Now all the self congratulations of how well we hosted the Billionaire Investment Club have passed, let’s ask again, what were we actually selling at this investment summit.
The Private Public Partnership model is deeply flawed…
Campaign groups, economists and unions have come out against the government’s drive for Public Private Partnerships (PPPs), calling them short-sighted, inefficient and expensive.
“Farming out infrastructure development to the private sector lumps substantial costs onto taxpayers, both for funding exorbitant private sector profits, as well as the more expensive cost of private sector borrowing,” said Edward Miller, Researcher at the Centre for International Corporate Tax Accountability and Research.
“Infrastructure investors are already lining up for handouts like concessionary tax rates and greater scope to artificially reduce taxable profits. The experience in letting the private sector run our electricity generation sector has shown that cash for shareholders consistently trumps investment in new generating infrastructure for Kiwi households and businesses,” said Miller.
“There is no financial case for PPP’s in New Zealand where the Crown can borrow more cheaply”, said CTU Economist Craig Renney. “The Government’s own PPP guidelines state that. We shouldn’t be handing profits to overseas financiers when it comes to building the schools, hospitals, and essential public services Aotearoa needs. We will all pay more in the long-run.”
Grace Newton, from campaigning group ActionStation added; “there is a much cheaper way of building what we need, and that is to finance infrastructure ourselves – rather than pay rent to an asset management company who doesn’t even pay domestic tax. PPPs mean we end up paying more for a slower job, with far less checks and balances, let alone future proofing..”
“If we consider that the economic argument doesn’t stand up for PPPs, and they are in fact reckless, then we need to question why this government is pursuing them – and can assume that it is ideological,” says Newton.
“This would track with similar decisions from the coalition – such the corporatisation of our school lunch programme, moves to privatise our healthcare system, and the stopping of hundreds of state housing developments to make way for the private market. This is despite 72% of New Zealanders thinking that the government should be building state housing at scale – showing that the public appetite is for well-funded services, not privatisation.
“When public services and infrastructure are handed over to private companies, we all lose – it ultimately leads to corporate profits rising while we’re left paying more for lower-quality services”, said Newton.
…PPPs are a joke and we are seeing how they impact our School Lunch programme perfectly…
…so we are giving corporations the opportunity to rip us off, and who exactly does own NZ?
Australia is our biggest threat, our farmland is under constant threat, and our debt issue isn’t with Government debt it’s private debt!
PPPs aren’t a solution and neither is more exploitative industries.
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As I have been saying for some time the elephant in our economy is private debt not government debt .There fore the government should infact borrow the billions needed and in the case of roads use tolls to repay that debt .For exampe Tauranga used tolls to pay for its new bridge and paid that debt in a short time .The Auckland harbour bridge was tolled from day one and had those two projects continued to be tolled the money could have paid for a second crossing by now .We need to get into paying foward not paying after .So lets bite the bullet and start doing the mahi now and get those revenues comming in .Start with the new roads being built or have been recently built such as trans gully and the holiday hiway to Warkworth .Tolling will be more effective than congestion charges and will kill two birds with one stone and if used in cities will boost the use of public transport .
You can see their inconsistent thinking with the online gambling situation, I heard someone say on RNZ that having regulated online gambling was better than the situation now however when it comes to recreational drugs there’s not a chance they will use the same logic. While I do not support either habit I guess that their supporters think it is socially acceptable to profit from gambling even though their destruction of the economy is probably increasing the demand for both actions as a means of escape for some people.
It’s either:
a). PPPs
b). Belt and Road;
c). or New Zimbabwe, mid-tier Pacific Island level infrastructure by 2040.
Chose your poison.
You forgot
d). Government borrowing at favourable interest rates – accompanied by taxing wealth and unearned income properly to maintain a reasonable fiscal balance. The latter is something we have consciously and deliberately failed to do for the last 40+ years in order to force this crisis onto the population and make privatisation inevitable. I think you are a propagandist and a fool.
If only…….
The reality would be Wealth + Capital Gains Tax to fund shortfalls in operating expenditure due to increasing public service numbers and pointless spending. This is what both sides have done over the past 40 years – both LabourLite and Labour. Neither side can help itself.
100% agree
Anyone who quotes or mentions Zimbabwe as a supposed important wise point illustrating our situation gets my derision. Stop dishing us up last century corpses, our politicians and avid wealth gatherers and accretors want fresh ones. So put that up your left nostril FtTank.
Or get the government to borrow some money Frank. Are we still falling for this bullshit line about government debt being a burden on the future generations? The line that is peddled by wankers who couldn’t give a flying f*ck about future generations. Many of those same tossers laud economies such as Singapore, until you talk about their debt to GDP ratio or their approach to the state’s asset base.
Govt bond issues are nearly always oversubscribed. Provide funding using govt infrastructure bonds at low govt interest rates.
Create a ministry of works at least as a head design agency. Build up some big local civil infrastructure engineering building companies full of kiwis that in the future can operate internationally and bring in foreign exchange.
You forgot one poison Frank COC. The last PPP the Kapiti expressway national fucked up and ended up costing us taxpayers millions more.
yes we could have built it our selves and now be paying it off by tolls and then keeping those tolls to fund the next project
Expensive today, cheap tomorrow. A great piece of road now. Worth every dollar now. Compare it to coming into Wellington via the Rimutakas…..
You know when the Lyttelton road tunnel was complete they charged 50c to use it, it paid itself off in 15 years! Madness not to do this again. After all those foreign companies want dosh and more than we would pay to borrow the needed money, plus why are we building motorways and continuing to ignore rail, and why are we building motorways that are going to take 4 minutes off the normal route…. NUTS!
The point that is being missed in the analysis is that PPP for infrastructure, such as major roads, typically have a fixed price, unlike a state run and financed project.
The most obvious case is the expressway from Warkworth to Ruakaka. It would be a three stage project with each stage being about $2 billion. The government has signalled that Stage 1 (Warkworth to Te Hana) will be let early next year, with construction to start in late 2026. Based on Barbara Edmonds’s speech, Labour seemed to be onboard with the overall project being a PPP. Logically there will be a progression of work. I would expect work on Stages 2 and 3 to start before stage 1 is complete. Probably a ten year project to do all three stages.
Expressway roads are ideal for a long term PPP commitment, given the toll based revenue stream. With these types of projects, which have an independent revenue stream, it seems both major political parties signing up to the concept.
It will be a huge boost to the north, if there is a guarantee that all three stages can be done by 2035.
Overseas investors invest here in order to extract wealth from NZ. Not to provide it.
Nah mate they are doing us a favour out of the goodness of their hearts. Privatise the profit and socialise the debt has always applied.
Who owns NZ with the right to disburse it? Good questiion. Was it one of those in a recent NCEA test that people decided was so hard it was above the ‘class’s’ reading and learning level??
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