Gordon Campbell Reviews The PM’s Presser – 25 Aug 08

Like the gong starting round one, Newstalk ZB’s Barry Soper got in the first shot – what’s the election date ? – but no one at Prime Minister Helen Clark’s first press conference in weeks expected a substantive reply, and we didn’t get one. No news about that today.

What we got instead were some side dishes – David Cunliffe unveiling the new digital strategy on Thursday, Prime Minister Xanana Gusmao of Timor–Leste paying a thank you visit to New Zealand, the release of the Social Report 2008, and the marking of the 20th anniversary of Dame Silvia Cartwright’s report on the Unfortunate Experiment at National Women’s Hospital. As Clark said in her introductory run through of Cabinet’s business, Labour is not expecting to pass everything on its legislative schedule, before election day. No urgency will be taken this week, but it could come later.

With the Emissions Trading Scheme waiting in limbo, there is no other pattern evident to Labour ‘s priorities in a week where the Policing Bill, the Public Transport Management Bill and the Walking Access Bill have been given pride of place. Members Day should see the passage of Judith Tizard’s Auckland Amenities Bill and Sue Bradford’s Corrections ( Mothers with Babies)Amendment Bill. In a further bid to sweeten the Greens, Clark stressed that the government was supportive and aimed to pass the Waste Minimisation Bill now in the name of Greens Co-Leader, Russel Norman.

Even if only some of Labour’s remaining legislative programme gets passed before the election, this will still take the Clark government out to November 8th or November 15th as the possible election dates – which could make it difficult for anyone to put together a new government by Christmas. As several observers have noted, Clark may not be expecting that this is going to be her problem.

Meanwhile, the giant shadows hanging over the entire press conference… first and foremost, the Greens sulking in their tent and consulting the runes over the Emissions Trading Scheme. Secondly, Maurice Williamson was sulking in his own personal Siberia after Bill English had unsaid for him on RNZ what Maurice had “over-enthusiastically” said the cost of road tolls were likely to be ( around $50 a week, quickly recanted at gunpoint ) once the Key government has ushered in PPPs to finance the construction of new roads.

If nothing else, the Williamson episode has been a reminder that beyond the top tier of John Key, Bill English and Simon Power, National’s second level team is a genuine liability. When given half the chance, Lockwood, Tony and Maurice do a good impression of the old Three Stooges team of Larry, Curly and Moe.

Until the government can ensure that it has a majority, the Emissions Trading Scheme is the 800lb gorilla forced to bide its time – “poised for passage” Clark says – before it swats everything else off the order paper. Government negotiations are continuing with the Greens, and with New Zealand First – and one presumes, within and between both.

During those discussions, is it still the government’s stance that the entry points for transport and agriculture are non-negotiable? Clark refuses to be drawn. Publicly, the government has made firm statements on those points, she says – but for now, the negotiations should continue in good faith, behind closed doors.

Mention of Williamson’s gaffe perks her up considerably. “The agenda was secret, until Maurice blew it. The prospect of having the $50 extra tax cut they promised the average worker snatched away by the weekly [road] toll bill, of course, makes it clear that their policies are all about taking with one hand, and giving with the other. But you don’t end up any better off at all, and arguably worse.”

Williamson, she continues, strayed beyond his brief – which was to eulogize the role of private investment in roading and tolling – and into celebrating the virtues of having the private sector build schools and hospitals. “And of course, prisons are very much in that frame as well. Now, New Zealand doesn’t have a particularly happy experience with private money being brought in to build public facility in the health system.”

Clark recalls the case of the closing of Napier hospital. In its place, a privately built PPP-like health clinic facility was built, with a lease agreement back to the local district health board – “ Which would at the end of the lease, have seen the Board pay $20 million in rent, I understand, with still no ownership at all.” The new DHB set up by the new Labour government, she says, bought back the building because the deal on the lease was so bad. “We really have been down these roads before with the National party, on the partial privatization of core social infrastructure…”

Labour clearly wants to stake out differences between itself and National over the scope and management of PPPs. That’s not going to be very credible, given Finance Minister Michael Cullen’s apparent embrace of a PPP funding model in Auckland for the Waterview Connection roading project – which incidentally, will not be a toll road. A report on this project, Clark says, will be released shortly. Bill English, she maintains, was unclear on RNZ as to whether he was endorsing PPPs as a good idea, or simultaneously promising to borrow more money to finance the projects concerned out of the public purse.

Legislation mandating PPPs was passed five years ago, Clark points out. “One of the issues in New Zealand has always been in getting projects of sufficient scale to make that [ the PPP model] of interest….But its an area where you have to tread fairly carefully. Because the examples are legendary of where these kinds of projects have backfired in governments’ faces.”

So, what would an acceptable level of tolls be on a typical New Zealand road ? While not citing any general rule, Clark mentions the route connecting Albany and Puhoi – which, under an agreement to bring forward that project by ten years, saw residents agreeing to a modest toll of between $1.89 and $2 a day to help get the road early. A toll pitched at this level [ie, about $20 a week, under laws that currently require a free and realistic alternative route to be available before tolls can be levied] would go nowhere near meeting the cost of the road. Clark’s point being though, that this indicates the kind of toll level that might be considered acceptable by the community.

PPPs are shaping up to be the latest mutation of the old asset sales/privatization issue. While Labour has accepted the PPP model as appropriate for at least one road in Auckland, it will be seeking to demonise them when applied to schools, hospitals and prisons. The public may not get the distinction. Especially given that Labour has made the exception for roading – the source of many of the PPP horror stories in Australia – and given that it was the Clark government that actually passed the PPPs enabling legislation.

Labour would dearly like the use of PPPs to be seen as an ideological point of difference, based on whether some public services need to be kept out of the hands of the private sector. It may come down instead to a choice between managers. Which major party can design and enforce the sort of contracts most likely to protect the taxpayer from the real risk of being rorted for hundreds of millions of dollars by the major corporates invited on board to co-finance some of the state’s core functions? Big choices. Unfortunately though, the fine print of contracts is not usually what decides the election outcome.