Political accord on foreign policy, but not privatisation

Not quite so sure about PPP working all that well in the UK: check out any issue of Private Eye for the latest scandals.

In Europe, Public Private Partnerships (PPPs) are a well established way governments use to finance the contruction of hospitals, schools and other public amenities. In the UK, for example, PPP is often referred to as Public Finance Initiative (PFI),where private companies are invited by the government to invest in capital-intensive projects such as schools, hospitals and libraries without increasing public spending.

The Arguments for PFI 1. The government can commission public services it couldn't otherwise afford. 2. The private sector is more efficient and can run public services more cheaply than the state. 3. When the private sector funds projects, cost overrun is much less. 4. A private company puts up the money, builds the school and runs it for 20-25 years or so. The government meanwhile pays the company rent and services charges but keeps the ownership of the school.

Criticism of PFI Projects 1. Private companies will attempt to generate as much profit as possible for the private consortiums. 2. For example the Edinburgh Royal Infirmary cost 180,000,000 pounds to build and will cost 900,000,000 pounds to pay for over the 30-year period of the contract. So the argument goes that it may be more cost-effective and cheaper if the hospital was traditionally funded. 4. The buildings are cheap-looking and will become run-down and dated in a few years.

"National has discovered that New Zealand is too small to defend itself, can’t own every type of military hardware, can make only a 'token contribution' beyond the South Pacific, and needs an independent foreign policy."

This is interesting, as New Zealand has never claimed it could defend itself from major conventional attack and there is ample evidence in any public library to show this. New Zealand's forces were traditionally structured to defend against asymmetric attacks, such as mine laying, conduct local commerce protection and assist in the defence of our economic interests and broader strategic interests with army-based expeditionary forces of varying sizes. We can no longer perform any of these tasks. I suppose the supposed political consensus is OK if we ignore the world outside of the South Pacific and pretend that our standard of living, income and arguably our political independence are not affected by events beyond our immediate geography and region.

There is almost a counter-intuitive strategy here at play with National more or less endorsing the current foreign policy stance of the Government. By saying that it is happy with the current policy settings and indicating continuity if it became the Government, National is effectively shutting the door on any foreign policy initiatives from the Government or Winston Peters.

It also closes down the nasty business over who said what over Iraq and gives the Govt less ammunition to hit John Key with. Its a smart move by National to close down some Government attacks and close down the ability of the Government to move too far from where they are on foreign policy right now.

PPP may be a good idea when the government cannot afford a large number of new projects, and they probably cost as much as getting a loan out for a project. However, they are a silly idea when the government has plenty of money to spend on projects. These last weeks should hopefully show everyone National is still the same old right wing, market-driven ideological party of the 1990s. They have denied they are trying to fight the same old battles of the 1990s, but this is what they are doing. They can never be an acceptable governing party if purely driven by ideology, and not by what is best for the country. The same would be true for Labour, they could never be an acceptable governing party if they were purely driven by socialism.

You're right Colin, National has lost the argument. Facelift did a good satire a while ago on National and its policies. It consisted of the John Key character simply mentioning the word "policy" a dozen times in the vague hope the journalists would write it up as National coming out with a policy. Not too far from the truth it seems.

PPP's can work, however, not in NZ. Given that we're so keen to follow Australia's model, why don't we have a look at two of their PPPs and just how controversial they've been? The Sydney Tunnels - Harbour and Cross City, Melbourne's Southern Cross Station and Brisbane's Robina Hospital. All ran over time, over budget and all were held to ransom by the developers.

If we simply must have PPPs then the government has to not bow down to developer pressure and only offer a rate of return that is no higher than what government bonds can offer and must not be fixed in for any period. The development will be guaranteed by the taxpayer anyway so the developer will always end up making money.

But, let's remember we already have a similar setup to PPP operating already with Ontrack and Toll Holdings. We all know how great that has been going, and as a result our rail has fallen by the wayside and needs billions to bring it back up to scratch again. This is one classic example of why no state-owned assets or infrastructure should be taken from the control of the people.

PPPs are the way to go? Yeah Right.

What a delicious irony that Labour is attacking PPPs just as Dear Leader is photographed in Downing Street with the architect of Britain's PPPs- one Gordon Brown.

Colin, you miss the key driver of PPPs in the UK. It was the massive rebuilding needed after 18 years of right wing governments who failed to invest, and large budget deficits which meant the government could not finance all the required investment.

So they chose PPPs which save money now and cost more later.

Australia has no doubt chosen them for related reasons.

New Zealand doesn't need them. We have ample public capital, and most of our public construction anyway is already contracted out.

You have to wonder why National is so in favour of them. There doesn't seem to be any policy or economic reason for them.

John Key, today, Morning Report: "The war in Iraq is over".

I'm not sure what has happened since Monday October 1 (the most recent reported killings of foreign troops in Iraq), but it's wonderful news. Perhaps Key could let George Bush and John Howard know. They'll be delighted.

PPPs haven't always worked in Australia, particularly in NSW.

While infrastructure such as the Eastern Distributor and Westlink has worked well, the Cross City Tunnel has been a disaster, with it nearly getting bailed out by the state government. Throw into that the surface road closures that the company running the Cross City Tunnel and the NSW government forced upon the public, it's not nessecarily something I would want to see here. Similar issues also have occurred with the Airport Line too.

So while PPPs have their uses, universally saying they are better than government run projects isn't always true.

Also, if John & Co continue to talk about anything to do with privatisation of our healthcare or schools, he will lose my vote instantly, and right now, it's his to lose rather than Helen's to gain.