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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2008-10-15 Daily Xml
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MARJORIE JACKSON-NELSON HOSPITAL

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (15:12): My question is also to the Treasurer. Is it now likely that the PPP proposal on the Marjorie Jackson-Nelson Hospital will be abandoned in favour of a debt-funded taxpayer build, and on what date does the Treasurer intend to make a decision on this matter and how will it be funded? Yesterday, the Minister for Health said publicly:

The hospital will be built through a PPP arrangement and that means it will be constructed by 2016.

However, in a media interview on the same day, the Treasurer said:

When we get to the point of actually going to the market, if that is not the best delivery model then we won't do it.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (15:12): And your point is? We should do it if it is not the best delivery model?

Mr Hamilton-Smith interjecting:

The SPEAKER: The Leader of the Opposition will come to order.

The Hon. K.O. FOLEY: The government has consistently said that—

Ms Chapman interjecting:

The SPEAKER: The Deputy Leader of the Opposition will come to order.

The Hon. K.O. FOLEY: —it intends to deliver the new Marjorie Jackson-Nelson Adelaide Hospital as a public-private partnership. We are going through the most significant financial crisis that the world has seen since the Great Depression. That will have an effect on decisions at the time. The latest advice I have, as early as this morning, is that we still expect the PPP delivery vehicle to be on track.

What you do with a public-private partnership is you have what is called a public sector comparator: a very sophisticated piece of modelling that compares the value for money of a private sector delivered vehicle with that of a government procured vehicle. If the PPP does not meet the benchmark of a publicly delivered project, you do not do it. That is standard operating procedure.

We have three bids in now for our schools project, which we are proceeding with. I cannot deliver any information to parliament as yet as to the status except to say this: they are three very good bids. I am told that the finance is locked away. We are doing due diligence on that to make sure that what we are being told is correct. Notwithstanding these financial times, I am told that finance is able to be provided by those consortia, and each and every one of them (I am told) is within scope in terms of the public sector comparator, so they can be delivered via a public-private partnership vehicle. That is normal procedure, and I do not expect anything to be different with the Marjorie Jackson-Nelson Hospital.

The Leader of the Opposition attacks anything. I think he was on radio today saying that he's now trying to 'ratchet these projects up', that he wants our grandchildren to pay for it, that he wants to get the benefits now for something that others will pay for, and that now the Auditor-General is saying that 'it is all coming unstuck'. Well, the Auditor-General is not saying that. He is merely making an appropriate observation that, given what has happened in the financial market, these things are becoming riskier.

Mr Hamilton-Smith interjecting:

The Hon. K.O. FOLEY: You don't think I read it?

Mr Hamilton-Smith: No.

The Hon. K.O. FOLEY: What he said was that, 'These things have become riskier. There may be a significant risk to the fundamental premise of whether a PPP provides a net benefit to the public compared to the conventional public sector procurement.' I have said that that is exactly the criteria and the measurement that we take with the public sector comparator at the time of deciding whether or not to proceed with the private sector bid. That is exactly what we do and, if it does not meet the public sector comparator, you do not procure it in that way. I have never said anything different. This notion that these publicly privately financed initiatives are bad is going against, not just the Labor government's approach to procurements, but the Liberal government's procurements.

Mr Hamilton-Smith interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: I think I am right, Minister for Infrastructure, that when we came to office, even though it was your good work that delivered the PPPs on the prisons and the courthouses, wasn't that preliminary work undertaken by the former Liberal government?

The Hon. P.F. Conlon: And their bridges were going to be a PPP, but they weren't going to cost anything.

The Hon. K.O. FOLEY: And their bridges were going to be a PPP. Apparently the state's only delivered public-private partnership to date was a project whose genesis was under the last Liberal government, under treasurer Rob Lucas. So Rob Lucas thought that a PPP approach to police stations and courthouses was an appropriate delivery vehicle.

The Hon. P.F. Conlon: It was. It was a very good delivery vehicle with an excellent outcome.

The Hon. K.O. FOLEY: And it was a very good one, but not for the leader, because he wants to throw mayhem and nonsense out there. I have no doubt that Colin Barnett in WA will deliver a number of projects via PPP processes, and I have no doubt that should there be other conservative governments, in the decades and years to come, they will do the same. The federal Liberal Party, of course, supports PPPs. They are an eminently sensible delivery vehicle, provided they can give you value for money in excess of what it would be to deliver under state-owned infrastructure.

As for this comment that we are hocking up our grandchildren for years to come, it is as simple as this: if we did not do a PPP, we would borrow $1.7 billion from the capital markets. We would borrow and build a hospital and that would be paid back over years. That is actually what you do in funding infrastructure. Today's taxpayer should not have to pay for infrastructure that will be used by people for 40 years or 50 years (four generations). I do not know how you would do it, how you would fund a $1.7 billion hospital out of, say, two or three budgets, without plunging your budget into deficit (which is borrowings anyway), or by ripping the guts out of every other area of government expenditure. This silly notion that he has, that he has been able to get away with, when he says that we should be funding capital work from our recurrent income—

Mr Hamilton-Smith: We will be paying far more for a PPP.

The Hon. K.O. FOLEY: He would be the first treasurer on God's earth, in all time, that would have ever been able to do that. And he has just made the accusation that we will pay much more under a PPP.

Mr Hamilton-Smith: We will.

The Hon. K.O. FOLEY: Is that a fact?

Mr Hamilton-Smith: Yes.

The Hon. K.O. FOLEY: How do you work that out?

Mr Hamilton-Smith: We are waiting for you to explain that to the taxpayers.

The Hon. K.O. FOLEY: What have you said to the private consortia that have met with you?

Mr Hamilton-Smith: That I want to ask the question of you.

The Hon. K.O. FOLEY: Do you? Do you reckon when Macquarie Bank and Leighton Holdings and Plenary Group and ABM Amro, and all of these companies come and beat a path to his door—as they should, as I have encouraged them to do to keep the opposition in the loop—do you reckon the Leader of the Opposition sits there all bravado and says, 'Oh, you're going to rip off the taxpayer and—'

The Hon. P.F. Conlon: He does, once he's got off his knees.

The Hon. K.O. FOLEY: 'Welcome, welcome, welcome!' Yes, I can just imagine, they walk in and he says, 'Oh, you blokes have ripped the taxpayers off and PPPs are dearer than the normal procurement processes of government.' Of course he doesn't do that. People have told me that you have actually listened to them and you have agreed that these are good concepts. I don't know whether that is true.

Mr Hamilton-Smith: Who? You made a claim, who?

The Hon. K.O. FOLEY: Who, who, who?

Mr Hamilton-Smith interjecting:

The SPEAKER: Order! The Leader of the Opposition will come to order.

The Hon. K.O. FOLEY: So you haven't told anyone.

Mr Hamilton-Smith: You made a claim, who? Name them now.

The Hon. K.O. FOLEY: I have just said, 'I've been told.' Now whether I have been told the truth, who would know.

Mr Hamilton-Smith: Who was it? Come on, who? Name them now.

The SPEAKER: Order! The Leader of the Opposition will come to order.

Mr Hamilton-Smith interjecting:

The SPEAKER: Order! I have instructed the leader to come to order.

Mr Hamilton-Smith: It was untrue.

The Hon. K.O. FOLEY: So, you have told business people that you think it is a crap idea. Do you think it is a crap idea? You have told people.

Mr Hamilton-Smith: You made a false claim. Either state your facts or admit that you—

The Hon. K.O. FOLEY: I apologise. I obviously have wrong information; I apologise.

Mr Hamilton-Smith: Here you are, caught out.

The Hon. K.O. FOLEY: You are telling me that you have not said it. Who am I to believe? I don't care.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: Look at the laughing twins up there. Have a look at them.

Mr Hamilton-Smith: You cannot be believed.

The Hon. K.O. FOLEY: I can't be believed. He tells untruths wherever he goes. The Leader of the Opposition has no credibility, he will just say whatever he needs to say at any given time and—

Mr Hamilton-Smith: You were just caught out.

The SPEAKER: Order!

The Hon. K.O. FOLEY: No, I haven't been caught out. I said that I have been told that you have been supportive of PPPs, and I have said that, if I have been told something wrong, I apologise. You are opposed to them. Have you told business you are opposed to them?

Mr Hamilton-Smith: I ask the questions.

The Hon. K.O. FOLEY: He won't answer that question, will he? Have you told business that you are opposed to it.

Mr Hamilton-Smith interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: Have you told business?

The SPEAKER: Order! The Treasurer will take his seat. The Treasurer asking questions of the opposition does not assist me in my keeping order of the chamber.

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