PPPs Pose Risks To New Zealand Workers

The PSA is warning that Private Public Partnerships (PPPs) will lead to New Zealand workers losing their jobs, being paid lower wages and having conditions reduced and poorer quality, and more expensive services and infrastructure.

Privatisation is based on the myth of private sector efficiency, which in reality equates to reducing service and staffing levels, wages and conditions for workers so companies can turn a profit.

Private companies need to make a profit. They do this by reducing service levels, staffing and wages and conditions, Fleur Fitzsimons National Secretary of the Public Service Association Te Pūkenga Here Tikanga Mahi says.

We saw this in 2015 when British company Serco lost the right to manage Mt Eden prison after videos surfaced of fight clubs in the prison. It emerged that drugs and cell phones were not controlled, there were inadequate staffing levels and staff turned a blind eye to violent behaviour.

"PPPs are a failed model. It makes a false assumption that private enterprise will be more efficient. The reality is the need to make a profit means money is taken away from providing the service.

PPP contracts have hidden costs because private sector borrowing is more expensive, and they are highly complex and expensive to set up with tendering, advertising and procurement processes needing to be paid for," Fitzsimons says.

Public services, such as health, social services, prisons and education, are by their very nature a public good that the State should provide directly.

"Delegating provision of public services to corporates reduces the public control and oversight of how services or infrastructure is managed over the life of PPP contracts.

Contracts reduce the ability of governments to intervene for the public good and performance failures can get hidden behind a curtain of "commercial confidentiality".

Ultimately the taxpayer ends up having to bear the risks of the contracts because the State has to intervene when the corporates fail or fail to deliver a safe service, Fitzsimons says.

Note:

The Public Service Association Te Pūkenga Here Tikanga Mahi is Aotearoa New Zealand's largest trade union, representing and supporting more than 95,000 workers across central government, state-owned enterprises, local councils, health boards and community groups.

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