KiwiFM: Wallace & Manning Analyse Nat's PPP Policy

Monday, 4 August 2008, 6:14 pm
Article: Scoop Audio

Scoop co-editor Selwyn Manning raises the question: If a National govt builds the infrastructure, will it also pay for the service? Or are we seeing a policy that will have the user pay a private provider for essential services? (While listening, click here to jump to background...)

Background to audio: In the 1990s the National government used to say… 'we are not into bricks and mortar. We are not into building the facilities.' In the health sector it operated funder/provider commercial models. The health funding authorities were fed money from the government coffers. Health providers contracted to the funding authority for the right to provide healthcare services. This was a public and private provider mix.

In health, tax payer money went into paying the provider of the service. No money was there for building new hospitals. South Auckland Health (Crown Health Enterprise) had to borrow off private financiers and dip into the public's generosity via charities to pay for the Kids First hospital.

Now, National is turning this around.

Currently, it is vague as to whether its PPP policy will extend to the essential social services. But we do know National is planning to build infrastructure… $5 billion worth and borrow from overseas to pay for it. Roading, ICT fast broadband networks, prisons, and other strategic New Zealand assets are on the list. But can it afford to run the services too? And again, can it afford to pay for the service?

The PPP policy is now beginning to take shape. From 2009, National wants to build and provide facilities. But it wants the private sector to provide, and profit from, the service. And who is going to pay for that service? The user or the govt? That really is the question that remains unanswered.

And will a National government franchise out the infrastructure and strategic assets of some to companies? If so, a National government can boast a sizable public/strategic asset portfolio - but contracts out to the private sector to operate and profit from the essential services.

Will this service be more efficient than the current public service model? How will this PPP model remain accountable to the public it is designed to serve?

John Key and Bill English need to roll out the detail of their model so there is no second guessing. The electorate deserves to decide whether their version of PPP policy is proper, prudent, and worth voting for.

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