When a publicly funded asset or piece of major infrastructure is privatized how is this offset to provide equity back to the public? Take a major public asset, let’s call it Sydney Harbor Bridge. This was designed, built and paid for with taxpayers money and then operated by the government for the people who funded it so they can use it. The government then wish to raise money do they privatize it by selling it to a private company for millions of dollars. The private company now charge a toll fee for everyone who now drives across it making millions of dollars and turning it into a good business. So now, how is the public reimbursed for the costs that their tax dollars were spent on? Given the public paid for it to be constructed and now pays to use it with a toll fee, do they get an equivalent tax cut or similar mechanism out of fairness? Seriously asking how this works, so serious answers only please.
In: Economics
They’re almost always either a graft by private actors working along with corrupt governments or a desperate ploy to keep finances afloat to avoid a credit score downgrade from major banks. Yes, nations have a credit score.
It’s sold to us as a capital generating opportunity, but we as the public almost never get back as much as we gave. Whether it’s Canada privcatizing railroads because “we can’t afford to maintain them anymore so we’ll switch to automotive centric planning” only to see our road infrastructure explode by more than what we “save”; or a bridge sold only for people to pay a toll on it to the ones who sold it. Another example is the UK selling critical railroad infrastructure right before an election the Torries know they will lose to tank the economic results and recovery opportunities of the next party coming after them.
Behind privatization, there’s always an elected official with some rich new friend looking to make profit on public infrastructure. Let’s also not forget that the private’s profits are also a huge form of inefficiency as well.
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