Melbourne Infrastructure Innovation Plan!

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COMMENT, Melbourne — Yesterday, April 2nd 2008, the Eddington plan for Melbourne & Victoria was released. Like many before it, he calls for more freeways and roads and more money.

$18 Billion Australian dollars, (about USD $16 billion) before the inevitable incompetence, corruption and budget overruns at the implementation stage.

And like so many large projects, political jockeying may lead to a White Elephant. Yet we do have a choice…

Eddington ran airline BA, and is a respected business figure, but perhaps the questions he was asked do not reflect the questions he should have been asked.

Here’s an alternate vision for Melbourne that will cost far less, and may actually save money or be cost-neutral in its initial stages.

The Insight: Cost of Maintenance

Too often, Government look for million dollar solutions to thousand dollar problems. Government bureaucrats love big bottomless software or infrastructure projects, but seem to forgo maintaining properly what they already have.

Corporates too love refurbishing, rebuilding and re-branding. Complex, multi-million dollar office moves or refurbished retail centres, new plants or infrastructure often cover a fundamental lack of profitability or productivity, quite nicely.

Disconnect between hammer, nail and wall

Too often the solution to a minor problem (wall) becomes a project (hammer) disconnected from the solution (nail). In the case of Government, MYKI ticketing is a recent example.

In business school, you learn the myth of pouring money into ’sunk costs’, but once started these projects will not be terminated without much controversy and attention. Some of it, career-ending.

So onwards big projects roll, like the disastrous Customs software, with no useful end-outcome, and no chance of the project working. MYKI seems the same.

‘Project momentum’ is why common sense must come before the project starts.

It’s not my money, let’s spend it….

I once recall sitting in a meeting with 12 people, 6 of whom were clueless, building part of a system to decide, using economic modeling, surveying, whether a government should paint or repair infrastructure.

The insight is that the Government (and corporates) often look for big solutions to small problems, rather than logical solutions.

And part of this is a broader social trend towards disposable living, consumerism and an economic theory that economic good times come from spending and waste. And that somehow, this largesse and waste trickles-down into the pockets of the poor.

So even though there is massive waste, this somehow magically makes us all wealthier. It must be luxurious to not really understand economics, but be responsible for it.

A better question is what is the opportunity cost of doing bad projects, badly run; in terms of project opportunities foregone, using the same money on better projects more useful to citizens?

20th Century thinking

A waste-driven, industrial approach is out-of-date. It is industrial, numbers-driven and lacking in vision. In defining the problem, and choosing Eddington; Brumby and others are stuck in an industrial approach to a post-industrial problem.

It is a problem that we lack vision in Victoria. The same old industrial solutions are trotted out; instead of real innovation.

We need radical ideas, which when you think about it, only seem radical because we forgot how sensible they were.

The Sydney Harbour Bridge was hotly contested for 30+ years in Parliament of NSW, but that icon is still with us.

Here’s a 3 point, 2thinknow Radical Innovation Action Plan for Melbourne and Victoria.

Here’s radical idea - #1 - Maintain it!

Once upon a time, the Government simply would have had carpenters, fitters & turners and others on the payroll, given them some paint, timber and nails and fixed our infrastructure. At a much lower cost.

Common sense so often is lost in big project, where a system is so profoundly nonsensical and lacking in concern for the community it serves.

So often, simply repairing what is there, with a well-trained full time staff of carpenters, painters, steelworkers and maintenance men would be simpler.

So often the Government or Corporates, buy a new asset, but outsource all maintenance (almost as an afterthought) to a variety of contractors, who do not care about the longevity of the asset. In corporations, this short-termism is disguised in continual balance sheet asset retrofits and purchases, depreciated over time.

The asset needs maintaining, is not maintained, runs down and soon we are off to Germany buying new assets with complex parts that can only be imported. We used to repair infrastructure locally. A ride on most Yarra Trams is a good example of this lack of maintenance, and ‘buy it, don’t maintain it’ culture.

Maintenance must be done by long-term staff who care. Not corporate relationships using by the hour, often ‘cash-in-hand’ staff bidded for at/below minimum wage to increase the profit to the contractor.

Logically, a private firm with private infrastructure and costs, plus a profit margin, is more expensive than maintaining merely a pool of Government labor.

Outsourcing maintenance to these lowest-bidder private contractors is flawed. It is broken. And so often the contractors are overpaid, the end-workers are underpaid, and thus do the bare minimum.

Work safety conditions also may not be met by people who are working illegally, as are many Melbourne office cleaners on student visas for example.

But Government top-level bureaucrats prefer expensive outsourcing to private companies so they can blame the contractor if something goes wrong. Think MYKI…

Oh Myki, not so fine, not so fine, you blow my mind… Hey, Myki! CHORUS, please.

So many problems I have seen in Government could be fixed at a cheaper cost by a few competent full-time workers, rather than a complex tender.

But because the work-ethic of so many Government departments is flawed, those bureaucrats are reluctant to hire more people who will also become bureaucrats.

In short, someone actually has to do the work. And complex solutions with big budgets, whilst doing work that is actually unnecessary, cover the fact that nothing has changed for the citizens.

In Brumby’s case for example, reduced numbers of actual physical (not scheduled) train (reported by 7’s Today Tonight) and tram services, are covered by various ‘future plans’, that never actually get implemented. Although announcements make the news regularly.

Brumby (unlike Bracks) does plan to do something, but it seems that it is destined to be the wrong thing, and at a great price in taxpayer dollars.

“I’ve got a shiny new infrastructure, it’s over-budget, so let’s cut maintenance…”

When they do actually approve and complete projects, often Governments scrimp on later project phases including primarily maintenance, or training.

This is because these phases are low-hanging fruit, and the minister can point at the finished station or tunnel and say — see what we built? (Oh and I’ll be gone before it falls apart.)

If they build the Harbour Bridge now they would not bother to all the cost to paint it regularly, as that would be deemed too ‘low-tech’ a solution.

Yet we have not had to replace the Harbour Bridge.

Radical, Unpopular: Idea #2 - Sack Bureaucrats

The perception overseas at times, is that average Australians are lazy, and will dodge work at every opportunity. Certainly there is a culture of looking busy in Government.

The 2thinknow solution is brutal. Sack 80% of the bureaucrats, the HR managers, the committee members, the analysts, the accountants.

Who needs them? Really? I have time and time again seen Government office buildings occupied by a herd of pointless time-wasting office workers. They do not always start this way, but it is a cultural problem…

Idealists sometimes enter (especially State) Government and soon discover the ‘don’t make a rod for your own back’ culture leads to risk averse situations where doing the bare minimum and pretending to be busy is the norm.

I have time and again seen Government workers on salaries exceeding $50,000 per annum playing solitaire or reading the Trading post, whilst claiming they are busy!!!

In NSW I saw it outside the General Manager of a department, clearly visible. Yet an ‘egalitarian’ culture prevents open discussion of lack of performance, and most likely he was doing the same. One of my favourite bureaucrats was always in the field, never in the office he was running.

Of course, there are some excellent Federal and State departments, like the Attorney General’s, DFAT, Austrade, some sectors of Defence, Dept of Premier and Cabinet.

But most transport, basic social services or health ministeries are a sad joke. And many people within them are frustrated at the culture.

Meanwhile the Government refuses pay rises and resource increases for front-line ambulance paramedics, teachers, drivers, nurse and police. These are the public servants who actually do work, but they constantly lose them to the private sector.

And inside the numerous office towers of State Government, overflowing with public servants, a small number of Government workers carry the others workload.

A close family friend once told me the ratio in social services in NSW was 1 in 6. 1 worker carries 5 others. Something that seems about right, in my experience.

Pity, if you are that 1 worker who does the work. Consultants do the work of the rest, as I used to do.

Nobody in Australia in consulting will say all of this, as we all depend on public service consulting. But the reality is it is time to ‘call a spade a spade’. Let us all put personal interest aside. Can we not think here of the ‘greater good’ beyond our own petty interest?

Many people in Government are unhappy doing ‘busy-work’ but the culture of politicization, endless meetings and pointless projects drains them and leaves them listless. Also ‘dead-wood’ colleagues will knife you if you ‘rock the boat’.

This has all been reported before in the media at various times. It is ‘on the record’.

Answer: More Workers, Less Managers

The answer is Government do not need so many managers. Once upon a time to be a manager you had to have staff. Excess managers is just a way of disguising entrenched wage inflation, by giving promotions.

Why do excess managers matter? When all you have is a manager, a PC and a phone, all you need is a consultant and a report. Who does the work?

In short, why do we need so many managers, when so few people actually do the work?

In areas of the Victorian State Government culture is so bad that a scythe should be taken through them immediately by an independent auditor of bureaucracy.That is, a toe-cutter only cutting head office people, not people who do work for citizens.

The cost savings of releasing or selling massive office towers rented or owned by Government, as well as reduced phone, IT, HR, services, recruiting and other overheads would be gigantic.

And the upward pressure on corporate wage inflation would ease in the mid-term, as workers are released to be soaked up by buoyant jobs sector for white-collar workers in private sector jobs.

Radical Idea 3 - Hire people to Work

Finally, let’s hire some of these sacked bureaucrats and ‘dispensed-with’ consultants back. Not as managers, but as people who do a decent days work.

Bring back a hierarchy, with people working at the bottom. Carpenters, repair men, steel makers, painters, cleaners. Put them on the Government payroll, and have managers who manage them to do work.

Don’t assume they can do the job, hire them, write procedures, and train them.

Give them good conditions, a degree of job certainty, clear tasks to do, let them work outdoors, and quite a few will jump at the chance.

Also shift policing, nursing and teaching back to important front-line based professions, increasing on-the-ground police, teachers, nurses and their wages and conditions.

In 1999 I was warned by an Inspector in the State Rail in NSW about the loss of drivers to private freight operators. This was common knowledge within the department. Yet 5 years later, the NSW Ministers were ’surprised’, by a sudden shortage of drivers.

With rising house prices and debt, it is not enough to bury your head in the sand and overpay Government office workers, yet underpay front-line staff like train drivers.

Pay and conditions, as well as clear work tasks motivate people.

After all, not everyone wants an office job. And not everyone needs an office job either.

We all Know This… I have talked about this to people in Government

The very good people I meet in Government know it’s broken. In a private moment they will accept it and even joke about it. They know how much groups like Allens Consulting Group were paid to do essentially pointless economic modeling.

Inside, no one wants to breach their own interest. Those who cannot stand it any longer, merely leave.

And the Government pays consultants as it is too unpalatable to address its own work culture, and trim its own bureaucracy.

The reality is consultants are good for one off jobs, where they bring world-class expertise, but they should not be duplicating the jobs of a public servant who is paid to do the job but is incapable. A job often not required if there were less cubicle-jockeys.

The Goverment must return to paying people to do actual work, not sit in cubicles, attend meetings and read the Trading Post in between.

A final piece to a Government Solution - the lawyers

Governments must have the political bravery to enact a law capping liability for personal injury. This is another reason for outsourcing, outsourcing risk and blame.

Capped liability, with certainty, would benefit both the defendants and the Government.

I recently had a close family friend who lost a case, when clearly he was using a machine that caused injury to his brain. He now has to pay legal fees, and suffered the indignity of being called a liar.

My friends legal case lasted many years, until he lost; and his phone was tapped by the insurer according to his understanding, which having worked for insurers I have no reason to doubt.

Another family friend hit by a driver whose insurer is refusing to pay. This case is in its 3rd year in NSW.

Fixed payments for injuries based on satisfactory proof would free up the legal system, and with some caveats for exceptional suffering should be introduced.

Moral hazard would need to be addressed, perhaps by payout ranges and risk criteria, but the current situation is hardly more satisfactory, and capping injury may reduce fraud.

Alternate 2thinknow plan for Melbourne infrastructure

1) Maintain the infrastructure we have, instead of forgetting it

2) Sack the bureaucrats in office towers

3) Hire people to do actual work

With the savings of these basic steps to the Government, perhaps the Government could use cheaper public debt (not the dubious Public Private partnerships) to fund a rail line to Doncaster, or even Caroline Springs.

And perhaps also create multi-level parking on the edge of the city served by shuttle trams.

The ideas and possibilities are numerous. But we need to fix the Government first. Brutal, swift and with some consideration of what needs to be done.

Then do simple, discreet projects; not monolithic dinosaur projects.

Ideas can be done once we get back to basics…

And here’s another simple idea, cancel the tram superstops, maintain the trams and return to a tram on every corner.

Weren’t trams designed to navigate the Hoddle grid? Isn’t this better than some new costly underground rail tunnel?

How many times now do you see people walking multiple blocks from say Coventry St into the city (St Kilda Road trams breakdown or are overcrowded regularly) ?

And in Collins St it is no longer worth catching a tram 2 or 3 blocks thanks to delays or super-stops which cause large gaps and confusion. I typically walk from Exhibition St end to Swanston or even, Queen St.

On the weekends there are regularly cancellations and trams stopping at Arts Centre for one reason or the other. Less services, same taxpayer money.

Perhaps we could even make the city mostly car free, with parking in surrounding inner-city areas using high rise or underground parking lots. These can be run by private enterprise if desired, and would be profitable.

Other cities around the world are trying ideas. Not having workers start work earlier or later, as the clueless Kosky tried to implement. Changing peoples lives to cover a lack of commitment to actually providing decent public services.

Perhaps make public transport public and free once it is improved, and remove all the bureaucrats regulating it.

How about free wireless broadband throughout the entire city? The far-flung former Soviet poor city of Tallinn, Estonia has done it, why not richer Melbourne?

Further there are so many green ideas from European cities, and continental Europe is implementing them.

In my next research trip, this April for 2thinknow, I will be gathering more of these ideas. Surely we can implement a few ideas, else what is the point of sending bureaucrats on expensive trips via Eurostar as this Government has done?

Victoria, under Brumby is becoming the ‘will talk, but can’t do’ state.

A New Victoria, can we have it?

A plan like this, an honest simple plan, is what a real man of vision would do.

And a real Government, with like Kennett, the guts and brains to do the important things, not waste more public money.

Hopefully Baillieu is the man. Brumby does not seem to be.

And it is time for political generational change in Melbourne.

Brumby is a dead man walking in terms of innovation.

Christopher Hire:

Author of the Global Innovation Review, and Chief Editor of this journal. Focussed on innovation, innovation cities and positive social change globally.

Activism, Architecture, Design, Urban, Australia, COMMENT, Economics, Features, Melbourne & Victoria, [English], innovation
Australia, Australian politics, John Brumby, public transport, State Politics, Ted Baillieu, Victoria, Victorian Government, Yarra trams