Originally Posted by
Quickstatus Example is SYD.
They thought they could sell it off, Realise the $$$ and SYD would pay tax via their owners. But with aggressive gearing no tax paid.
Now no income from airport and the 5bil spent long ago
That was the stupidest decision of the lot. They sold SYD airport for 5billion and it makes at least that every year.
Governments are just as good as running businesses as private enterprise. If not better. Just hire the right people to tun the business.
When we run out of things to sell we'll just increase indirect taxes.
If you go back to the time of the airport privatisation (when I was in my investment banking phase) there was a lot of time and money spent trying to figure out exactly how much these things were worth. Its obvious now, but not so much back then.
I vividly recall a phone con we had (5 bankers in the room plus lawyers, accountants and the client reps - it was a big table!) with an 'airport expert' from Hong Kong. He was the guru and we wanted to know what he thought of SYD. His clear and repeated answer "
Pay anything!"
"Pardon? its got these X, Y and Z issues ...."
PAY ANYTHING! PAY. ANY. THING. !! PAY ANYTHING!
Well .. that wasn't really what we wanted to hear, so we bid him farewell. The good airports were sold off along with the no so sexy airports, like Hobart.
I've told a few 'war stories' about the airport privatisation process on some of Buzz's wine tours .. come along and I'll share (Such as: "Why would you want to stop the Brisbane Air Train from stopping at Brisbane Airport?"
SYD doesn't actually make 5 Bill a year
JohnK, although MacBank are expert in squeezing lemons, oranges and anything else they get their hands on.
Oh, and governments do NOT run businesses well. There is b-all sensitivity to customer service "We are the government. We are NOT going to go out of business if you don't come back, so tough bikkies" or price "We are the government. If we make a loss here, we'll just tax you more there. I don't care if you shop here or not"
Like I said, capital works for electricity, water, roads etc costs are eye-watering. The private sector can do it, and price for the the use of the specific assets accordingly, or the government can do it, borrow money and make everyone pay and keep you and your family in debt for another few generations.
I wish they would sell off the ABC - but then its just a $1 bill pa money pit, and you couldn't give it away.