The ongoing contractual payments to Metro Trains to cover lost revenue due to higher work-from-home rates show how misleading it is to argue governments can shift “revenue risk” to the private sector by privatising public services. It is ultimately governments who remain accountable for the standard of public goods and services, whether the ultimate provider is a public or a private entity. That’s why when one looks around the world it’s more common for operators to receive a fixed price that reflects the benchmark cost of service provision, with incentives and penalties coming on top of this. Where a fee is charged to users, the revenue is retained by government to offset the cost of providing the service, rather than affecting the payment to the operator.
To “pay a private company its own profit” is exactly what we all do when we procure goods and services from private businesses. The businesses expect a margin and it doesn’t come from anywhere else but the customer. The alternative is to do it all yourself, as of course governments did in the past and some still do today.
Tony Morton, President, Public Transport Users Association
Letter to The Age, published 19 June 2025