Written By: - Date published: 9:04 am, July 3rd, 2008 - 78 comments
Categories: assets -
Tags: railways
A day into the renewed public ownership of our railway system and it has emerged that not only did John Key help sell it in the first time and make a profit off the asset-stripping that followed. Further, his party’s policy of keeping the rail in private hands would have seen nearly all the network shut down by Toll even while the taxpayer continued to subsidise the company.
Toll was planning to shut down 8 lines, part of the Main-trunk line (including the part that goes through Taumarunui!), and the Overlander, leaving only two intercity passenger lines.
In the age of peak oil, the last thing we need to be doing is closing down a means of transport that is 4 times more fuel efficient than taking freight by road.
John Key sold our railways once and he would do it again.
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Scoopit!
Well shit, didn’t this backfire…
iprent – at least you now acknowledge that Helen Clark tried to smear John Key yesterday. To make things easier for you, and running the risk of being accused of link-whoring (just as well I have a thick skin eh!), all you need to complete your education on this matter is contained here:
http://keepingstock.blogspot.com/2008/07/helen-gets-it-wrong.html
I suggest that you, in this order:
* read the transcript of Q1
* watch the 3News item
This was a calculated, planned smear by Clark, aided and abetted by Winston Peters. If this is how Labour wants the election campaign to unfold, it is anything BUT a “minor” issue.
PS – captcha = basket history – a prophetic word for the government?
dilip: I’d say it is a legitimate question. If Key answered it then fine. If he didn’t, then I’d expect the posters here to say something about it. I’ve seen the same question asked of ministers.
The trucking question is a user pays question (I haven’t looked at it yet). From what I understand the road user charges haven’t gone up in 19 years? Morning report on way to work. From memory it is a rate per kilometre. WTF!
Other road user charges have gone up – including mine. Why should I give the truck drivers a subsidy. Unless they can show that they cause less damage to the roads relative to cars than they did 20 years ago? I’ll bet that they can’t.
I would like to see steve pierson do a graph on amount of money raised by government from road use including road user charge, fuel excise and gst on fuel and amount of money spent on roads. That would be very interesting.
[Dilip. Labour introduced 'full hypothication' a few years ago - that means every cent collected in petrol tax, road user charges and other transport revenue is spent on transport infrastructure. National didn't have that and was usng petrol tax to fund other services. SP]
I like this, everyone says Labour have a deathwish; have ‘lost it’ when they are acting responsibly and not putting their party ahead of the country, by increasing RUC as required to fund the billions of dollars of roading that truckies profit from.
And all you lot can do is gloat about how useless they are. Pathetic, a new low…
insider, dilip, vto, Higherstandard, regarding the govt’s poor negitiating skills by only allowing Toll access to their tracks as maintained by ontrack – Please give it a little bit more thought!
If they negotiated non-exclusive access for Toll, then the contract would be worth a hell of a lot less. There might or might not be competition on two or three lucrative routes, making the rest of them even less profitable. The service would be worse, and Ontrack would make even less profit. It’s a natural monopoly for a reason.
Oh the wailing and gnashing of teeth:
All trying to divert attention from the real questions:
* What would the Nats do about KiwiRail?
* What would the Nats do about ACC?
Come on, I know it’s only human to jump to the defence of your mate John (if he really is your mate) but come on the guy’s the leader of the opposition not some guy you drink with in the pub – even if he’s trying to make you believe he is.
To quote Gordon Campbell in Scoop
Whether or not he or his trust happened to have shares at one or other specific exact time is not at issue, it’s that he was using questions in parliament to craft his investment portfolio.
matthew road users more than pay cost of building roads just look at data. Funny how Tane says it is capital strike, not labour strike when 90% of commercial trucking fleet is small business. 90% of commercial trucking fleet is 1-5 trucks. This is not big business attacking labour government, it is small family business fed up with rising cost imposed by government. I have small business too and I see why the truckies are so angry and I support them. Please matthew don’t say road users aren’t paying their way, they are paying their way and they are all subsidising rail. On the same day we are told with kiwirail we will subsidise rail even more, we learn it is truckies who are having to pay the subsidy.
Hey Dilip,
Did the taxpayer subsidise the land your business is built on or did you have to pay for it out of your businesses profits?
If you cannot pay for the resources you use to create your profits then your business is unprofitable and should close – It’s the market, man.
The big miss in Gordon Campbell’s analysis is there was no gain to Key because written PQs and their answers are public.
To imply that he either intended to or would get any benefit from an answer and then acted on such is just continuing the smear and says more about Gordon and his increasing lack of credibility.
The answers to PQs are so vague and unrevealing (to even suggest the possibility that Key had an advantage is blithering stupidity or wilful ignorance.
Road users do pay for cost of roads and more, much more than actual cost of roads bill. Road users pay cost of rail subsidy as well and are paying much much more for rail now that government has committed to pay one and half billion dollar for kiwirail, on same day they announce road user charge to go up.
That is not fair and road users fed up paying for extravagant waste.
[lprent: What a strange and distorted world you live in.
The only cross subsidisation (that I'm aware of) between road and rail is (maybe) for mass transit. Ie getting people off the roads at peak hours. Someone will probably actually know rather than guessing as you are.
You're starting to look like a nasty mindless troll to me]
dilip, give me the data if you have it, because what I’ve seen is billions going into roads that have to come from somewhere. I haven’t seen figures to show that excise and RUC more than cover it (because they don’t). And spare me the emotive drivel, whether it’s one truck of 100, they still have to pay their share of road improvement and maintenance.
you know as well as I that all RUC goes into roading.
Insider,
So that’s a:
b) attack the messenger
Come on mate, smarten up! C/T is sooo last week!
Dilip, I think you’re blatantly lying. Prove that RUC is less that roading expenditure, or admit that RUC isn’t a rail subsidy.
Matthew look at tax outturn data. 1616million on road user charge and fuel excise in twelve months before road user charge raised. That is 836million in road user charge and 780million in fuel excise. All this data from treasury.
Then look at expenditure appropriation for transport. $415million expenditure on maintenance of local road and state highways.
Road users pay much more than cost of maintenance of roads and building of new roads. So where is extra money going? We know kiwirail will cost one and half billion to buy. That’s answer right there matthew.
[lprent: That's better - reduce troll rating.
BTW: did you count building new roads? Pretty expensive as I remember - quite of lot of it going on. I have to work around it every day.]
Have I got this straight?
Truckers, to show that they are paying too much to use the roads, are going to try to clog up the roads with trucks?
Sounds like a great way to promote rail to me…
Dilip – I just gave you stats. I’m not interested in what you say, because you’ve given me no reason to believe you. You mention $415 m on roads and highways.
On the link I gave you the figure is $741m for State highway improvements alone (you didn’t say which year you’re talking about), plus $470m for State highway maintenance, and $226m for local road maintenance (so $696m vs your figure of 415). Then there’s $453m for emergency works.
Give me some stats or admit you’re lying.
Here’s the same for last financial.
If you look at link you posted Matthew $2.4 billion comes from road user charge and fuel excise and registration charge. $325million of that already spent on passenger transport. Another 440million spent on transport safety, research and administration. So 765million already raised from road users, not including gst amount which is much bigger, is spent on items other than roads.
This is before road user charge increase. There is no legitimate reason for increase except to pay for kiwirail.
That’s problem with nationalising asset matthew. It’s all very nice being proud about owning new trainset until people think about who has to pay for it, and when narrow group of road users have to pay bill for trainset so it can compete with their own business they get very angry.
You’re not aware of the extra billion or so in new roading projects announced a few days ago then – no cause and effect there…? Sounds legitimate enough for me – roans aren’t free.
Road spending on passenger transport reduces congestion and makes roads usable, so you can’t deduct that from expenditure.
Transport safety – clearly for road users; research and administration – also for the same, it’s for road users and nothing else. How else should expenses incurred by road users be paid – by non-road users?
Do you expect to see every cent of excise and RUC spent on ashphalt? Then I guess you expect non-road users to subsudise crash barriers, road safety research and the administration and allocation of billions of dollars? No thanks.
That’s the problem with people getting angry without knowing the facts – we’ve got streets blocked tomorrow because people just don’t know enough. Every cent taken is spent on road users (just don’t make the mistake that it has to be spent on ‘roads), this policy will not change.
Let’s not mention your original stats…
By the way, RUC revenue is forecast to increase from $800m to $880m or so next year. That’s about a 10% increase – now – weren’t RUC going up by even less than 10%? All that funding is allocated to new roads.
KiwiRail gets some positive press in England:
http://www.guardian.co.uk/commentisfree/2008/jul/03/newzealand.transport
I love it!
I thought you might!
“not only did John Key help sell it in the first time and make a profit off the asset-stripping that followed. ”
according to what evidence?
Now to the rest of the article. We used to have a much bigger rail network once upon a time. A large amount of that network was closed under Government monopoly ownership because it could not make money. Sound familiar?
There is no difference between the situation of the Government closing down large chunks of rail in the 50s, 60s, 70s, 80s and 90s, and the present one except for that all important political factor and that is that Labour is in power at the present time and can shift the goal posts and try to persuade public that things are somehow different.
In certain areas there is very little local traffic and competition not only from road but sea as well. Christchurch to Picton is a case in point, and even more importantly, the line took more than 70 years to build. It was not until 1945 that the route was completed near Kaikoura. If you know anything about rail in this country, it is that most of the major rail routes in NZ opened much earlier. So far as that route goes, there was no compelling need to have a rail operation because most of the South Island freight went by sea and there was (and is) no significant population living north of Christchurch. It was completed by politicians who had no conception of whether it would be economic to operate. It is because of routes like that, and competitive modes, that rail loses and has always lost money in NZ.
Rail is not always more efficient than other forms of transport. Sometimes road is more efficient than rail, or vice versa.
Matthew Pilot,
Labour announced a very expensive roading plan in 2005, which coincidentally happened to be election year. This was funded by sucking $800 million of capital out of Meridian Energy.
The funding of Kiwirail purchase in part comes from another $150 million or so siphoned out of, yes, Meridian Energy again. That money has come straight out of electricity consumers’ pockets. Think about that next time you hear about a power price rise.
Just because a billion dollars in road projects have been announced does not mean it is necessary. The fact that the government has a road building monopoly means the political facts of this roading programme are well concealed.
Why are we building more roads when rail is supposed to be the great saviour of our transport network woes.
Matthew Pilott,
“I like this, everyone says Labour have a deathwish; have ‘lost it’ when they are acting responsibly and not putting their party ahead of the country, by increasing RUC as required to fund the billions of dollars of roading that truckies profit from.”
What’s wrong with them making a profit?
The government always has plenty of money to throw around when it suits them. It just doesn’t get called a profit, it is called a surplus or some other more politically acceptable name.
That is called free enterprise, that Annette King showed she had no regard for. When she was challenged about imposing the increase immediately she said that companies would bulk buy RUCs in advance and therefore have an unfair advantage and that the government would get less money.
The opposite view is that a significant number of small trucking firms could go to the wall being unable to immediately recover the increased charges from their customers.
Which is more important? The first view is that the Labour government is more important, the second view is that private sector business is more important.
It’s natural as to why the government would choose the first option, if they don’t care about private business going bust. But if the point is made that the government wouldn’t really miss a small one off loss in RUCs, then a whole different perspective applies. Then it becomes much harder for Annette KIng to claim the moral high ground, and she starts herself to look a lot more like we are supposed to believe the private sector trucking firms are motivated.
The reason we have a roading system where direct user charging is not actually applied in a transparent way is because Labour would never agree to anything that reduced their control of the roading system. National has been down the road of looking into exactly such a policy.
true true, the manner of implementation is such that it may unnecessarily send some of our roading infrastructure to the wall (the private small guys. owner-operators). especially in these tender times.
these times are tender. and there would be votes in soothing that tenderness…
SP, In your reply to Dilip you stated “Labour introduced ‘full hypothication’ a few years ago”. What Labour introduced was only de facto hypothecation. The Bill to introduce proper hypothecation was only voted on in Parliament last night and I’m not sure if the hypothecation clause was included in the version of the Bill that came back from the select committee, but there was no mention of hypothecation in Cullen’s latest budget. The problem with the de facto hypothecation is that the distribution of funds is decided by Cabinet rather than by technorats and Cabinet has decided to ignore the recommendations of the National Road Safety Committe in favour of “solving” peak period congestion in Auckland and Wellington (and targetting boy racers in Christchurch). Hence we are on target for 420+ killed by our roads this year instead of 120. All because we let politics and psuedodemocracy get in the way of good governance.
Good grief! Why all the huffing and puffing about what roading revenue gets spent on what land transport areas? Use the net, look it up! It’s all here, possibly in more detail than you want though:
http://www.landtransport.govt.nz/
Or if you are historically minded you can even try this one and see if you live in one of the four lucky regions receiving more highway investment than they got from Mr Savage’s great government.
http://www.petroltax.org.nz/statistics.html
Swampy – that’s bollocks. Give me a shred of evidence that the cost increase could put people out of business. For example, since diesel has gone up (without warning) by 80% over the last 12 months, show me the 80% of drivers out of business.
I am stoked if truckies can make a profit, so long as I don’t subsidise them myself. If you don’t have a problem wth that, can you send me a cheque? I could do with a top-up myself!
Kevn – I’ve been saying the same thing actually, it’s all there, every cent being spent on roading related interests.
Iprent “Unless they can show that they cause less damage to the roads relative to cars than they did 20 years ago? I’ll bet that they can’t.”
How much are you willing to bet? Before you answer you’d better track down the OECD’s DIVINE study policy recommendations or the technical reports.
Matthew, Sorry if I got a bit confused who was saying waht in your debate with Dilip.
IMHO it’s drawing a bit of a long bow, in light of the BART@20 studies (UCTC.net) to describe public transport as roading related.
“lprent
July 3, 2008 at 9:42 am
Natural monopolies need to be either strongly regulated or in state ownership.”
Why state ownership, is there any evidence that the state is a better owner than the private sector? I don’t believe there is.
I certainly don’t believe any of the reasons put about by the proponents of this renationalisation. Far far more railway track has been run down and ripped up by the government than Toll was ever considering.
The fact is that the NZ rail network has a few profitable bits and a few real dogs like Napier to Gisborne. And that loss making line was going to be closed down by the Railways in 1988 because it was a dog, but then a subsidy was found from the Labour government to keep it open.
But we subsidise road transport as well. That is why the Road user Charges have been put up. Mr Average NZer has subsidised trucks for years.
The logic of this truck protest is a nonsense and only understood when you realise the ex nat Friedlander is behind the beat-up.