[Greens-Media] Time to ditch the secretive PPP model for building our state schools - Sue Pennicuik MLC

[Susan.Pennicuik at parliament.vic.gov.au]

Wednesday 29 October, 2008

Time to ditch the secretive PPP model for building our state schools

Greens MP and education spokesperson Sue Pennicuik said today that the 
State Government should ditch the PPP model for building state schools.

"Given the current financial climate and the lack of any real evidence 
that PPPs provide a long-term benefit to taxpayers, the government should 
stop stubbornly persisting with a public/private partnership model to 
build 11 new schools in Victoria", said Ms Pennicuik. “One of the major 
problems with the PPP model is their lack of transparency. The Treasurer 
says they represent better ‘value for money’, but the contract details are 
secret so that this assertion can never be properly evaluated." 

"If we've learned anything from the world financial meltdown, it's surely 
that the private sector certainly does not do everything better. We should 
not be entrusting essential public infrastructure to this model", she 
said.

"I am staggered that the state government should be continuing with this 
private sector deal to build new state schools. The risks of this reported 
deal are not trivial. One of the consortium partners – ABN Amro Australia 
is majority owned by the Royal Bank of Scotland. RBS was recently bailed 
out and subsequently taken over by the British government." she said.*

"The Greens will continue to oppose PPPs. UK evidence shows that they are 
not cheaper over the life of the contract, school upkeep and maintenance 
can suffer and there can be hidden extra costs in escalation clauses. We 
also need to know what happens in the event that the private partners 
fails. Inevitably, the tax payer picks up the tab. Don’t tell me it can’t 
happen – not after what we have seen recently in financial markets."

BACKGROUND
*This followed a collapse in the bank’s share price as investors became 
alarmed by reports that RBS was close to insolvency. RBS was earlier 
reported to have sustained huge losses stemming from their exposure to 
billions of dollars of ‘toxic” structured credit investments. In 2007 RBS 
paid $48 billion dollars for Dutch investment bank ABN AMBO. Since 
considered to have been “a deal too far” the acquisition left RBS 
struggling with a mountain of debt.

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