Tenants in our own land

A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.

Opinion

Re: Government considering different funding models to build new hospitals, Dec 9 RNZ story.

This is what I’ve been saying. It looks like our new Government wishes to privatise our public services in partnership and co-governance structures and lease backs to profit-takers.

If a government borrows to build a new hospital, it eventually gets paid back and we own it. The value of the building increases through time and the value of our publicly owned asset will increase.

If a private profit-taker builds a hospital and we lease it back, we’re, in effect paying for the building but we will never own it. We will keep paying long after a building loan would have been been paid for.

It’s a bit like a landlord arrangement where the tenant covers all the costs and the landlord still owns the house and makes the capital gain. It sounds cheaper because a government doesn’t have to spend as much money up front, but it’s a false economy.

If a government borrows, those loans are for a limited time, they get repaid and, eventually, that’s an end to the payments.

This way the payments never end and the building owner is often guaranteed a reliable tenant for life, with very little risk.

We’ve seen this with the accommodation allowance when state houses were sold. Now we pay the never-ending subsidy, which ends up in landlord pockets instead of repaying the cost of the state house.

The cumulative value of all these loans and perpetual lease payments will sink Aotearoa in the end. We will own nothing and be tenants in our own land.

Mary-Ann de Kort