PPPs party-crash cosy electioneering

Malcolm Maiden, November 3, 2006

Storm clouds have developed over the Bracks Government's public-private partnership (PPP) alliances with big business, but Treasurer John Brumby insists the biggest of them all is still sailing under fair skies.

The Government committed $337 million over four years in 2004 as its share of a $1 billion convention centre on the banks of the Yarra, upstream of the Bolte Bridge. The project was aimed at reinforcing Melbourne's ability to attract conventions and major events, and was one of 19 measures announced that year to stimulate business and the economy.

According to Treasurer Brumby, "the results speak for themselves". Melbourne was now hosting about 50 per cent of all "knowledge economy" conferences in Australia, he told The Age last week, on the eve of the formal launch of the election campaign, "because we've got the facilities, and we go after them". The South Bank site of the new 5000-seat convention centre and 319-bed Hilton hotel was "a mass of activity", he added, and the Government was "on time and on budget" for an opening in early 2009.

International conventions have already been booked, and the Government projects revenue of $197 million a year when the facility is fully operational.

Shadow treasurer Robert Clark is less sanguine. The convention centre is running up to two years late, and is the latest in a line of Bracks Government projects that are "running over time and over budget", he says. "A Liberal government will change that with better planning co-ordination and management of projects such as the convention centre: business tourism is a high-yield market, and Melbourne has much to offer."

Such disagreement is a rare thing where tourism, major events and PPPs concerned, however, and that is hardly surprising. The tourism and major events strategy the Bracks Government is deploying was conceived and implemented first by the Kennett government, and it was the Kennett government that introduced the PPP financial structure that this year has delivered Melbourne's new railway station at Spencer Street, and in 2009 will deliver Australia's largest convention centre.

The practice of cloaking financial details of the PPP in a "commercial-in-confidence" veil also emerged during the Kennett years and, while the Opposition last month called on the Government to open the PPP process to scrutiny after a parliamentary joint committee report concluded that secrecy surrounding PPP deals made assessment of them impossible, its membership of the committee means it also partly owns the committee's decision to excise more than 30 draft pages in the report that are critical of PPP projects, including the new train station and the new County Court on the corner of Lonsdale and Williams streets.

Tourism is already a cornerstone industry for the state, and a key export earner. Access Economics estimates it contributed $10.9 billion, or 5.3 per cent, of gross state product (GSP) in 2003-04, and the Government's new strategy, released by Tourism Minister John Pandazopoulos on October 17, aims at revenue of $18 billion in 10 years' time, equal to at least 7 per cent of GSP. International visitors will fuel the growth, with China contributing 70 per cent.

The Opposition says growth in Victoria's market share has stalled. But its own plan hat-tips the existing one, by stating that a Liberal government would be "building on success". The two big parties agree on key elements: that international visitors are crucial; that the major events push must continue; and that air access is a critical problem for Melbourne and the state.

The Liberals are, therefore, proposing to adjust the present system, not overturn it. Tourism Victoria, the statutory body that oversees the industry, would be restructured to give the industry more power and distance it from the government of the day, and a Liberal government would also boost support for regional tourist centres - ironically continuing a shift the Bracks Government began after a regional backlash against city-centric Kennett government policies unexpectedly carried Labor to victory in 1999.

John Brumby revealed on Wednesday that, if re-elected, Labor would disclose more details about its PPP deals: the community was demanding more information and "we acknowledge that", he said.

He added that PPPs only accounted for about 10 per cent of the state's total infrastructure spend, typically on "larger,one-off projects which governments typically wouldn't construct".

How much more the Government's new disclosure policy tells us about the convention centre remains to be seen.