When governments want to stimulate an economy (or win votes depending on your level of cynicism) the go to method is Infrastructure spending. Build a road, build a bridge, build a stadium. Now I understand that governments are meant to provide infrastructure and essential services, to utilise our taxes in the provision of things that will support the economy. The problem I have is that infrastructure is a blunt hammer and does not create long term employment in and of itself. But do we have ourselves to blame…..?

There was once a thing called a Public Private Partnership (PPP). In theory it was a great idea, governments have land and assets that can be turned into income generating and job creating enterprises if the right strategies are applied and the right partnerships entered into.

Now governments should most definitely NOT be involved in running private enterprise business. They are cumbersome, inefficient and will pass laws to cover their inefficiencies which then destroys private sector motivation and creates monopolies. Even China has worked out this isn’t the best way to go.

However the PPP was an ideal environment in which government infrastructure spending was able to be partnered with private sector equity and efficiency, to produce not just infrastructure, but to produce long term employment prospects.

But of course political point scoring got in the way. Facts were twisted and the old adage “if you tell a lie long enough it becomes truth” came into play. The view that a PPP was selling “Our Assets” was perpetrated and sold as some crusade to save our country……and more than 50% of us (the voting public) believed this simplistic view of the economy, and what are we left with……PPP’s are dead apart from institutional Tier 1 roads and tolls, and governments are left with all those wonderful “Assets” that are inefficient, cost the tax payer enormous amounts of money, produce poor employment and economic stimulus outcomes.

But we haven’t sold out!!!!!

Infrastructure Spending v Job Creation