Where do we draw the line on public monies?
This editorial takes a strong stance for more clarity when the government of Victoria enters into public-private partnerships, especially about public funding that is involved. One project, the Royal Children’s Hospital, was actually indirectly funded by the government since they were the primary buyer of the $1.4 billion bonds issued by the project consortium. The primary concern with this arrangement is the lack of public disclosure as there was no mention of this government financing either when the contracts were signed or at any point during the project. While it notes that this not direct public funding, it’s not tax revenue, however it claims that it is a stretch to call it purely private funding as the government has claimed.
‘Private’ Royal Children’s Hospital redevelopment project used taxpayer cash
This article investigates the financial troubles of the Royal Children’s Hospital, a project that was developed through a public-private partnership under the guise that no public funding would be used. In January 2014 however, it was revealed that a government owned investment-company the Victorian Funds Management Corporation (VFMC) was the primary financial backer of the project. The bonds that VFMC bought to finance the project are no under pressure as Standard and Poor’s recently downgraded their credit to junk status because it found the rent being charged to be unsustainable. VFMC is responsible for investing $41 billion on behalf of government bodies including the super fund for paramedics and police and the Transport Accident Commission among others and any substantial loss could impact these agencies’ bottom lines. Article goes on to provide more financial details and history of the project, including how one of the main project managers sold its stake and never paid its promised $35 million donation to the hospital.