Edited 30 Nov 2014 20:27, 6 years ago, edited by djf01

This is a topic I've been banging on about for years here.

In 1999 when ARTC first reported it's balance sheet was worth $0.2bil.  By 2004 it was $0.8bil.  By 2014 it's $5bil.  

In all that time (I'll have to go and add them all up one day) it's total accumulated net profits are close to zero.  That $5bil has come mostly from "one off" grants and raising debt on the commercial debt markets.  Because government debt to purchase business assets are balance sheet rather than P&L items, that debt doesn't appear as part of the budget deficit.  Neither does the debt ARTC sources directly from the market.

But the effect on macro economic policy and the government's actual financial position is exactly the same as if the organisation was a publicly funded statutory authority.  It just doesn't look as bad on the government books.

My previous estimates are than ARTC loses roughly $500mil a year, but it's hidden by various means: mostly capitalising maintenance.  It's been less than that in the past couple of years, as the government's budgetary (and indeed political) position has been deteriorating.  So we're back to running down the plant.

There are exceptions, and the obvious one is the Hunter coal network.

The intention with ARTC was about turning it into a viable business, but unfortunately it hasn't panned out that way.  Unfortunately, the current government appears to be more ideologically than pragmatically driven: even though in my view ARTC is a million miles away from being ready to privatise, I think they are going to push ahead and privatise it anyway.  

I think there is a very strong case for separating out the Hunter coal network from ARTC (in terms of financial reporting/administration).  ATM there is tremendous scope for ARTC to be a front for back-door unrecognised subsidies to the coal industry.  There is similar scope for it to collect an unwritten coal tax (like Queensland used to?).  If the Hunter network is sold, I think careful thought as to the possible ownership structures needs to be made.  It would be far better if it were run by some sort of co-operative controlled by the miners but with a constitution preventing individual players taking complete control.  Such restrictions would lower the sale price of course, but the alternative essentially increases the sale price where the government essentially sells it's right to levy transport taxes on the mining industry.