The ‘fine print’ of Labor’s hospital PPP deal reveals massive financial exposure to taxpayers, Shadow Finance Minister Rob Lucas said today.
In evidence to the Legislative Council Budget and Finance Committee, Under Treasurer Brett Rowse confirmed taxpayers were exposed to additional costs for interest rate movements and some contamination costs.
Taxpayers will be responsible for ‘80% of the cost of remediation of unknown pre-existing contamination’ and ‘100% of contamination caused by the State.’ In relation to the latter case, Mr Rowse believed it might only relate to the period of the hospital project and took that question on notice.
“This exposure of taxpayers is contrary to earlier evidence given to the Committee that the private sector bidders would be responsible for all contamination clean up costs,” Mr Lucas said.
“Treasury also agreed to clarify who was responsible for the cleanup of any possible contamination of the underground aquifer.
“Mr Rowse also confirmed taxpayers will be exposed to ‘interest rate risk’ in certain circumstances.
“The ‘fine print’ of the PPP deal shows that taxpayers will take ‘base interest rate risk’ from the refinancing of the deal which is likely to be in about 2018.
“In simple terms, this means if there are significant interest rate increases when the first refinancing of the whole deal occurs, costs to taxpayers will be significantly increased.
“Average annual repayments costs could rise substantially over the current estimated average of $391 million per year or $1.1 million per day.”
Treasury also confirmed taxpayers will be exposed to costs for any legal challenge to the Development Plan Consent and also native title or heritage claims.
“It is now time for Labor to be transparent and accountable and publicly reveal all of the potential costs and risks to taxpayers hidden in the ‘fine print’ of the deal,” Mr Lucas said.