Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

There are a few great lessons to be learned in the running of economies. When it comes to economies, the economic bottom line should never be scrambled. What we have seen in Queensland, regrettably, is the creation of a new instrument that supersedes PPPs—that is, BOOTs. We have seen them in other states. Finally, this innovative program called BOOTs has led to investment in shiny new schools in Queensland. That seems quite innocuous. But in reality the economic figures behind these BOOTs are as secretive as the Middle Empire itself. It is almost impossible to get these figures out of the state government. Luckily, some of those figures came my way last week and they are quite alarming.

The first thing to remember is that building seven schools should cost around $300 million, and that is fair enough. But the agreement to build seven schools in Queensland may end up costing the taxpayer around $1.1 billion. If you did an analysis of that figure, over 30 years the repayment rate is in excess of 10 per cent per annum. The cost of money is about half that—the commercial rate for lending money to a sovereign state is the bank bill rate plus one per cent—so what you see here is a potentially huge skimming of future taxpayers’ money into the pockets of the private sector over three decades. I am not about to say that operating and cooperating with the private sector is a bad thing, but I make the point that, once a state economy is so bereft that it cannot even fund the building of schools economically and the only option available to it is a BOOT, it is quite sad, for the simple reason that the deal they strike can be quite ordinary.

I note there were four or five banks which initially looked at funding these BOOTs. All but one pulled out, and even that one refused to fully fund these seven schools. What we were left with was a major construction company to fill the void, to purchase the debt commercially and then effectively live off a 30-year stream of taxpayers’ money being directed as interest payments and profit straight into the private sector. To me that is a great tragedy. I reiterate that there is no great problem with funding infrastructure publicly through a BOOT, but, when the economy is so weakened and so much debt is carried that a BOOT is the only option available, we will see what we have seen already with the Queensland government—they simply sell off public assets at the bottom of the market for the worst possible economic agreements and they build schools at enormous cost.

For every dollar with which these schools could have been built today, future Queenslanders will pay an extra $3.50 over 30 years. The children who are in those schools now will be paying off that debt for 30 years from today. (Time expired)