Government Joint Venture Exposed

Wayne Berry - Opposition Spokesperson on Employment

Media Statement - 23 May 2001

Today's Estimates Committee hearings into the 2001-2002 ACT budget have revealed most unusual joint venture arrangements for the Williamsdale Quarry, Labor Shadow Employment Minister Wayne Berry said today.

"We have watched over the last 6 years massive contracting out of government services by the Humphries and Carnell Governments. The government's contracting and tendering arrangements have been criticised by the Coroner, in the case of the tragic hospital implosion, and by the Auditor General in the case of the Bruce Stadium fiasco.

"Last week we uncovered the fact that the $300,00 Education Department contract with TransAct did not go to tender.

"Today we heard that the Williamsdale Quarry, expected to raise millions of dollars for the Territory, was set up by Totalcare but that the government had decided to enter into a joint venture. The trouble is that Totalcare not only wore all the set up costs and all the risks but also wore the debt of the joint venturer for the last year.

"According to Access Economics' advice to government the Williamsdale quarry would contribute either to the lowering of the Territory's deficit, or an increased surplus which could lead to the lowering of taxes for Canberrans. Access Economics said - 'The net present value of the Williamsdale quarry (at 5% real discount rate) is estimated to be close to $50 million in terms of GDP, and $37 million for private consumption. Yet Gary Humphries insisted on giving half of it away to the private sector, so half the benefit to the Territory has been squandered.

"The government also ignored a Totalcare business plan which concluded that the 'preferred option' was for Totalcare to fully operate the quarry.

"The pathetic response from the government was that by giving away a controlling interest in the quarry it was reducing its risk. Well, if the Access Economics report is any guide the government has given away half of its ability to raise revenue from the quarry.

On top of this Totalcare underwrote the development of the quarry and an easy payment plan for the joint venture. Today they told the Estimates Committee that while 50% 0f the quarry is worth $3.8 million, they couldn't tell us how they arrived at that figure and were about to assess what the quarry is really worth.

"Gary Humphries' obsession with the private sector continues to cost ACT taxpayers money," Mr Berry concluded.