The "Millionaires' Factory" invented the model
Australia's most successful export in this whole story isn't a road or a port. It's a financial structure — and the firm most associated with inventing it is Macquarie Group, long nicknamed the "Millionaires' Factory".
Macquarie pioneered the listed-infrastructure-fund model: bid to build or manage a piece of monopoly infrastructure — first toll roads, then airports, ports and utilities — fund it through listed or managed investment vehicles, and earn base fees plus performance fees for running it. The genius of the design is that the fees attach to the assets, not to any promise about public benefit. Macquarie is now among the world's largest infrastructure asset managers, and the template it built has been copied across the industry. verified
None of that is an accusation. Building a legal, profitable business is exactly what a company is for. The point is structural: the same policy machine that hands a private operator a monopoly also creates a very lucrative role for the intermediaries who assemble and manage the deal — and that role pays whether or not the public comes out ahead.
Sources: John Quiggin — how Macquarie built its model; SourceWatch — Macquarie Group. (Older "17% average annual return"-style figures that circulate about the early funds are dated and contested, so we don't rely on them.)
Heads they win, tails you lose
The single most important thing to understand about who cashes in isn't a personality or a company. It's a fee structure. Once you see it, the rest of the industry makes sense.
Here's why that matters. Because the base fee is charged on the assets under management — including the superannuation savings of ordinary members, per the last page — the intermediary is paid regardless of whether the public gets value from the toll road, airport or power line underneath. If returns are strong, the performance fee kicks in on top. If returns are only average, the base fee still flows. The manager's downside is capped; the fee is close to guaranteed. verified "2 and 20" is an illustrative benchmark, not one fixed rate
The tell: fees are charged on assets, not on outcomes A fee tied to your outcome would only be paid when the public actually benefited. A fee charged on assets under management is paid for existing. That's not fraud — it's the industry-standard model. But it means the people arranging and running the privatised monopoly are insulated from the thing you care about most: whether it was worth privatising at all.
Sources: John Quiggin — the fee-driven infrastructure model; SourceWatch — Macquarie. "2 and 20" is used here as the widely recognised shorthand for base-plus-performance fees; exact rates vary by fund and mandate.
The pitch versus the reality
Privatisation is sold on a simple promise: private managers bring expertise and efficiency the public sector can't. Weigh that against how the money actually moves.
The pitch
"Private expertise runs the asset better than government could. Investors take the risk, taxpayers are relieved of it, and everyone shares in a well-managed, world-class piece of infrastructure."
The reality
Fees are clipped at every stage — arranging the deal, managing the asset, and on the assets under management year after year — and those fees are paid whether or not the public gets value. The expertise is real; so is the clip.
Both sides can be true at once. Managers genuinely do run complex assets. And the fee model genuinely does pay them regardless of public value. The honest question isn't "are these people competent" — it's "why is a public monopoly structured so that a layer of intermediaries must be paid, in perpetuity, out of the price you're charged to use it?" That's a design choice, made by governments, not an accusation against any firm.
The revolving door
There is one more structural feature worth naming carefully — because it's the one most easily misread. People move between government and the infrastructure industry. Read the next two paragraphs slowly, because the distinction in them matters legally and morally.
Read this first: moving roles is legal and normal Taking a private-sector job after leaving government is lawful and commonplace, and naming someone who has done so is not an allegation of wrongdoing. Expertise built in public office has obvious value to industry, and there is nothing improper in an individual using it. The concern raised here is structural — about incentives and the weakness of the rules — not about the conduct or integrity of any named person.
A documented example: Mark Birrell, a former Victorian Major Projects Minister in the Kennett government, later joined the Transurban board (from 2018). We present this as one documented case of a well-worn career path from public office into infrastructure — not as proof of a pattern of wrongdoing, and not as any suggestion that Mr Birrell did anything other than take a lawful appointment. The point is simply that the path exists, and that it runs directly between the people who once set the rules and the companies that profit under them. verified one documented case, offered as illustration
Why is that a structural problem rather than an individual one? Because the guardrail is thin. Australia's ministerial "cooling-off period" — the time an ex-minister must wait before lobbying or taking related private roles — is just 12 months, and is widely criticised as weak and poorly enforced. A one-year pause is a short memory in an industry built on 50-year concessions. The risk isn't that any given person acts badly; it's that the rules are too weak to manage the obvious conflict when the same small pool of people writes the deals and then works for the beneficiaries. verified
Sources: Social Justice Australia — ex-politicians and the revolving door (Birrell → Transurban board, 2018); The Conversation — the revolving door and the 12-month cooling-off period. To be explicit: this section describes a lawful career move and a policy weakness. It makes no allegation of misconduct against any individual.
The tension at the heart of it
Follow the fees far enough and you arrive back at yourself. The super funds and their vehicle IFM Investors — owned by around 16 industry super funds — are among the biggest beneficiaries and owners of this infrastructure too. But there's a tension the industry rarely spells out: super members are both the payers and the nominal owners, while the fund executives and the asset managers take their fees regardless. You supply the capital, you pay the toll, and you nominally own the asset — but the layer in the middle is paid whether the arrangement serves you or not.
That's the whole rort in one sentence: a structure in which the public carries the money and the risk, uses the monopoly and owns it on paper — while a thin, well-connected layer of intermediaries collects a fee at every turn, insulated from the only question that matters to everyone else. Naming that structure isn't an accusation against anyone in it. It's an argument about how the rules should be written.
Know of an undisclosed conflict? If you've seen a conflict of interest that wasn't declared — a revolving-door appointment, an undisclosed interest in a deal, or a fee arrangement the public was never told about — we want documents, not gossip. Confidential tips to whistle@theradicalparty.com. We publish what we can verify, and we don't publish unverified allegations against named individuals.
Cross-references: Your own money · The secrecy · The ledger. Citations on Sources.