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