Other Labor states are ‘leaving South Australia for dead’ by using significant private investment to help tackle massive public sector infrastructure backlogs, Shadow Treasurer Rob Lucas said today.
Other Labor state governments in New South Wales, Victoria and Queensland are using Public Private Partnerships (PPPs) to help tackle backlogs in funding for schools, hospitals, TAFEs, roads, public transport and many other areas.
“However, in South Australia the Rann Government would prefer to play politics on this issue such as signing ‘anti-privatisation’ decrees and blaming the former government or federal government rather than seriously tackling the issue,” Mr Lucas said.
“Whilst the Rann Government has claimed it supported the use of PPPs in tackling the infrastructure crisis, the reality has been it has used every excuse in the world not to use PPPs.”
In its first two years the Rann Government spent more than $6 million on a specialist PPP unit in the Department of Treasury and Finance which had originally been established by the former Liberal Government.
In 2003 the Rann Government claimed it was considering using PPPs in up to 17 separate projects being proposed by 11 government agencies.
“However, the reality has been that in more than four years the Rann Government has only concluded one modest-sized PPP deal involving country police stations and court houses.
“In fact, in 2004 the Rann Government’s most significant move was to remove the title of PPPs from its specialist advisory unit and rename it the Project Analysis Branch!”
The extent of the commitment by other State Labor Governments to the use of PPPs is mind-boggling. Whilst there are many examples of roads projects, some other examples of recent PPPs are:
• Two separate projects worth more than $300 million in NSW involving 19 schools for either redevelopment or new construction.
• Victorian Government $250 million redevelopment of Royal Women’s Hospital and proposed $850 million children’s hospital.
• Victorian Government $367 million convention centre
• Victorian Government County Court project
• Queensland Government TAFE project
• New South Wales water services projects
It is also widely expected that the Victorian government is about to announce a major schools redevelopment project based on the successful New South Wales model. Some teacher union leaders have even publicly endorsed the proposed PPP model.
The Blair Labor Government in the UK has actually implemented more than 400 PPPs with a total value of more than $97 billion. A recent National Audit Office (NAO) study found that 80% of PPPs were delivered within budget compared to just 27% delivered within budget through traditional means.
The NAO study also found that 76% of PPPs were delivered on time compared with just 30% delivered through traditional means.
“Given the Rann Government’s problems with massive cost blowouts and completion delays with a series of transport and hospital projects, the Rann Government would be well advised to consider the greater use of PPPs as part of its policy response.
“Whilst no one believes that all capital works projects should be delivered as PPPs, there is no doubt many other governments have shown they can play an important role in meeting infrastructure needs.”
One further advantage of PPPs is the ability to spread the cost of expensive but important capital works over the life of the project rather than existing taxpayers having to meet the full cost up front of the investment.
“It is now time for Rann, Conlon and Foley to take off the ‘ideological blinkers’ and start to make decisions on the basis of the merit of the case and whether it is in the long-term interests of South Australians.”
