Opponents say governments favour PPPs because they shift the project off the government's balance sheet. While this may have been true in Australia in the late 1990s, balance sheet treatment is no longer a driver of Australian PPPs.
Currently, most Australian governments will only commit to a project following the allocation of its full capital costs within the relevant government's budgetary cycle. If the government chooses to proceed with a service-payment PPP model, it reallocates that capital allocation to cover its future service payment obligations, which are shown in its balance sheet as a liability.
From 1 January 2019, AASB 1059 will also require most user-charge PPPs to be accounted for on the relevant government's balance sheet as an asset with a corresponding liability reflecting the unearned user-charge revenue over the remaining concession period.