Should Melbourne ditch train and tram franchising?

Whether Melbourne's trains and trams are government or privately operated has long been controversial.

Ardent proponents of either exaggerate claims about the benefits of their proposal and the pitfalls of the opposite. Both are often wrong; examples of both good and bad operations exist for both private and government operation. In the 'real world' considerations other than operator ownership tend to be more important to whether the service provided is good and efficient. 

Last weekend's state Labor Conference had a motion from the ALP-affiliated Rail Tram and Bus Union that proposed a path to government operation for our trains and trams. It passed unanimously. 

The politics

The Labor government does not necessarily agree with or implement policy motions passed at the party's state conference. However this motion passing strengthens the hands of those who want franchising ditched. Also the government is facing a state election next year. 

Taking back train and tram operations, like reviving the SEC and working from home, is the sort of policy that both appeals to the party's base yet does not repel centrist swinging voters. Like these it's also bold enough to generate headlines and discussion. 

Opposition may be weak or easily countered with only an older minority of voters remembering the 1990 era industrial unrest that plagued our (then) publicly operated transport. And an appeal to the base would be particularly valuable right now to enthuse supporters to hand out and scrutineer given falling branch memberships (an issue across both major parties). 

If public operation can be established to not cost any more (a claim made by SA's electorally successful Labor government when it reversed rail privatisation) then reversing privatisation might, unlike other policies like schools and hospitals that do include spending, be sellable as being financially responsible while furthering 'Labor values'.

However there is potential tension as the RTBU will ultimately want more than a zero cost basically symbolic change. That is for state operation to come with leverage in the form of greater influence with management and more favourable conditions for its members.

Such increased influence may not always be consistent with what provides best value for passengers and taxpayers. NSW and Qld have potential examples including opposition to Sydney's very successful driverless metro and Brisbane's high rail staffing to passenger ratio. But as an efficient counter example, Perth's state-run trains have a much lower staff to passenger ratio than Brisbane's while operating twice as frequently, carrying more people and delivering the highest customer satisfaction. If we were to go for state operation then a condition of it should be to import Perth's methods rather than Brisbane's, even if it requires poaching their managers. 

Under government operation the life of a Labor transport minister may become harder, as demonstrated by the fast turnover of them during the Cain-Kirner era and more recent strikes on Sydney's rail network. Indeed, prior to Gladys Berejiklian in NSW and Jacinta Allan here, being a transport minister was almost a poisoned chalice for the leadership hopeful.

DTP, having got comfortable with private franchising, would likely prefer the minister to keep it; not least as franchising has spawned its own sub-industry of franchise management advisers, bureaucrats and bid-writers whose elite swap between operators and regulators. It may also prefer a buffer, such as a private operator, to keep its planning work separate from industrial considerations.  

Older party members will warmly welcome government operation as a winding back of 'Kennettism'. Younger members will value it as an example of Labor acting on something that neither the 'Greens Political Party' nor the Victorian Socialists cannot as neither is a party of government.

Amongst voters there is a soft cynicism towards privatisation which works in Labor's favour. However there is also a dislike of extreme union militancy and protests especially in more temperamentally conservative north-west, north-east and eastern suburbs with comfortably-off middle-aged demographics. That can work against Labor if it is seen as being weak in countering unrest or disruption to services.   

Weigh these up and ditching the private transport operators certainly wows the party and union faithful. Less so for the bureaucracy and minister. But if the politics is compelling enough then maybe it's something that a twelve year old government might consider to show it's still energetic and producing ideas.  

Policy pros and cons

Something might be good politics but it might not be good policy. So let's look at that in more detail. 

If the motion encourages the government to scrutinise the value for money we are getting from our private operator franchise agreements then it may have done some good. It may be that, especially given it's public money involved, too many things are 'commercial in confidence'. Someone needs to sit down to see how much service we're getting per dollar we're getting and how this compares across other cities. 

What we do know is that (through the fault of government, not the private franchisee) that Melbourne's asset utilisation on its metropolitan rail network is poor with only about half the lines only getting a frequent service a few hours a day with 20, 30, 40 and even 60 minute gaps at other times. This is increasingly out of kilter with modern travel patterns with greater evening and weekend activity. 

If savings are identified my first choice is that they get used to fix Melbourne's notoriously infrequent off-peak train timetables. Although you'd also be expecting the unions to push for their members to get this instead for example through increased staffing or pay.    

What are other pros and cons of private franchise versus government operation for our trains and trams? I sum them up in this video. 

To summarise, the bar to justify a change from the transport operation status quo on policy merit (as opposed to political feels) grounds is very high.

Unless either service quality or value for money is poor, changing from what you have currently (whether public or private operation) risks having so few benefits that it's not worth the trouble.

And there may be opportunity costs due to the process wasting everyone's time, 'crowding out' genuinely useful improvements that actually make a real difference to the passenger experience. 

For more background see my history of train and tram franchising. The continual (and wasteful) rebranding associated with early franchising can be read about here. 

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