(protestors at the Investment Summit in Auckland, making
noise during Christopher Luxon’s opening address –
13/03/25) / Supplied
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.”
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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.
