bob Ansett, who ran Budget Rent A Car, which provided me with comfortable vehicles for numerous cross-state tours. This airline, along with the Ansett name, has unfortunately petered out of the business world of Australia.

A number of start-up airline companies sprang up under the sky of deregulation. Compass Airline is a particularly exciting example among them. The founder of the airline Bryan Grey was a private businessman and a former chief at a Pacific island airline. Many admired his courage in challenging the big two, his organising skills in assembling an airline from scratch, and perhaps mostly his ability to raise money for the first small air service provider. The airline was equipped with new aircrafts, purchased or leased, and flight attendants put on their coloured formal uniforms for the inaugural flight ceremony. That was a big, exciting occasion in the aviation industry of Australia, to a certain extent a flash back to the remote time of Qantas’ and Ansett’s origins. The way to compete with the bigger fellows was to undercut them, offering low-cost flights to suit target groups of customers. Budget flights suddenly became available in the sky of Australia, with sometimes ridiculously cheap airfares to passengers between Melbourne and Sydney not much dearer than a coach ticket. This overkill perhaps bled the airline at an early stage rather than hurting bigger players. Bankrupt and heart broken, Bryan Grey left the industry and died in 2001.

Other contenders had similar fate, such as Impulse which ran similar budget flights along major routes and was eventually taken over by Qantas. The only exception to this series of failures so far is Virgin Blue, which differs from the above fruitless ventures in a big way, being financially sound with the support from the parent Virgin Air and keeping away from cut-throat fare wars. It remains to be seen whether the Virgin or another consortium of the considerable deep pockets could grab large enough market shares in a massive shake up. In short, throughout deregulation, the established Qantas has managed its affairs much better than the assembled bold private contenders.

There is of course no certainty that a private business would run a public service badly or face a destined failure. It is quite plausible that the market can be much livelier when public sectors make rooms for expansion of private businesses. The observation here is merely that private businesses carry risks of collapsing in their nature, and that the market has no guarantee of success for large numbers of private businesses. A well managed public entity could reach the desired levels of performance as well while shouldering set tasks of providing public goods. If private businesses have shown their shortcomings, incompetence, or disregard to quality of public services, it is time for a fair competition between private and public corporations in obtaining rights of operation, despite the ideological bounds of economic rationalism and market-supreme doctrines.

All things considered, economic rationalism calls people’s attention to the might of the market and has succeeded in making people believe in the power of money. It is an amazing transformation of prevailing mindsets from having confidence in public provisions on top of individual work effort to believing a myth of self made fortunes. Greed is excused as a necessary catalyst for many undertakings, public and private, to be possible and achieving. Logics based on economics drown out other plausible arguments; if you are not happy about certain occurrences in the running of this society, look at those pleasing headline figures and talk to someone who just made some money. This single ideology of sort contains certain truths in life and convinced many that state provisions stayed for too long, and that fresh air and liberalising actions are desired, but it may also prove to be an overkill in reversing the direction of social movement the hard way.