Various projects worldwide have been labeled White Elephants. These projects include the Gold Coast desalination plant and the Berlin Brandenburg Airport, among many others. What exactly is a White Elephant? How can we identify them and how can we stop them from happening in the future? In this episode, Scott Prasser joins show host Gene Tunny to talk about White Elephants. Scott is a former academic and ministerial adviser, and is one of the editors of the new book from Connor Court titled White Elephant Stampede: Case Studies in Policy and Project Management Failures.
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About this episode’s guest: Scott Prasser
Scott has worked in senior policy and advisory roles in Australian state and federal government public service. From 2013 to 2019 he was Senior Adviser to three federal cabinet ministers covering portfolios of education and training, and regional health, sport and decentralisation. In addition, Scott has held academic positions at five universities across four states and territories, the last at professorial level. Scott gained his undergraduate and master’s degrees from University of Queensland, and his doctorate from Griffith University. Scott’s most recent publication with Helen Tracey was Royal Commissions and Public Inquiries: Practice and Potential (2014); and Audit Commissions: Reviewing the Reviewers (2013).
Substack newsletter: Policy Insights by Scott Prasser
Links relevant to the conversation
The new book from Connor Court White Elephant Stampede: Case Studies in Policy and Project Management Failures
Criteria for identifying White Elephant projects.pdf
Regarding the cost of the Gold Coast desalination plant, see Brisbane Times article:
The Brisbane Times article reports:
“The controversial $1.2 billion Tugun plant was closed in 2009 after a string of complaints including rusting pipelines and mothballed from fulltime water production in 2010.
Normally it provides only three megalitres per day to Southeast Queensland’s water grid and costs between $12 million and $15 million a year to operate.”
Time Out article on fixing up the acoustics in the concert hall of the Sydney Opera House
Transcript: White Elephant Stampede w/ Scott Prasser – EP161
N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.
Gene Tunny 00:01
Coming up on Economics Explored,
Scott Prasser 00:04
The whole thing was driven by politics. Right, rather than by policy. Yeah, that’s the problem.
Gene Tunny 00:12
Welcome to the Economics Explored podcast, a frank and fearless exploration of important economic issues. I’m your host Gene Tunny. I’m a professional economist based in Brisbane, Australia and I’m a former Australian Treasury official. This is episode 161. On white elephant projects. My guest is Scott Prasser, who is a well known commentator on public policy issues here in Australia. Scott is one of the editors of the new book, White Elephant Stampede, published by Connor Court, please check out the show notes relevant links, including a link to the Connor court website so you can get a copy of the book if you’d like to learn more about white elephants. The show notes also include a clarification that I need to make regarding the cost of operating a white elephant not far from me, a Gold Coast desalination plant. I couldn’t remember the actual cost while chatting with Scott. And I overestimated it. That said, it’s still a costly facility and arguably fits the white elephant definition. Finally, the shownotes contain details of how you can get in touch. Please let me know what you think about what either Scott or I have to say in this episode. I’d love to hear from you. Right now for my conversation with Scott Prasser on white elephants. Thanks to my audio engineer Josh Crotts for his assistance in producing this episode. I hope you enjoy it. Scott Prasser, welcome to the programme.
Scott Prasser 01:34
Thank you very much.
Gene Tunny 01:35
It’s good to have you here. Scott, keen to chat with you about white elephants. So you’ve recently been one of the editors of a new book that’s coming out from Connor Court on white elephants, White Elephant Stampede case studies in policy and project management failures. So yes, looking forward to speaking with you about that. To kick off. Could you tell us a bit about your background in public policy, please, you’ve got an extensive background. And I think it’d be good to sort of let people know about that. I think it’s, it’s, it’s a really extensive, interesting experience. So if you could tell us a bit about that, please, that’d be great.
Scott Prasser 02:12
Sure. I’ve worked in federal and state governments, in state governments. I worked in state government, Department of Welfare Services, State Development and Premier and Cabinet in Queensland, under the Bjelke-Petersen government , and also under the Beattie government. Okay. So I’ve worked in those roles. I was basically running different policy units inside government. I also got seconded to minister offices in state government, and also in federal government. So immigration Minister’s office, I was Chief of Staff way back in the Fraser government days. And more recently, after serving, running a Public Policy Institute at the Australian Catholic University in Canberra. I work for three different federal cabinet ministers, Christopher Pyne, Simon Birmingham, and Bridget McKenzie, across education in regional services. And so, I’ve been in and out of the public service Minister offices and academia over the last 30 years or so, and writing on all sorts of things about Australian politics, public policy, Royal commissions, inquiries, and those sort of bodies. And I did teach project management at one university, which is how I got interested in white elephant projects because you run across a quite a wide a lot of white elephant projects when you’re teaching project management.
Gene Tunny 03:32
This was it was at University of the Sunshine Coast. Right. Okay.
Scott Prasser 03:36
So I’ve worked at RMIT, University of Sunshine Coast, University of Southern Queensland, Australian Catholic University, and also taught at QUT and University of Queensland. So as a sort of tutor, person, so I’ve done all those sort of things. So I’m interested in really what’s happening in the real world, okay, and how we can, how we can learn from mistakes and not so they don’t happen again.
Gene Tunny 04:01
Absolutely. Okay. So, Scott, can you say about this idea of this concept of a white elephant? Where does this why is it called a white elephant? What’s the story behind that?
Scott Prasser 04:13
Well really, the story really comes from Thailand or Siamese, it used to be called that if you were caught by the king, with your hands in the till, or committing fraud, instead of having your head cut off, or your hands cut off, which is one way of punishing people. The idea in Thailand is a very interesting place, which I like a lot. The king would give you a white elephant and a white elephant is sacred. And it means you’ve got to look after it. You can’t. In Thailand, elephants are work animals, you know, they live logs and things like that. You’re not allowed to make a sacred animal work. So this becomes a very expensive issue for you to have to look after. This gift from the king. You can’t sell the gift. You can’t kill the gift and you gotta maintain it and look after it. So basically bankrupts the person you give the gift to, that’s where the whole term comes from really, white elephant.
Gene Tunny 05:08
Right. And so when we’re talking about government projects, or I suppose any sort of project, we’re talking about a project, which is you can draw an analogy, or you can, it’s similar to this white elephant that the King of Siam would would give to you because it it’s not a good thing to invest in, it costs you money on an ongoing basis is that the idea?
Scott Prasser 05:34
Thats right, the white elephant project, or white elephant policy is something that doesn’t work properly, that something that’s too expensive to maintain, that something that often Looks good, looks good, but doesn’t, can’t, can’t do can’t perform. And it becomes very expensive maintain and therefore gives no return back to the owner or to the originator of it. That’s for a white elephant project, is it a very expensive thing, it costs more to maintain, and it doesn’t serve any utility, any particular function to do that, for the amount of investment you got to put in to keep this thing going.
Gene Tunny 06:10
Okay. And we’re typically talking about public sector projects, are we?
Scott Prasser 06:14
That’s right. We’re talking about public sector projects, there are no doubt in the private sector, white elephant projects and things that go astray. But the shareholder puts up the bill for that. And I don’t really care too much about the shareholders in the sense that I do care about the waste of public money. Since public money is finite, like everything. And I am concerned, in these days of sustainability, how we waste money on projects, and we repeatedly waste money on projects, that self Evon were going to become white elephant projects or are white elephant projects.
Gene Tunny 06:49
Okay, so what types of projects are good examples of white elephants? Scott, you’ve you’re looking at some in this new book, you’re editing the case studies in policy and project management failures, the white elephant stampede, what are some of the examples in that book?
Scott Prasser 07:03
Okay, well one of the examples close to home is the Queensland desalination plant. Okay. So this is rusting way down the Gold Coast there, it cost billions of dollars to do. And it was an overreaction to the drought we had a number of years ago right now. Now, from my point of view, all droughts come to an end, basically, as we are seeing right now. So we built a billion dollar desalination plant, but we haven’t built any dams in Queensland for a long time. And this basically, it was really a bad idea from the beginning. But it’s an example of what governments do when they got to be seen to be doing something. So that’s one example. The other one is close to my heart is the hospital payroll system we had in Queensland, which was going to cost you know, a couple of million dollars and ended up costing a billion dollars, we end up having to have a Royal Commission into this. It was such a monumental mess that should have been avoided. Olympic Games also tend to be white elephant projects, they always run at a loss there is one or two haven’t. They build infrastructure that serves only a short term timeframe. And since we’re in the Olympic game, game at the moment in Queensland, we’re suggesting and we’re seeing the issues about the GABA and the immense costs that this is a this will be a white elephant that’s going to grow before our eyes. So it’s we can grow up with it in the next 10 years.
Gene Tunny 08:36
Yeah, because Brisbane is the Olympic city and 2032 and the GABA at the cricket ground, the Woolloongabba at the GABA, which we abbreviate as the GABA here in Brisbane, they’re talking about just increasing the capacity by what, five or 10,000 people, but it’s going to cost $2 billion or something ridiculous, so they have to revisit that just on the desal plant. I think that’s a really good example and it illustrates how these things can be an ongoing burden because if they’re not using it, they can’t mothball it, you have to keep it in this Hot Standby mode or something. There’s some specific term they have for it you have to keep you have to turn it on every now and then. So the membranes keep fresh or something so they don’t dry out.
Scott Prasser 09:24
You can’t just let it sort of rot away. Yeah. So there’s the issue of a white elephant project that even after it become doesn’t serve its original purpose was not working. You they got to maintain them. That’s the problem. It’s a bit like having a Jaguar Car, its good when its going but not when its in the garage.
Gene Tunny 09:43
You have to get a good mechanic.
Scott Prasser 09:45
So it’s no use having these sort of things. You got to keep maintaining them. Yeah, that’s the problem about these things.
Gene Tunny 09:53
Yeah, exactly. And I remember I went to a presentation maybe five or six or seven years ago with our explaining this Hot Standby mode for the desal plant, I mean, it’s hardly making any contribution to our water reliability or water security. But yet, it’s costing, I don’t know, 50 to 100 million a year, I can’t remember the exact figure. But it’s a significant amount of money and for something that we isn’t really adding to our water security, it rained again. But this goes back to that time when in the 2000s, there was a view that, well, it would have, it didn’t we’d never have the rain we had in the past because of climate change. Tim Flannery was saying that and the government here was panicking about water supply and all of that. So that’s where it came from. It came in a time of crisis. So that’s one way we could get projects that aren’t really sensible. What are some other ways, Scott, that what why do we end up with these projects that are, that are white elephants?
Scott Prasser 10:52
I think there’s a number of reasons. One, I think that government is involved in too many areas. Okay, the government tries to do too much. Yeah. And the government is seen as the saviour of so many things. So if government could not be involved in so many things, and it’s focused on on the core business, where it should be, you know, good infrastructure, good roads, and that sort of thing so, government is often called upon to be doing things now politicians reaction to that, is, something’s got to be done. This is something we can do. Right. Okay. And they have no concept of our financial limitations. So governments, often we saw that during the COVID thing, where governments were running around doing all sorts of things, which were completely against the evidence this remember, in Queensland, we were formed by the Chief Health Officer we, and was mandated, we should wear a mask in our car. Think about this, and we should wear a mask walking around a park. Let’s think about this. Now, I didn’t do that, I refuse to follow the law. So that’s an example where governments are going to ratchet up activities to do things. Also, governments love to love to announce iconic projects, you know, I hear the word iconic, I run a mile, okay. This is Danger, danger, or this is going to be a landmark, or they want to have a vision. I don’t want governments to have visions. Thank you very much, especially the wrong ones. And so it’s this thing of meeting the electoral demands to be doing something instead of saying nothing can be done. Okay, that in some cases, is not government’s responsibility to do it. And if we do anything, it doesn’t, doesn’t have any effect. So, you know, it’s like, you know, why does the Commonwealth government spend $5 million on men’s work sheds? I mean, what has that got to do with the Commonwealth Government? There’s like a little mini, a mini white elephant, because they want to be seen to be giving out money for some minority group cause or something. So it’s politics in politics. The other factor is that all the organisational things inside organisations, groupthink happens. Yeah, okay. Now, if you’ve worked in the public bureaucracy like me, it’s sometimes very hard if you if you want to be the lone person who says I think that’s a dumb idea. Yes, right. Yeah, it doesn’t go well with the rest of the team and the hierarchy, which CERN you got to have in the bureaucracy, someone willing to say, No, right. Now, our public services have become politicised, that is people are on short term contracts. They give the government what they want, not what they need. So this sort of Once Upon a Time treasuries would have said, and that’s why under Joh, we had permanent public servants. Okay, Joh Bjelke-Petersen, Premier, they were permanent public servants. Queensland didn’t have a zoo. Queensland didn’t own a bank. Okay, Queensland didn’t do all the crazy things that Joh wanted to do because the treasurer, Leo Hilscher and crowd will say, no, Joh, you’re not going to have it right. Now, I don’t think that happens anymore. Because all the senior public servants are on five year contracts. They want to get their contract renewed, they will give into the political will all the time. So that’s one of the issues that helps help throughout why we’re getting more of these things. And why frank and fearless advice is no longer being given. I don’t want to sound too precious, but it is very hard in the bureaucracy, if you’re in the hierarchy, and you want to get a promotion in the future, and you’d write a memo to the premier. This is a really dumb idea. And I have done this myself and I have saved the taxpayer money. I can tell you right here. And that’s because I had a very good director general in the Premier’s department, but it’s hard all those organisational factors, the political factors and government in all the interest group pressures now interest group pressures on wanting to get something from government. Australia has always looked more to government than other countries. You know, we’ve always We founded by government Australia was founded by, you know, sending out convicts here. It was a government thing in America, America was founded by people trying to get away from government, they want to religious freedom. Okay, so there’s a difference. Yeah, sort of context. So all those factors have driving that. Plus, I think, economic theory, modern, modern monetary theory. So it says, oh, spend as much as you want, it doesn’t matter. It All right, you know, there’s no, there’s no limitation on what government can spend. So the idea of balanced budgets being careful, and frugal has sort of gone by the by, if you’d like. So all those factors are contributing to this sort of galloping syndrome.
Gene Tunny 15:45
Well if it was a good infrastructure project, or a good if it was delivering public benefits into the in the long term, then you could make an argument that it may make sense to borrow money to invest in it, it could be good debt. But the problem is, these are such bad projects. They’re, they’re not delivering that return. And they, they’ve got this ongoing cost, for hardly any benefit. And I think this is a point you make, and this criteria for selecting white elephant projects for identifying white elephant projects, which I think is really good. And I’ll put it in the show notes if that’s okay. I think it’s excellent, I think this was something you did for your public policy course at Sunshine Coast, etc. And one of the points you make is that, so while white elephant projects might produce some marginal benefits, the issue is they never cover the project’s real costs, and more often end up costing more, okay, so we’re not saying that these things are completely worth worthless that they don’t deliver some benefits, it’s just that they’re not enough to justify the large costs.
Scott Prasser 16:45
I think you see it in, you know, stadiums or things like that, or opera houses and so on, which you know, do serve a certain public purpose. And there’s a there’s a place for them, but they, they never really will cover their costs. So they’ve got to be subsidised. And the first indication that seems wrong, after things been developed, we need more funding, or we need more to keep it going, right. I’m in the Sydney Opera House, many of you are together as a white elephant, by the way, because A, it was a design that no one knew how to build. Yeah. The technology wasn’t there. It cost phenomenally more than I think 2,000% more than the original costs. Yeah, it costs 150 million bucks a year to keep, to keep going, right cleaning and all that sort of stuff. And acoustically, I’m told, not that I go to opera, everything like that. I’m told that it’s not that all great, you know, the there are better opera houses or sound places around the world and build a lot less cost than the Sydney Opera House. It looks fantastic. No one No one can deny that. It is a landmark. But there’s an example where it still serves some purpose. But okay, it, you’ve got to keep it. You’ve got to keep it up to the mark and only the public taxpayer can keep it up to the mark. No one’s going to buy the Sydney Opera House.
Gene Tunny 18:06
Yeah. Yeah, exactly. Amazing building, though. It is. So I’m trying to remember the issues. Yep. There’s an issue with a concert hall. So I think there’s, there’s the different shells of the Opera House. And I think there’s a there’s the Opera Theatre in one shell. And the problem there is that depending on where you sit, your view can be limited. So if you’re sitting on Yeah, so in some seats, you don’t get to, it’s not a full view. And the problem with the concert hall part of it. Yeah, that’s definitely an acoustic issue. And they’ve tried various fixes over the years to improve that I might put a link in the show notes. Remember, I’m trying to remember they had some some donuts hanging from the ceiling? I’m trying to remember correctly.
Scott Prasser 18:50
That’s right, there’s a book that came out in the 70s called great planning disasters. The Sydney Opera House was listed. Yeah. You know, but no, and as an example, it is it is pretty fantastic when you’re on the ferry to look at and so on. But you have to think, what this is costing you, and there’s lots of things like that all around the place where governments and what happens is a project or something which is developed for purpose x, it doesn’t meet purpose x. So gradually the purpose changes to purpose y. Okay, yeah, it’s not really a great opera house, but it’s a fantastic tourist attraction and you see what I mean. So you sort of transfer the goal from what it was originally to be to as a fantastic tourism attraction. Now how you measure the impact of tourism is pretty hard, as you know, the best of times, so they happen a lot, gold is placement happens a lot with with white elephant projects.
Gene Tunny 19:50
Yeah it’s a hard one because it’s hard to think of Sydney Harbour nowadays without the Opera House, but we know that it is one of the the most magnificent harbours in the world. Also it’s still be, you would expected to still get tourists there regardless of what you put there. You could put something up cheaper. That’s an attraction instead of the opera.
Scott Prasser 20:09
Yeah, look years ago when I was in the premiere department, the Roma street Parkland issue. What should we do with the Roma street parkland, and I read the project team to look at that. And we talked about getting the Smithsonian to try and build something there. We went to America, Premiere Beattie winter America, and we had a committee of the great and famous people of Queensland, I can tell you the great and famous of Queensland. And the trouble was, I could never get them to focus on the purpose of the building of a building and want to build some sort of building, everyone focused on the design of the building. And it was quite exasperating with this committee of great and famous people. And I had to get the Director General to go and actually talk to them in the end, because I couldn’t control him because everyone just came with their pictures of iconic buildings from around the world, you know, Bilbao and all that sort of stuff.
Gene Tunny 21:03
Which is a white elephant. Guggenheim.
Scott Prasser 21:08
Yeah, they all went through the design, but what are we going to put in the building, which was, to me, the important issue, what are we going to use the building for? Is it going to be and to build a proper museum type thing is you’re talking about 300 million bucks. $300 million. Okay. Yeah. And what’s it going to do? And it was impossible to get the great and good committee to look at function as distinct from design of the building. Okay. And it was a very interesting experience. To try. We had museum people in and we had all sorts of people discussing this. But fortunately, it wasn’t, it wasn’t tempted and eventually got dropped.
Gene Tunny 21:45
I need to ask you more about this, because I walk through there practically every day or every second day. I live near the park lands it’s this amazing space. They’ve got this beautiful floral garden there, the spectacle garden, there’s a lake, there’s a Well, I mean, it is a rain forest is part of it. There’s not a lot of rain forests, but there’s a little bit there. And there’s this canopy walk, which is great. I think it’s an amazing attraction. I couldn’t imagine anything else been there. But what ended up happening? Did they just think, Oh, this is all to hard redevelop or?
Scott Prasser 22:15
Smithsonian doesn’t do things outside the United States. That is the crux of the issue. Smithsonian is an American only and the money for the Smithsonian came from an Englishman, by the way, called Smithson, whatever comes from he gave money to America in the 1840s. The American government didn’t know what to do, in gold in gold, by the way, they didn’t know what to do with it. And then the idea was to set up the sort of museums, museums were run by governments in the 19th century to largely be places where you brought back your booty from your colonies. Okay, the English Museum, German Berlin museums. And so the Americans decided to build this museum complex, which anyone been there is fantastic. Because it’s multiple museums in Washington, DC, it’s fantastic place. And that’s what they did. And we brought Smithsonian people out to Brisbane, and all sorts of things to try and see if we could get interesting. We develop some sort of agreement and we develop some sort of interchange of scholars and people, I left the Public Service and that probably didn’t happen. Right.
Gene Tunny 23:29
Okay, that is very interesting. Now, I had to ask because it’s so close to home. So yeah. Okay, we’ll take a short break here for a word from our sponsor.
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Gene Tunny 24:11
Now back to the show. Okay, let’s go over some of these other criteria. Scott, I think this is a really great list. This was for your students, so they could come up with examples of white elephant projects. And this is when you’re teaching project management. And so first, they do not fully achieve their public stated objectives. So second, white elephant projects usually cost more than was promised or estimated and much, much more. So this whole thing about mega projects is this mega project risk. I think you refer that, the Oxford scholar who’s written a lot on mega projects. So you’re in that’s in your oval, overcoming the white elephant syndrome. Yeah, yeah. Good one. And fourth, they often so yeah, third, they might produce some marginal benefits, but they don’t cover their full real costs. Fourth, though, too often maintain past their use by dates. Okay and fifth, they were perceived as counterproductive in its own time, not merely by hindsight. So you’re talking about so your contention is that a lot of these projects, at the time were criticised as being potential white elephants and politicians went ahead anyway. Is that right?
Scott Prasser 25:27
Yeah. Politics like to say we’re doing it. Okay. Yeah, we’re gonna do it. Right. Peter Beattie was very big into we’re doing it sort of syndrome. And they don’t want to have a back down, because that’s a political embarrassment. Right. Okay. So I used to have a superior in the public service. And his slogan used to be let’s do it. And my slogan was, let’s think about it. This cause conflict, okay. I said, Why are we doing this crazy project sort of thing and that was also my view. And so I’ve and I’ve worked in ministerial offices in Canberra, why, Minister are we doing this project? You know, is this a good idea? And so, once this things gets going, it’s really, really hard despite all the contrary evidence that happens. Now, sometimes that evidence could be inaccurate and wrong. And that’s when judgement is required. We know and Prince Albert was building the Crystal Palace in England for the Great Exhibition, everyone said it was going to be a white elephant, and there’s going to be a disaster and people are gonna die. That Her Majesty Queen Victoria stuck by him and it got built in it was an exhibition was a financial success, you know, it built a whole stack of things afterwards, not for the money, the profit went. So, but you know, what is interesting is, is governments do not like to admit they’ve made a mistake. Yes, right. That’s now I think, it’s sometimes we can say sorry for lots of thing. But we don’t want to say sorry for the sort of mistakes. And we I mean, the other who want to see lots of mistakes is Defence projects, phenomenal amount. And helicopters that don’t fly. Tanks that are too heavy for our bridges, and so on, so forth, frigates that we don’t know where they’ve worked or not. Submarines, and we still don’t have, and so on and so forth. It just goes on and on.
Gene Tunny 27:19
So this submarine debacle or whatever you want to call it. This was intensely political, wasn’t it?
Scott Prasser 27:27
It was about saving Liberal Party seats in South Australia. Right. That’s the story. That’s really it. We, we could have bought, the German Germans have had pretty good experience of u-boat type things, okay. And we could have bought the German programme. And if we bought the German product, they were knocked down form, they would have cost $12 billion. The Germans would have come out and train people as they tend to do. Yeah. Okay. And they will now be operational. Right. We then went down, we then retrofitted nuclear French submarines, put diesel engine in because we can’t have nuclear power. Why we would want to build diesel submarine is beyond my comprehension. Yeah. And then to prop up the liberal seats in South Australia. Then we went down this track. And so here we are, in 2022. We still haven’t got a single submarine. And by the way, the Collins submarines have also been a bit of a disaster, too, in terms of their they’ve had to get refitted with lots of problems with them, and so on. So I don’t know it’s a real, it’s a real problem. And there’s an example where we really the whole thing was driven by politics. Right? Rather than by policy. Yeah, that’s the problem.
Gene Tunny 28:45
Yeah. So we were trying to get manufacturing jobs in South Australia for political reasons. So we were either we are, we were building submarines here, or what was it retrofitting French submarines. Yeah. And then we ended up having a change of course, a couple of years ago, because we signed this ORCAS agreement with the US and UK. Fair enough, but that’s upset the French.
Scott Prasser 29:10
Yeah, I think what we should have done is gone and bought a couple of nuclear submarines from America or, I’m sure had a couple lying around somewhere or and gone ahead with the debt. That’s what we could have done. So that’s an issue.
Gene Tunny 29:24
Yeah, yeah, absolutely. Okay, six, there were feasible alternative courses of action available. In short, the project chosen did not have to be adopted or take the particular form it did to tackle a perceived problem. Okay and certainly in that water crisis, when we went ahead and built that expensive desalination plant, a better option was possibly well, if we’d built dams in the past.
Scott Prasser 29:47
Just remember that the Goss government came in and canceled the Wolffdene dam. Dum dum, okay. against the advice of the coordinator General Affairs Department at the time. Um, so you know how during the drought, remember, there was all this incentive of buying, getting tanks in your backyard tanks, I didn’t buy a tank, because I have this very odd view that since I pay rates in water rates, I expect the government to supply me with water. Okay, it’s not my job to go and spend 10,000 bucks on a tank to be in my backyard. And so its the same with solar panels, we could use the same analogy. So the government’s don’t often sit down properly and say, how could we tackle this issue in a different way they jump to the obvious, most visible idea, right. The big project, the big deal, we’re doing this, we’re going to save everyone, if we go ahead of this big problem, when they’re often alternatives. And look, you know, this and I know this, most public policy problems are really caused by people’s behaviour. Okay. Okay. Why are there car accidents? Because a lot of people drink too much. Okay. Right. Okay. Why do people get sick lots? Because they have lousy diets and have bad lifestyle. Okay, hospitals pick up the residual. Now, we can’t change people’s behaviour, except by all sorts of incentives and so on things like that. But governments don’t really sit down. It’s like freeways. I mean, do we have to keep building freeways when maybe you have completely different urban development or you have different timescales for people to work and go home and all sorts of stuff. And you don’t have to go down the big spending alternative and sit down and think about, look, you’re hearing this in education at the moment. Ah, you know, we’ve got to we’ve been spending more money on education, by the way, by quite a large amount and our results are declining in Australia in a big way. Federal government more than the states, the federal government is actually now the biggest single spender on schools. Okay. Right. Okay. And where did that where did the money go? Largely goes in teacher salaries? Yeah. Because we got smaller classrooms. Okay. So is that really the appropriate thing to do? Or should we be thinking about? What are teachers? How are teachers properly trained? And things like that, you know, what’s, what’s the way to do it? Aboriginals have a poor education, but you talk to people, a lot of the problem is that they don’t attend school, right. The people don’t attend school, then there’s the problem. There it is. And they’re very hard things to tackle. But governments just jump to the obvious so often, and don’t end as in because of rushed decision making gotta be seen to be doing something. And the media, piling it on. What are you doing about this? What are you doing about this? This, like, when you see an accident, train accident or something? There’s some poor person, you know, dragging themselves to the train or the poor ambulance service dealing with people. What’s the government going to do about this. You know, give us a give us a bribe. And what I found is government rush too many things. rushed to meet the media agenda. Yes, yeah. Then yeah. The policy agenda.
Gene Tunny 33:30
Yeah. Right. So yeah, and this is where this is how we get white elephants. They want something iconic. I mean, you’re talking about. No, thankfully, that Smithsonian thing never went ahead. But they ended up with this idea of a there has always been this idea of a landmark or an iconic building in Brisbane, I think it probably will come up again with the Olympics. So we wanted something to sort of excite the world or make Brisbane distinctive. To an extent I think that GOMA, that Gallery of Modern Art that was they were trying, I think that one intention of that was that it could serve as a building that
Scott Prasser 34:07
Yeah, well, the art world is very big on that, mainly because so much art shown is so terrible. They’re got to have something good outside to look at.
Gene Tunny 34:15
Yeah, oh, yeah. Some of it’s difficult…
Scott Prasser 34:18
I’m obviously a Philistine. I don’t understand.
Gene Tunny 34:21
Some it is. It’s difficult to comprehend really, but but they’ve had some great exhibitions at GOMA. They had a great David Lynch exhibition many years ago.
Scott Prasser 34:31
I think Southbank which is basically developed by the National Party government, essentially, for the expo 88 is quite a successful sort of precinct in a sense. Yeah, without being too grand. The art gallery is a reasonable size, there’s the Queensland library we’re one of the few places that actually have a State Library, not everyone is very keen on those things. So there’s a lot of good things about the South Bank, I think it was developed and the government would push through and got that done. And there is a bit of style about it without it being over the top, over the top, not that it’s not a Guggenheim by any stretch of the imagination. So it’s, if you go over there, it’s pretty busy in this kid’s swimming and what sort of stuff. It’s got some things going for. But yeah, there’s one example where it’s at a scale that is confit in Brisbane, say where I mean, the, the iconic thing of, of Brisbane is the climate. That’s the iconic thing. And unfortunately, don’t build houses to suit the climate. We build houses of air conditioning systems, designed in Melbourne. Yeah, that’s another story.
Gene Tunny 35:41
Yeah. Yeah, coming back to the white elephant. So the last criterion that you specified, the decision to proceed with a policy or project should be that of a group, not an individual ruler. So all case study selected involves some form of collective decision making process in a democratic environment, not by tyrants, dictators or in authoritarian regimes. That’s because we just assume dictators will do crazy things.
Scott Prasser 36:13
Starling, yeah, you know, Hitler, and those sort of people. North Korea, you can look at lots of those sort of, yeah, sort of buildings, they can make it happen. Sometimes it’s, you know, it’s great. I mean, I suppose you could say Adolf gave us the German highways, which were brilliantly designed and, and still are pretty brilliant to drive on. They’re much better than American highways. But you know, that’s a big cost to pay. But I think all the things we’re talking about, were decided in this democratic system. That is there’s a so called independent public service, there was some sort of parliamentary approval, there’s some sort of accountability, there’s some sort of openness about them. They, I mean, Mr. Beattie, might have been a very powerful Premier, but he still had to get approval from his cabinet. One assumes for the things that went ahead, yeah, so we can’t just blame the premier, you know, the premier was part of a government. Yeah, therefore, we say, and we have a reasonable, you know, free press to comment on things. So that’s what we’re saying that you can’t just blame, you know, one person in our solar system. Our white elephants have been collective fair decisions, if you like, right, we’ve tried to point out.
Gene Tunny 37:29
So we’ve got to look out for them as, as citizens, or if we’re in government, then we should be looking out for these things. And because they’re not really, what’s your view on whether they’re actually politically sensible or not? Like if you’re if you’re just looking at completely politically? Do you think these things? Do politicians get a benefit from them, when they open? When they open the desal plant, or they open a new school that ends up running under capacity or a new hospital?
Scott Prasser 37:58
They think they do. Now, that’s politicians, I often have arguments in with politicians about grants and things, you know, why are we involved in giving out this grant of $5,000 to x project so the local member can hand over this check? Do which gets a tiny article in the local paper. Do you really, really, think, minister, that this is going to get votes for the government? Yes, Scott, you don’t understand politics. I do understand the politics. I’m saying it’s not very good politics.
Gene Tunny 38:33
Yeah. Okay. So as an advisor, you’ve got made a push back. Yeah. Okay.
Scott Prasser 38:40
I’m very proud that on a couple of things. There was one crazy idea going on in one office, about a moving government testing body to somewhere in the country. And the public servants said to me, Scott, this is going to cost $50 million to do . That is what it’s going to cost, what can we do? I said, we’re going to slow it down. And we slowed it down. And got so slow down, it didn’t get to cabinet, and it was too late for the election. Right. We didn’t do it. Okay. How are we all happy.
Gene Tunny 39:18
Right. Okay, so, going back to your book, just before we wrap up the white elephant stampede. We talked about the desal plant. You talking about the payroll system debacle here in Queensland, the state of Australia, we’re in other what other examples are there in this book? Are there international examples too?
Scott Prasser 39:42
Yes, there is one. Paul Hooper talks about airports. He’s basically, a what do you call him a transport economist? Yeah. And PhD has worked in, worked overseas. And he looks at how new airports often become phenomenal, disasters in one in Berlin became a disaster, one in Thailand. And he looks at how airports often develop with little thought about what it really gonna cost and how effective it will be. So, there’s when he looks at those sort of things, I think that’s a really good one to look at. So in his national one, if you like, the Olympic Games and looks in other Olympic Games, as we’ve talked about, so we’ve talked about those, the other one I like is the COVID Safe App, which people may remember in the Commonwealth Government, the COVID Safe App. Okay. And I had come in, I refused to join, join it, by the way, as I did on anything, I never tried to join and link up with government. And that’s been a complete waste of time and effort. Yeah. Right. And, again, the government rushing into it and sometimes technology makes government think, Oh, we can use this new technology for something. And again, that wasn’t wasn’t thought thought through. So there’s a very recent example, which is in the book being discussed by Professor Schwartz, who used to be Vice Chancellor of Macquarie University and so on and is an extremely bright person. There’s an example of that very, it didn’t cost a lot of money, but it still cost some money and took up a lot of time. And and expectations were just never met, it eventually just faded away.
Gene Tunny 41:35
That’s completely useless. So what was it it was an app on the phone at work through Bluetooth and if you passed, every time you pass someone who also had the app on and Bluetooth was enabled, there would be a communication that you you’d register that you were in close proximity one and a half metres within one and a half metres of this person. And therefore if they tested positive for COVID, you would then get notified or you are in close proximity of someone who had COVID and that was supposed to allow us to manage goes better.
Scott Prasser 42:07
Appalling, appalling authoritarian government scenario going on I mean, fact that it was it was a liberal so called Liberal government brought tortures up. Is even m ore repulsive. What’s the next bright idea coming from the powers that be in Canberra land?
Gene Tunny 42:25
Yeah, well.
Scott Prasser 42:26
I mean, Canberra is a white elephant by the way, the whole thing. That’s another story.
Gene Tunny 42:31
I know that it was in the top 10 policy mistakes public policy mistakes for Australia that the Institute of Public Affairs put out. I forget how many years.
Scott Prasser 42:43
Redfern post office or something was the other one where all the mail went through Redfern and Sydney exchange and got stuck if there was a strike. Means all the mail in Australia got stuck on something like that. I think it was Redfern, one of those sort of things. And see the other thing is government often put all their eggs in one basket. Yeah, another issue. And this is why a federal system of government is good because you can have different baskets going on. And if you over over capitalised, you turn over capitalise in your house, you have interpreters in your car, or government going over capitalising in spending money. Yeah, and they put all their eggs in this, this is the solution for the problem. And of course, you ought to have a couple of horses in the race rather than just one horse in the policy race. If you’re lying. There are many ways to policy heaven, I say. Yeah, so we all be careful about adopting just one thing as the magic solution.
Gene Tunny 43:46
I was just thinking, does anyone talk about is there a chapter on public transport projects in there?
Scott Prasser 43:51
No, not Not really. But that might be next book we what we’re wanting to do is, is have a series, another book coming out and have an annual White Elephant award. Yeah, that’s what we want to do. And we’re going to link up with project management institute and Master Builders Association, those sort of bodies, Master Builders, of course, I’ll build anything they sell me. They’ll build anything, downside, people pay, they’ll knock down as long as people pay. They don’t question the value of what they’re doing. If you give me money, we’ll build it. No matter how stupid and how bad the design will be. We’ll build it. That’s not our decision. Okay.
Gene Tunny 44:29
Yeah. Well, I was just thinking public transport because there’s a bit of a question about whether this new subway project we’re building here in Brisbane is economically viable, particularly now as the cost of it’s blowing out. It’s one of these mega projects Cross River Rail.
Scott Prasser 44:45
That’s right, blowing out. The Sydney light rail project is one that’s been very expensive and very disruptive and took longer and so on and so forth. And given that what we’ve learned from COVID. What have we learned about how lot of people can work from home. We don’t really need all these offices and buildings running around the place. And so Heaven has arrived, in a sense, you can work from home. And given that, you know, a lot of our people workforce works in white collar office type jobs, then that’s possible. When I was in the public service, it was very hard to work from home. Okay, it was very hard to let one of your staff work from home, there’s all sorts of forms that had to be filled out. And sometimes some staff could work more effectively at home, you’re not being interrupted by, you know, coffee halls, and I would let staff work from home sort of unofficially. And, okay, you got three days, I want, all I want to see is the paper at the end of the three days, and had that person stayed in the office, it probably would have taken two weeks, because of all the disruptions and meetings and, and rubbish that goes on. So now we can work more from home. So we need to think about, you know, when people travel, why they travel? And do we need a lot of the infrastructure, you know, coming into the city? For what purpose? And for how many?
Gene Tunny 46:13
Yeah, so I’m just thinking, what’s the how do we fix this? I mean, can we actually fix it? Or is it just a feature of our democratic system is, we’re always gonna have politicians being political. Could should our journalists be challenging the politicians to give us the to provide the cost benefit analysis before us bill? Should there should be rigorous scrutiny of that cost benefit analysis? Should we have competing cost benefit analyses? So you’re not just getting the view from Deloitte or the view from whoever that this is a great project and I mean, the government’s paid them a tonne of money tax, right.
Scott Prasser 46:48
That’s right, I certainly wouldn’t trust those people. Well, we’ve done this, haven’t we in other areas of government, I mean, the Productivity Commission. And it’s for run, the industries Assistance Commission, which which came out of the Whitlam government period, are examples where if you set up a process, and you have public reporting, and I’m not totally in favour of everything the Productivity Commission has recommended, but we know, don’t we, that if you want to keep x industry going, it is going to cost you $15,000 per employee to keep x industry going. You didn’t know that before. And now I’m, I’m all in favour of that information being in the public arena. But I’m also in favour of governments making democratic political decisions about keeping in industry costing $15,000. But I think the taxpayer ought to know what it’s costing in the trouble of so many of our projects, and especially state governments, which tend to be more secretive, is that we often are not told the truth about the cost of a project. It’s fuzzy, fuzzy figures. Don’t you worry about answers. Yeah. Okay. So in public policy, we often talk about speaking truth to power, that is, advisors, telling the leader, the King, the minister, the truth about what’s going on, highly admirable, if you don’t want to get shot or deported or whatever. The King of Prussia, Frederick the Great, he was a very hardworking king, he was absolute king. He worked from four in the morning till midnight, he had ministers, and they would have to report to him once a year of annual report. And but he did allow his ministers to tell him the truth, the one he put into jail for six months, he didn’t cut his head off. But he was telling him that the King’s idea was really a bad idea. And he released him because he said he was right. But I think the other problem we’ve gotten our democracy is that governments don’t talk truth to the people. We have so much political pallava going on. And we’re seeing it now, with the Albanese government over the defence projects, I’ll blame the previous government. Well, how about we have a real valuation of projects properly, rather than just jumping into the blame game sort of process all the time. How about telling us what the real alternatives that you came to government? You said that you could decrease energy costs that we need to spend more money on these things? Or how are we going to do it? How are we going to do it? And I think I would like some processes set up in Queensland, I’ve often recommended there should be a state priorities commission. And it should operate a bit like the Productivity Commission, we sort of have one. And anytime a government wants to do saying it should go to this body and it should release a Cost Assessment in the public arena. Yes, right. Yes. Yeah. It’s got to be independent, truly independent, not filled with political hacks or whatever, and then the government, then the government can make a decision, we’re still going to go ahead with the project because we think this is in the wider public interest. Yeah. So that’s what I think should happen. You’ve got to have processes. And you’ve got to insulate some of the advisory systems from the interference in the public. We’ve seen from Royal Commission, the Royal Commission to overseas doctors, in 2005, highlighted how the Premier’s department interfered in the release of quality reports about health. There was fixing of the hospital waiting list. Okay. This is all down to politics by the public. We had all we had all the body we had health Commission’s we had ombudsman, we had all sorts of rules that they weren’t insulated from political interference. I believe the biggest problem Australia’s got is not climate change is the politicisation of our public service, our judiciary, and our universities, where we people are appointed because of their political allegiances, not because of their competence. And because of that people are showing their allegiance to the governor of the day, and they’ll do what the government wants them to do.
Gene Tunny 51:20
Right. And that’s both sides of politics.
Scott Prasser 51:25
Newman missed a great opportunity in not fixing the problem. And his government was marked by just as many bad cases of cronies getting positions.
Gene Tunny 51:37
Right. Okay. Okay. Yep. There’s a lot of politicisation for sure. And that’s behind these white elephants. Absolutely. Okay. So any final points? Scott, what did you think? Were some of the highlights of this book? What are you most happy about with this, this edited volume?
Scott Prasser 51:58
Well, I think it was interesting how easily we got people to find examples. And then there was an as we could have been twice the size, okay. We didn’t think initially we would have a lot of interest. But a lot of people we’ve sent a flyer to, and we’re going to have a launch in November, in Brisbane and one in Canberra that there’s tremendous interest in this. And our job is to try and make people aware, what we want, we want we’re not against public funding. We want public funding spent more effectively. And if you’re talking about sustainability and the environment, surely we shouldn’t be wasting money on projects that are consuming resources and causing pollution in the construction or whatever it may be. When there are alternatives in the way, things could be done. That’s what we’re really on about. And we’re sort of surprised that the universities are letting us down on not being critical commentators on these sorts of things. There’s there’s very few people in universities writing about these sorts of matters.
Gene Tunny 53:12
Okay. Scott Prasser, thanks so much for your time chatting about white elephants has been terrific. Really enjoyed it. Okay, that’s the end of this episode of Economics Explored. I hope you enjoyed it. If so, please tell your family and friends and leave a comment or give us a rating on your podcast app. If you have any comments, questions, suggestions, you can feel free to send them to contact@economicsexplored.com and we’ll aim to address them in a future episode. Thanks for listening. Until next week, goodbye
Credits
Thanks to Josh Crotts for mixing the episode and to the show’s sponsor, Gene’s consultancy business www.adepteconomics.com.au.
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