Thursday, July 20, 2006


Public Private Partnerships, that's what PPPs stands for and they have become the favoured finance tool for governments over here in Australia. Some bright spark in the private banking world came up with a what was a good idea for the banks and financiers and sold it to the treasury officials at all levels of government.
I think they caught on in the way they have because we had a period in the 1980s -90s when government debt had become a bad word and these PPPs can disguise the cost of the debt and the government looks like it isn't borrowing the money. The end result is that as a society we pay way over the odds for infrastructure finance, on the pretext that the private sector is taking a risk, like a business taking out a loan to develop a project.

The problem with this argument is that there is no risk. The government isn't about to go away, fail, disappear. The infrastructure being built/financed is a school, hospital, college, road, etc. The amounts of money being wasted on high fees and interest charges is not chicken feed. To add insult to injury, the governments that are doing this are by and large Labor, and Labor voters don't like this type of private finance for public infrastructure.

Chickens: Are being fed on Soya beans grown on land cleared from the places like the Amazon rain forest. Think about it, how green is my chicken?

On a lighter note, all the PPPs in the world can't take away the beauty of a sunny winters day, even if it is bloody cold.