Economists, Campaign Groups Hit Out At PPP’s Labelling Them ‘Ideological, Reckless’

Friday, 14 March 2025, 3:25 pm
Press Release: ActionStation

Campaign groups, economists and unions have come out against the government’s drive for Public Private Partnerships (PPPs), calling them short-sighted, inefficient and expensive.

“Farming out infrastructure development to the private sector lumps substantial costs onto taxpayers, both for funding exorbitant private sector profits, as well as the more expensive cost of private sector borrowing,” said Edward Miller, Researcher at the Centre for International Corporate Tax Accountability and Research.

“Infrastructure investors are already lining up for handouts like concessionary tax rates and greater scope to artificially reduce taxable profits. The experience in letting the private sector run our electricity generation sector has shown that cash for shareholders consistently trumps investment in new generating infrastructure for Kiwi households and businesses,” said Miller.

“There is no financial case for PPP’s in New Zealand where the Crown can borrow more cheaply”, said CTU Economist Craig Renney. “The Government’s own PPP guidelines state that. We shouldn’t be handing profits to overseas financiers when it comes to building the schools, hospitals, and essential public services Aotearoa needs. We will all pay more in the long-run.”

Grace Newton, from campaigning group ActionStation added; “there is a much cheaper way of building what we need, and that is to finance infrastructure ourselves - rather than pay rent to an asset management company who doesn’t even pay domestic tax. PPPs mean we end up paying more for a slower job, with far less checks and balances, let alone future proofing..”

“If we consider that the economic argument doesn’t stand up for PPPs, and they are in fact reckless, then we need to question why this government is pursuing them - and can assume that it is ideological,” says Newton.

“This would track with similar decisions from the coalition - such the corporatisation of our school lunch programme, moves to privatise our healthcare system, and the stopping of hundreds of state housing developments to make way for the private market. This is despite 72% of New Zealanders thinking that the government should be building state housing at scale - showing that the public appetite is for well-funded services, not privatisation.

“When public services and infrastructure are handed over to private companies, we all lose – it ultimately leads to corporate profits rising while we’re left paying more for lower-quality services”, said Newton.

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