Some of you will know that I’m a betting woman and I’m willing to wage a bet that the long-awaited new North East Hamilton secondary school will be on the list of school properties being prepared for a Private Public Partnership.
When in Government, Labour was prepared to go down the PPP path, where it could be demonstrated that it made good economic and social sense. But it never did. And it still doesn’t.
The private sector wants its hands on this school building ownership so it can make a buck out of the taxpayer.
And while they make a buck out of it, education will lose out. Not to mention the loss of control by the school and lack of access to school properties by the community.
Its another bad plan from a Government that has already run out of ideas. It is now reduced to following failed models from other countries – a bit like national standards really.
It has been a disaster in the UK and it will be here too.
PPP’s don’t work as they are ultimate form of privatise the profits and socialise the losses…
Good public schools with no NS BS please!
States like NSW use them because they offload costs to the Commonwealth, and they are cash strapped because they depend on Commonwealth payments for a lot of their costs.
Cant see how they can be more desirable commercially now that the depreciation on buildings has been removed. Whats the bet they make an exemption for situation like this. As well a new owner has no data on what maintenance charges are likely to be over a period of time , as a school might have higher wear and tear, a might end up the responsibility of the school.
And to add an extra element of circus Tolley will be running the show!!. Cant wait.
However I think English will be pulling the strings as he often is in Education ( his next job!)
Sue
Why head your blog with such an emotive heading as “Poor Pupil Performance …. ”
Do you really think school age children would know or even care who,s name is on the title at their school.
Private schools have private owners and most produce more than acceptable reults with their students.
The argument that communities will lose access to School Properties is plain wrong.
The School being the tenant will have the right to use the property 24 hours a day within the terms of the lease.
no different than a residential tenant who can have visitors after 4 oclock and at weekends.
If the landlord wished to write restrictive clauses into a lease then the tenant (presumably Ministry of Eduction) wouldnt or shouldnt accept.
The only issue I have is putting a cap in place for future rent growth to avoid “market ” rent increases.
Brendan didnt seem to have a problem with PPPs in Christchurch between council and Ngai Tahu.
“When in Government, Labour was prepared to go down the PPP path, where it could be demonstrated that it made good economic and social sense. But it never did. And it still doesn’t” – Better check with your colleagues Sue, you’re not all singing from the same sheet.
Its simple really. The private sector pays higher interest than the Government does to fund such ventures and then they need to make a profit on top of that as well. This means either:
Education costs the taxpayer more;
or
Cuts are made to the quality of the education to pay for the higher buliding costs.
Sue not as simple as you like to make out.
Its a gross generalisation to say a Government can get money at lower interest rates than corporates.
Their are probably a few Finance ministers around the world would disagree with you.
As you will know after 9 years in Government we are up to our ears in debt.
A corporate with good balance sheet and the security of a government tenant will probably get a very low interest rate.
Yes the corporate needs to make money , thats a given , but isnt the idea of PPP to save money.
Therefore if it dosent it wont go ahead.
Perhaps your campaign could be to ensure that PPPs only go ahead if there is a cost saving.
You claim that cuts are made to education to pay for “higher building costs”
Firstly the point of a PPP is the building is paid for by the private party ,therefore the Government still has the capital available or in NZ Inc case , dosent have to increase debt to fund it.
Secondly Governments have never been good at acheiving low build costs for anything.
A private company spending there own money are likely to be more diligent in saving their own money.
ACC is a prime example of the extra costs of construction when handled in house
Mark m After 18 months in government we are up to our ears in more debt than the previous 9, but I do see your point.
“Perhaps your campaign could be to ensure that PPPs only go ahead if there is a cost saving.” Fair enough, but it can’t be the only criteria can it?
Mark, that’s true about the private sector building the premises but then the property is leased back to the government over, say, a 30 year period. Whilst PPP looks good for the immediate balance sheet, over time the debt still has to be paid off, if overseas examples are used, especially with NuLabour’s obsession with PPP in the UK, at many times normal building cost and contracts weighted in favour of the private company.
Cross City Tunnel, anyone?
DeepRed, I thought the Govt’s contribution tot he leaky homes (reducing the burden on Auckland ratepayers) was prid quo pro, tunnel crossing costs covered.
Agreed Sue. It’s a total waste of money. Yet another way to hide what is tax payer dollars being wasted on shareholder dividends but taking it from the mouths (or rather brains) of our children.
Dumb and wasteful.
@Tracey: I meant this Cross City Tunnel.
Dumb and wasteful indeed, but make no mistake here, PPP is extremely attractive not just to Nat, but Labour too, and for the idea to have been completely dismissed is frankly nonsense. I would place a years salary that should Labour get back in, PPP will be used in some form, whether for schools, hospitals or other infrastructure. It has nothing to do with kids and education, it’s all about economics.
There are alternatives; either issue government guaranteed infrastructure bonds to the population. Require some of Kiwi saver funds to be invested in these watertight bonds.
Perhaps repatriate some of the Cullen Fund for that purpose.
Could all mean cheap credit and lower costs and a return to the taxpayer.
So don’t swallow the standard NACT tripe, time for Labour to be innovative and put the citizen first.
Here a great take on PPP form Half Caste Broadcasting
http://www.maoritelevision.com/Default.aspx?tabid=75&pid=7603&epid=6520
The standard has a post the points to another subject by the same guy.