NSW Labor caves in on PPPs

Privatisation's third wave hits NSW

In a major win for the national and international privatisation lobby, nine new public schools in NSW are to be built and managed by private firms.

According to a report in the Sydney Morning Herald, NSW Treasurer Michael Egan claims that the $133 million deal will be $8 million cheaper than public management, or represent a saving of 4 per cent. No details were reported on how the calculation was made.

The Evatt Foundation has published many articles and critiques on PPPs, which were invented by Tony Blair's UK government. Major concerns include: the methods used for calculating the public cost of capital and for allocating and privatising risks; the off-balance sheet nature of the deals; the monopoly-monopsony relations between the government and the firms; the new political and technical risks that the deals create; the implications for labour; the long-term costs; and the lack of accountability and transparency.

With repect to Michael Egan's nine privatised schools, the immediate question is not whether the public will ever see the full details of the contracts: we know they never will. The crucial question is whether the the NSW Auditor-general will ever see the FULL contracts. In a stance repugnant to democratic accountability, no such commitment exists under the NSW government's PPP policy.

More broadly, as the Australian Auditor-General has recently observed about 'core' services:

Outsourcing and privatising areas traditionally considered public sector activities indicates that the size of the core is shrinking. A broader issue is whether, over the longer term, the public sector might diminish to a point at which it no longer constitutes a credible, effective or viable arm of sound governance.

Following are the resources on PPPs on the Evatt site: