Request for Information on Private Equity Contributions in Educational Projects and Value for Money Considerations
Adam Irish made this Official Information request to Erica Stanford
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From: Adam Irish
Dear Erica Stanford,
Under the Official Information Act, I request information on the repayment expectations for private equity contributions in educational projects.
Specifically, I'm interested in understanding how this approach is considered value for money. The Crown can typically borrow at the government bond rate, offering a lower risk return rate of 4.64% for 10-year bonds. In contrast, private equity investment usually requires a return exceeding 8%. This suggests that if the taxpayer funds a return higher than the government borrowing rate, and if the budget isn't balanced, we're essentially borrowing more at 4.64% to pay for the higher returns on the equity investment. Moreover, even if the taxpayer directly funds it, the interest cost for the project would be significantly less than the required return of the private equity investment if just at the government bond rate.
School infrastructure is typically not a user-pays system, and thus, taxpayers fund this directly in one way or another. It seems counterintuitive to promote private investment into schools when the government could initially fund these projects through debt at a cheaper rate, and fully own the asset at the end of the period. The cost of maintaining a fully owned asset is typically much lower than the lease costs that private investors require to generate a return on their capital. Moreover, by leasing, the Crown forfeits any potential capital appreciation, which is then incorporated into the market return that the private equity holder requires. Additionally, as a result, buying them out at a later date would cost significantly more. How does this approach align with the pursuit of value for money?
Could you please provide any briefings and analyses from the Ministry of Education and/or Treasury on this matter?
Kind regards
Adam
From: Erica Stanford (MIN)
Erica Stanford
Thank you for contacting the Office of Hon Erica Stanford, Minister of
Education, Minister of Immigration, Lead Coordination Minister for the
Government's Response to the Royal Commission's Report into Historical
Abuse in State Care and in the Care of Faith-based Institutions, and
Member of Parliament for East Coast Bays.
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Chris Penk. His email is [email address]. Minister Stanford
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this may be transferred to the Ministry of Education, they can be
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recent [3]statements.
Office of Hon Erica Stanford
Reception +64 4 817 6805 | Ministerial Email
[4][Erica Stanford request email] | Web [5]beehive.govt.nz |
Postal Freepost Parliament, Private Bag 18 041, Parliament Buildings,
Wellington 6160, New Zealand
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From: Erica Stanford (MIN)
Erica Stanford
OIA ACKNOWLEDGEMENT
Dear Adam,
Thank you for your Official Information Act 1982 (the Act) request, received on 11 March 2025, in which you requested the following information:
* Could you please provide any briefings and analyses from the Ministry of Education and/or Treasury on this matter?
Your request will be answered within the provisions of the Official Information Act.
Kind regards,
Office of Hon Erica Stanford
Office of Hon Erica Stanford
MP for East Coast Bays
Minister of Education
Minister of Immigration
Lead Coordination Minister for the Government's Response to the Royal Commission's Report into Historical Abuse in State Care and in the Care of Faith-based Institutions
Website: www.Beehive,govt.nz
Private Bag 18041, Parliament Buildings, Wellington 6160, New Zealand
Disclaimer: The information in this email (including attachments) is confidential and may be legally privileged. If an addressing or transmission error has misdirected this email, please notify the author by replying to this email and destroy the message. If you are not the intended recipient, any use, disclosure, copying or distribution is prohibited and may be unlawful.
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From: Erica Stanford (MIN)
Erica Stanford
Dear Adam,
On behalf of Hon Erica Stanford, Minister of Education, thank you for your email of 11 March 2025 in which you requested the following information:
- Could you please provide any briefings and analyses from the Ministry of Education and/or Treasury on this matter?
Your request has been considered under the Official Information Act 1982 (the Act).
The information you request is more closely connected with the functions of the Ministry of Education and Treasury. As such your request has been transferred to the Ministry under section 14(b)(ii) of the Official information Act 1982. You can expect a response directly from the Ministry and Treasury in due course.
Thank you again for your email.
Kind regards,
Office of Hon Erica Stanford
Office of Hon Erica Stanford
MP for East Coast Bays
Minister of Education
Minister of Immigration
Lead Coordination Minister for the Government's Response to the Royal Commission's Report into Historical Abuse in State Care and in the Care of Faith-based Institutions
Website: www.Beehive,govt.nz
Private Bag 18041, Parliament Buildings, Wellington 6160, New Zealand
Disclaimer: The information in this email (including attachments) is confidential and may be legally privileged. If an addressing or transmission error has misdirected this email, please notify the author by replying to this email and destroy the message. If you are not the intended recipient, any use, disclosure, copying or distribution is prohibited and may be unlawful.
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From: Enquiries National
Kia ora Adam
Thank you for the information request below, that was transferred to the
Ministry on 25 March 2025. The Ministry will consider and respond to your
request in accordance with the Official Information Act 1982 the Act).
Under section 15(1) of the Act, we are required to make and inform you of
our decision on your request as soon as reasonably practicable and in any
case not later than 20 working days after the day on which your request is
received. You can therefore expect to receive our decision on your request
on or before 24 April 2025. If more than 20 working days are needed due to
the potential workload and/or consultations involved in answering your
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request five days after you have received it. Any personal information
will be removed.
In the interim, if you have any questions about your request, please email
[1][email address]
Ngā mihi
Enquiries National Team | Te Tāhuhu o te Mātauranga | Ministry of
Education | TW
[2]education.govt.nz
We shape an education system that delivers equitable and excellent
outcomes
He mea tārai e mātou te mātauranga kia rangatira ai, kia mana taurite ai
ōna huanga
[3]Te TD huhu o te MD tauranga
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