Privatisation gravy train rolls on

by | Nov 12, 2017 | Government

There’s no work like government work. Look what dropped out of the tree: the guide to the consultants’ gravy train 2012 to 2016. This is just NSW privatisations mind you. The mind boggles at how much taxpayer money has been crisped on other consultants, and in all states.

Unlike the feds, who at least have the decency to disclose their gargantuan consultant fees clearly on the Austender website, finding how much the states flung to the cuff-linked buccaneers of consultancy is not easy, often impossible in fact.

The document of which we speak, a spreadsheet, boasts the anodyne title: NSW Treasury Consultant Expenditure on Key Projects 2011-12 to 2015-16.

Here are a few of the rippers. The “Disability and Customer Care Services Transfer”, read flogging of the state rights to care for disabled people, and an $830 million property portfolio, demonstrates EY suffers no disability when it comes to fee-charging. It picked up $5.5 million, then a further $4.5 million, while mining investment bankers Ironstone Capital Advisory raked in $3.9 million and $3.2 million. That deal is ongoing.

The biggie was the sale of the NSW electricity transmission and distribution assets, some of which went off to the Cayman Islands. This one is dubbed “Electricity Generation Assets Project”.

Goldman Sachs, which can’t even file a proper set of financial statements in this country, got $4.6 million for financial advice, KPMG $4.4 million for tax and accounting advice and Baker & McKenzie $5.9 million for lawyering.

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Then there was another $3.3 million for Goldman in the next year,  and another $3.1 million for KPMG, Baker & McKenzie $6 million, $4 million more for Goldman, plus another $2 million for Goldman. EY was in for $7.5 million in 2015 then another eye-watering $17 million for tax advice and accounting while Allens didn’t miss out with its $6 million and a further $14 million for paper shuffling. Oh, and UBS won $14 million

Privatisation of the ports was a beauty too with the $4.3 billion sale of Port Botany and Port Kembla reaping Morgan Stanley a cool $15 million as financial advisor. PwC picked up $13.4 million and Minters $11.3 million.

The sale of Newcastle Port saw Morgan Stanley get another $7.8 million, PwC $5.3 million and Minters $5.8 million.

Millions also went to PR firms Kreab & Gavin Anderson and Newgate for “issues management and communications” on the deals, which means keeping them out of the media as much as possible, which they did.

These were but the first class passengers on the NSW privatisation gravy train. There were 110 consultant fees all up on this spreadsheet, to those advice-givers noted above, and to many others. Let’s hope the money is well spent … the money from the privatisations that is.

Investigation: social welfare cheats targeted while corporate welfare elite runs amok

ABOUT THE AUTHOR

Michael West

Michael West

Michael West established michaelwest.com.au to focus on journalism of high public interest, particularly the rising power of corporations over democracy. Formerly a journalist and editor at Fairfax newspapers and a columnist at News Corp, West was appointed Adjunct Associate Professor at the University of Sydney’s School of Social and Political Sciences. You can follow Michael on Twitter @MichaelWestBiz.

22 Comments

  1. Avatar

    Michael, what would you estimate is the per hour charge to come up with $9m for EY on the sale of the “Disability and Customer Care Services Transfer”? If we could guesstimate that then we can start etching forward on how inefficient the mass privatisation of public services has become. Concern also needs to be placed at the local council level. Serco is running Melbourne City Council’s Parks & Gardens services. It costs $2000 to get a single drain to be cleared in the City of Maribyrnong. Commercial in Confidence means even councilors cant access the costings. State Premiers (like Andrews) are running around blaming councils for jacking up municipal rates, but few are looking at the cost blowouts such privatisations are placing on the expenditure side of local council budgets.

    Keep up the good work.

    • Michael West

      Thanks Karl, could have a stab at it but who knows how many people EY put on the job – bit like a liquidator I suppose. Wonder if that Serco stuff can be FOIed? That sounds like a shocker. I know they are sensitive about it because when I pinged PwC for charging $10m for that report on the future costs of Australia’s social services, the dept got very antsy and complained to The Conversation, where the story was also published. They fell away when I started asking questions about who did what for that 10 mil

  2. Avatar

    Bit of a bait and switch this. They generally drain the public sector of talent to save on the wage bill. They point to the general perception that the public sector is bloated and ineffective in the public eye and collect their votes. At the same time, the respective departments can’t do their damn jobs, for obvious reasons. Thus, they outsource to all the people that they just made redundant which costs the state more than just keeping them employed.

    A buddy of mine in the Department of Planning always says there are no senior planners left. All MBA’s who outsource all the actual work.

    • Michael West

      Yes, outsourcing has become a disease. Would like an academic to do some solid research on how much it is costing the taxpayer. Public service outsourcing federally has rocketed under this government. The usual candidates are there for corporate welfare!

  3. Avatar

    It is interesting that we neglect the history of economics, which is deliberate and calculated by these neoliberal rogues!

    Simon Patten (1852–1922)
    Patten said that there are four factors of production. Classical economics talks about three factors of income — land, labor and capital. But there’s a fourth factor of production, and that’s public infrastructure. However, its function, Patten said – and this is a pro-capitalist saying it, this is the business school – the function of public infrastructure, roads , schools and essential utilities is not to make a profit, like a private investor would do. The public aim is to lower the cost of living and doing business, so as to make the economy more competitive.

  4. Avatar

    I couldn�t resist commenting. Very well written!

  5. Avatar

    Aw, this was an incredibly nice post. Finding the time and actual effort to generate a great article… but
    what can I say… I procrastinate a lot and don’t mmanage to get nearly
    anything done.

  6. Avatar

    Way to go!

  7. Avatar

    This side up.

  8. Avatar

    This is the future of kitty cats.

  9. Avatar

    This is the future of kitty cats.

  10. Avatar

    He’s just waiting patiently for the place to open up.

  11. Avatar

    He’s just waiting patiently for the place to open up.

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