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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2008-11-11 Daily Xml
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MARJORIE JACKSON-NELSON HOSPITAL

Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (14:42): My question is to the Treasurer. Does it remain the firm promise of the government that its proposed Marjorie Jackson-Nelson Hospital will be a public-private partnership?

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:42): I stand to be corrected—the Minister for Health may help me here—but I think I have been consistently on the record as saying that our preferred method of delivery for the Marjorie Jackson-Nelson Hospital is a PPP, provided, of course, that it meets the public benefit test—the public sector comparator—and it is the best way of delivering the hospital.

I guess I can take that question a bit further. What the member is probably alluding to is the current financial crisis we are in. Is that going to make it harder to get PPPs away or not? The answer is yes, it will. There is no question that what has developed in recent months is a capital drought. It is reported widely; it is not a new fact or revelation. The banks of the world today are not lending, and it is very difficult for people to get access to sizeable links of capital. We now have before the government the PPPs for the schools projects. The last advice that I had is that all the bids that we have in have met the public sector comparator; that is, they offer value for money and finance is available.

The Marjorie Jackson-Nelson Hospital will go to tender with a letting of contracts, I think, from memory—I stand to be corrected—some time during the calendar year 2010. One would hope that, by the calendar year 2010, there is a restoration of normality in the world's financial markets and that a PPP will get away just nicely. If we do not have a return to normality in the world capital and equity markets by the calendar year 2010, we will then be dealing with a whole different environment than we are today, and whether or not you can get PPPs away or not will be the least of our problems if this thing goes on for another two years.

As we have always said, the issue is not, in the view of the government, whether or not the Marjorie Jackson-Nelson or any project is a PPP. The core decision of this government is to build a brand new hospital: the largest, most modern and sophisticated, providing the best quality of health care anywhere in Australia, arguably, anywhere in the world. The method by which we deliver it is simply a matter for governments in terms of ensuring we do it in the most financially affordable and appropriate way. We think that will be a PPP. If market conditions are such that it is not, then we can do a direct procurement because ultimately it does not make a significant difference at all to the balance sheet of government because PPPs are counted as on-balance sheet. It is about the delivery model. You do not sign up for PPPs as the be all and end all; they have to give value for money, they have to be the most affordable way to do it. I do not think we have ever said anything different.

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