Farrar joins call for SOE reform
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- Date published:
7:00 am, December 24th, 2010 - 95 comments
Categories: assets, business, dpf -
Tags: Kiwirail, SOEs, trade
Say you run a large company. Say the manager of a division in your company chose do a deal that improves the division’s own profitability instead of one that would have made the division less profitable but the company as a whole more profitable. You would be angry. So why are the people who run our SOEs required to act like that?
It doesn’t make sense for parts of the government called SOEs to act as if they are independent entities and ignore the impacts of their decisions on the the rest of the government. Twice this year, Kiwirail has made the choice to save small amounts of money by buying rolling-stock overseas when it could have bought them from its own workshop creating hundreds of jobs and big tax flows to its owner, the government, which would have meant more services or lower debt for less tax you for and me.
We’ve been hitting this topic for a while on The Standard and even David Farrar now sees this is madness. He re-posted a long post about it yesterday and I’m going to do it again here.
This isn’t about protectionism. This isn’t about trade barriers. This is just the government acting sensibly to get the most bang for its buck for us, its owners:
I have always found it remarkably easy not to get all het’ up about other people’s problems. However, over the past couple of years I have been doing a lot of thinking about ‘the economy’ and I have slowly come to realise that individual and group woes have a tendency to compound over time into big globs of ‘economic ugly’ that inevitably effect almost all of us working class shlubs, particularly in a country as small as NZ.
KiwiRail’s recently announced decision to outsource the purchase of 300 container wagons to Chinese manufacturing concern CNR has not just het’ me up – it’s got me positively incendiary.
This decision is bollocks – there is no other way to put it. Actually there are several better ways to put it – but hey, this is a family friendly blog…..
The Southland Daily Times reports KiwiRail’s CEO, Jim Quinn, as saying that this decision does not imperil jobs at it’s own Hillside and Hutt Valley workshops. He proceeds to reinforce this carved-in-wet-sand assurance by further stating that he cannot guarantee that there will always be enough work for them…..[unless, of course, he did something like, lets see…award them Kiwi-Rail’s own contracts].
I have had personal dealings with Hillside. Back in 2005/06 Sarah & I photographed the ‘Men & Women of Hillside’ for the Toll NZ calendar – that’s where the photo comes from. I gained a great deal of respect for the operation – and it’s workers during these photo shoots.
Hillside is not inhabited by a bunch of over-entitled, Teamster style union shirkers tossing handfuls of bolts in the general direction of a locomotive. The carpark is not chocka with $60,000 SUVs and I never spotted a lunch room filled with workers taking 2 hour seniority breaks.
They are a highly skilled, workforce building remarkable products on a scale that I have not seen previously in NZ. Quite simply, they are bloody good at building big heavy stuff and they do it all – from foundry to paint shop to high tech electrical controls – in about the most Dickensian agglomeration of buildings still standing in the Southern Hemisphere.
The bottom line is this – Hillside Engineering is about as competive and lean as a manufacturer can be in New Zealand. In 10 years time when China is no longer cheap we will need these skills again in NZ, so we had better not lose them in the interim.
The reason for Hillside’s failed bid on this project was surprise, surprise – cost. To my knowledge, CNR have not promised to deliver a 40% lighter, self-loading, web-savvy super-wagon that comes complete with it’s own facebook and twitter accounts. Nope, CNR are 25% cheaper than Hillside on this $29 million contract and that’s it. By my calculations that equates to about $7.25 million – so for expediency I’ll call it an even $7M between friends which, admittedly, seems like a lot of money – but is it in the scheme of things?
Now, I don’t fully understand the operating rationale behind SOE’s – I would naively assume that it would be to utilise and safeguard state owned assets for the betterment of the broader New Zealand economy. What I do understand is that the previous Labour Government stumped up at least $665 million to purchase what is quite possibly the least successful monopoly in commercial history. If we had three privately owned railroad competitors in NZ, I could understand that the imperative to cut costs would exist – but we don’t** and we as the taxpayer are stuck with Kiwi-Rail (at least until after the next election) whether we like it or not – I for one do like it.
So if we own a monopoly why don’t we just do what all good monopolies do best – pass the extra costs on to the end user in order to deliver a more holistic package of benefits to the NZ economy?
If we are already at least $665 million plus in the hole, what the hell is another $7m to keep New Zealanders working at a time like this? Bernard Hickey summed it up beautifully when he said that we need to be much more nationalistic about these issues – damned right we do.
Like most of the developed world, manufacturing is more expensive here because we live in a country where we expect a living wage, social safety nets and a safe working environment. Inevitably we operate under A LOT of Government penned legislation that safeguards these expectations and adds A LOT of costs in the process. If an SOE cannot afford to pay the true cost of manufacturing in NZ using it’s own workers, who else can? We might as well just shut up shop tomorrow.
Let’s face it. Hillside will never be able to beat the Chinese on price. Everything is cheaper in China – in fact Kiwi Rail might like to consider outsourcing it’s CEO role to China, I am sure they could easily exceed a 25% saving on that.
So the question has to be what do we stand to lose from this deal? Are we really saving $7 million?
I would argue that from the get-go the New Zealand loses at least 12 million dollars by sending this deal to China. (apples for apples – The Hillside deal has a $7 million ‘buy NZ’ premium and I am assuming $10m imported materials which is a capital outflow from NZ – meaning an additional $12 million leaves NZ under the CNR deal). I am a macro-economics gumby*, but as far as I can see, The CNR deal ensures that this additional $12m is off to China, and unless someone in the CNR Mansion*** is in the market for a few thousand tonne of kiwifruit or a nice package deal holiday to NZ it ain’t coming back except as part of Bill English’s weekly $300 million loan package.
Which segues rather neatly to my next point – let’s look at that $7 million in context – as we have previously established $7 million is a shed load of money to most of us (though up until last week $7 million was probably Mark Hotchin’s monthly living costs). But $7 million is a mere 2.3% of the aforementioned weekly rogering that we are already taking as a country – I can’t be bothered looking it up, but I suspect that $7 million pays for about 6 hours of dole and DPB payments at present.
Continuation of this accounting-centric purchasing at Kiwi Rail could well ensure that the dole, DPB, or worse, Australia, is where a large portion the 180 skilled workers of Hillside could soon be headed. What is the downstream cost of that? Is it worth the risk for a measly $7 million? I for one don’t think so and I would be happy to foot my portion of that bill as a taxpayer.
But do we really have to foot the bill?
I always like to chunk business problems down to the smallest denominator – it brings perspective and big problems often look a lot more resolvable.
Firstly, lets spread the $7m extra cost over the 300 carriages. That’s about $23,000 extra per carriage – significant yes, but wagons don’t curl up and die after a year – though it is entirely possible that they could be tagged to death in South Auckland within their first week of service.
I am no train spotter, but looking at Kiwi Rail’s current rolling stock it would appear that a wagon can ride the rails for at least 97 years and survive two world wars – but I’ll adopt a more economically palatable 10 year timeframe. That’s a paltry $2,300 per annum across their life span – we’ll apply some snazzy time value of money guess-timation and make that $2500 per annum to give the bean-counters a return on investment. That’s less than $7 a day – or the equivalent of a Big Mac combo a day we have to recover to keep 180 Kiwis in work.
I have no idea how rail container freight is charged out (volume, time, or weight) but trucking 2.5 cubic metres from Alexandra to Auckland return cost us $750 return last month so I am guessing a container would cost thousands for the same trip. Will Fonterra**** really balk at the equivalent of $7 or even $25 dollars a day in charges? I doubt it.
So what to do? It’s simple really – CANCEL THE CONTRACT maybe pay some penalties to keep the diplomatic corp from squirming at embassy dinners and bring the jobs home. We all know that the Chinese Government would have few qualms reciprocating if their manufacturing sector looked like ours.
Do the right thing, CANCEL THE CONTRACT.
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This is a long read. Open to all.SYNOPSIS: Traditional media is at a cross roads. There is a need for those in the media landscape, as it stands, to earn enough to stay afloat, but also come across as balanced and neutral to keep its audiences.In America, NYT’s liberal leaning ...1 week ago - Black Friday
It's Black Friday, the end of the weekYou take my hand and hold it gently up against your cheekIt's all in my head, it's all in my mindI see the darkness where you see the lightSong by Tom OdellFriday the 13th, don’t be afraid.No, really, don’t. Everything has felt a ...1 week ago - Weekly Roundup 13-September-2024
Ooh, Friday the thirteenth. Spooky! Is that why certain zombie ideas have been stalking the landscape this week, like the Mayor’s brainwave for a motorway bridge from Kauri Point to Point Chev? Read on and find out. This roundup, like all our coverage, is brought to you by the Greater ...1 week ago
- Release: Coalition cooking up costly RMA replacement
National continues to dismantle environmental protections in the interests of rushing through unsustainable development that will ultimately cost communities. ...15 hours ago - Release: National red-faced as benefit numbers skyrocket
The economy has stagnated and the National Government is having to face the consequences of its atrocious lawmaking, as beneficiary numbers skyrocket past even Treasury’s predictions. ...20 hours ago
- Release: National allocating police officers not hired yet
There are 104 fewer police officers now than there were when National came into Government. ...20 hours ago
- Economic decline further cause for tax transformation
Today’s GDP figures combined with the injustice of our tax system will mean more pain for our lowest-income households while those at the top remain relatively unscathed. ...2 days ago - Release: No growth under National, just cuts
The National Government’s decisions have hindered, not helped the economy. ...2 days ago
- Govt must act to avoid the worst of NIWA’s climate projections
New climate projections from NIWA underscore how urgently climate action is needed. ...3 days ago
- Release: More job losses as Government fails on manufacturing
The Government is failing the manufacturing sector with no plan for its future. ...3 days ago
- Tāmaki-Makaurau MP Urges Immediate Support for Families Impacted by Mill Closure
Te Pāti Māori Member of Parliament for Tāmaki Makaurau is urging a full wraparound of services to intervene quickly with families affected by today's announced closure of the Penrose Mill. Seventy-five people are set to lose their jobs right on the eve of Christmas. "I want to extend my thoughts ...3 days ago
- Release: Sentencing package misses the mark by a mile
Sentencing policy announced by Minister Paul Goldsmith today is anything but new, merely window dressing to make up for backwards violent crime statistics under the National Government. ...4 days ago
- Release: Seymour’s Ministry of Double Standards
David Seymour doesn’t stick to his own standards of good regulation despite having a multimillion-dollar vanity ministry set up to do so. ...4 days ago
- Release: Labour Leader to travel to UK
Labour Leader Chris Hipkins will travel to the United Kingdom this week to attend the annual UK Labour Party conference in Liverpool and meet with members of the new Labour Government. ...4 days ago
- Govt Warned – Increasing Snapper Quota Breaches Fisheries Settlement
An imminent decision to increase the total allowable commercial catch (TACC) for snapper would be a direct violation of the first-ever Treaty Settlement and inevitably breach Te Tiriti o Waitangi, says Te Pāti Māori. Te Ohu Kaimoana has sought a High Court declaration to prevent the Minister of Oceans and ...5 days ago
- Govt attacks workers’ rights once again
Today’s announcement from the Minister of Workplace Relations emphasises how deep in the pocket of big business this Government really is. ...5 days ago
- Release: Māori business not a priority for this Govt
Scrapping the Progressive Procurement programme designed to support and grow Māori businesses is a missed opportunity. ...6 days ago
- Release: March 15 inquiry grants cut by Government
Justice Minister Paul Goldsmith has cut grants helping overseas family of victims to attend the next phase of the Coronial Inquiry into the 15 March 2019 Christchurch Masjidain Attack. ...6 days ago
- Minister of Injustice seeks to Entrench largest land confiscation in History
The Waitangi Tribunal has released an Urgent Report on the Government’s proposed amendments to the Takutai Moana Act 2011. The report calls out Paul Goldsmith’s proposal for what it is: a “gross breach of the Treaty” and an “illegitimate exercise of kāwanatanga”. The Tribunal is recommending the Crown step down ...1 week ago
- Takutai Moana changes another assault on Te Tiriti
The Government must abandon its Marine and Coastal Area (Takutai Moana) Act interventions after the Waitangi Tribunal found it was committing gross breaches of the Treaty. ...1 week ago
- Greens call on Govt to leave Te Reo in schools alone
As Te Wiki o te Reo Māori approaches, the Government is considering deprioritising teaching Te Reo Māori in our schools. ...1 week ago
- Govt cannot ignore racism
The Government’s directive to the public service to ignore race is nothing more than a dog whistle and distraction from the structural racism we need to address. ...1 week ago
- Release: Lemauga Lydia Sosene to take medical leave
Labour’s Mangere MP Lemauga Lydia Sosene has been diagnosed with breast cancer and will shortly take medical leave. ...1 week ago
- Potential intelligence sharing with Israel must be investigated
Concerns have been raised that our spy arrangements may mean that intelligence is being shared between Aotearoa and Israel. An urgent inquiry must be launched in response to this. ...1 week ago
- Release: Charter schools undermine our education system
The Government is taking a wrecking ball to our public education system by reinstating charter schools. ...1 week ago
- Youngest MP to travel to Canada to accept Politician of the Year Award
Aotearoa’s Youngest Member of Parliament, and Te Pāti Māori MP, Hana-Rawhiti Maipi-Clarke, will travel to Montreal to accept the One Young World Politician of the Year Award next week. The One Young World Politician of the Year Award was created in 2018 to recognise the most promising young politicians between ...1 week ago
- Greens celebrate huge step forward for ADHD community
The Greens welcome today’s long-coming announcement by Pharmac of consultation to remove the special authority renewal criteria for methylphenidate, dexamfetamine and modafinil and to fund lisdexamfetamine. ...1 week ago
- Release: Millions to be spent dividing NZ for no reason
The National Party is wasting millions of dollars allowing David Seymour’s Treaty Principals Bill to be drafted and go to Select Committee. ...1 week ago
- Release: New Zealanders departing our shores at a record rate
The Migration figures released by Stats NZ today show National is continuing to drive Kiwis away from New Zealand in record numbers. ...1 week ago
- Te Tai Tokerau MP Slams Govt Overreach in Scrapping Māori Wards
Mema Paremata for Te Tai Tokerau, Mariameno Kapa-Kingi, has reflected on the decisions made by the councils of the North amidst the government’s push to remove Māori Wards and weaken mana whenua representation. “Actions taken by the Kaipara District Council to remove Māori Wards are the embodiment of the eradication ...1 week ago
- Govt already seeking advice on Treaty referendum
On one hand, the Prime Minister has assured Aotearoa that his party will not support the Treaty Principles Bill beyond first reading, but on the other, his Government has already sought advice on holding a referendum on our founding document. ...1 week ago
- Release: Aged care will be worse off if redesign rushed
New Zealanders needing aged care support and the people who care for them will be worse off if the Government pushes through a flawed and rushed redesign of dementia and aged care. ...1 week ago
- Release: Govt fails hundreds of workers as mills close
Labour is devastated at news hundreds of workers are set to lose their jobs following the closure of Winstone Pulp mills. ...1 week ago
- Job losses from mill closures consequence of Govt inaction
Hundreds of jobs lost as a result of pulp mill closures in the Ruapehu District are a consequence of government inaction in addressing the shortfalls of our electricity network. ...1 week ago
- Ngarewa-Packer devastated for Ruapehu following WPI closure
Te Pāti Māori Co-Leader and MP for Te Tai Hauāuru is devastated for the Ruapehu community following today’s decision to close two Winstone Pulp mills. “My heart goes out to all the workers, their whānau, and the wider Ruapehu community affected by the closure of Winstone Pulp International,” said Ngarewa-Packer. ...2 weeks ago
- Release: Cabinet should stop the Treaty Principles Bill
National Party Ministers have a majority in Cabinet and can stop David Seymour’s Treaty Principles Bill, which even the Prime Minister has described as “divisive and unhelpful.” ...2 weeks ago
- Release: Staff gagged to keep fast track list secret
The National Government is so determined to hide the list of potential projects that will avoid environmental scrutiny it has gagged Ministry for the Environment staff from talking about it. ...2 weeks ago
- Release: Labour challenges Te Whatu Ora gag orders
Labour has complained to the Te Kawa Mataaho Public Service Commission about the high number of non-disclosure agreements that have effectively gagged staff at Te Whatu Ora Health NZ from talking about anything relating to their work. ...2 weeks ago
- Greens call on Treaty Principles Bill to be abandoned after letter from Christian leaders
The Green Party is once again urging the Prime Minister to abandon the Treaty Principles Bill as a letter from more than 400 Christian leaders calls for the proposed legislation to be dropped. ...2 weeks ago
- Sign the petition: Keep military-style firearms off our streets
Help us tell the Government that reintroducing military-style firearms should not be up for debate. ...2 weeks ago
- Vast majority of councils support Māori wards
Councils across the country have now decided where they stand regarding Māori wards, with a resounding majority in favour of keeping them in what is a significant setback for the Government. ...2 weeks ago
- Release: Government on the wrong side of Māori wards
The National-led government has been given a clear message from the local government sector, as almost all councils reject the Government’s bid to treat Māori wards different to other wards. ...2 weeks ago
- Release: Labour congratulates Kuīni Ngā Wai hono i te po Paki
The Labour Party congratulates Kuīni Ngā Wai hono i te po Paki on being crowned as the eighth Te Ariki Nui – head of Te Kiingitanga. ...2 weeks ago
- Tourism on the table for Pacific Ministers’ meet-up
Tourism and Hospitality Minister Matt Doocey will meet with Trade and Tourism Minister of Australia Don Farrell and Fiji Deputy Prime Minister Manoa Kamikamica in Rotorua this weekend for a trilateral tourism discussion. “Like in New Zealand, tourism plays a significant role in Australia and Fiji’s economy, contributing massively to ...13 hours ago - Young people report on family and sexual violence
The Te Puna Aonui Expert Advisory Group for Children and Young People has presented its report today on improving family and sexual violence outcomes for young people, to the Minister for the Prevention of Family and Sexual Violence, Karen Chhour. The presentation at the Auckland event was an opportunity for ...13 hours ago
- $18 million being invested in the victims of crime
The Government is putting more than $18 million towards improving the experience of the criminal justice system for victims, Justice Minister Paul Goldsmith and Minister for Children Karen Chhour say. “No one should experience crime, but for those who through no fault of their own become victims, they need to ...14 hours ago
- Landmark phonics check in te reo Māori
For the first time, schools can use a purpose-built tool to check how a child is progressing in reading through te reo Māori. “Around 45 schools are trialling a New Zealand first te reo Māori phonics check, known as Hihira Weteoro. It will help kaiako (teachers) focus on what ākonga ...15 hours ago
- New sea walls safeguard Ōpōtiki’s transformation
Two new breakwater walls at Pākihikura (Ōpōtiki) Harbour will provide boats with safe harbour access to support the continued growth of aquaculture in Bay of Plenty, Deputy Prime Minister Winston Peters and Regional Development Minister Shane Jones say. The Ministers and leaders from Tē Tāwharau o Te Whakatōhea and other ...17 hours ago
- Kitmap to improve access to science infrastructure
Science, Innovation and Technology Minister Judith Collins today announced an online platform to optimise the use of New Zealand’s science and technology research infrastructure and to link the public and private sector. “This country is home to world-class science, technology, and engineering expertise. Kitmap is set to empower Kiwi innovators, ...17 hours ago
- Driving the uptake of low emission heavy vehicles
The Government has launched the Low Emissions Heavy Vehicle Fund (LEHVF) to promote innovation and offset the cost of hundreds of heavy vehicles powered by clean technologies, Energy Minister Simeon Brown and Climate Change Minister Simon Watts say. “Boosting economic growth and productivity is a key part of the Government’s plan ...17 hours ago
- Speech on replacing the Resource Management Act
Replacing the RMA Hon Chris Bishop: Good morning, it is great to be with you. Can I first acknowledge the Resource Management Law Association for hosting us here today. Can I also acknowledge my Parliamentary Under-Secretary, Simon Court, who is on stage with me. He has assisted me in establishing the ...17 hours ago
- Replacement for the Resource Management Act takes shape
Two new laws will be developed to replace the Resource Management Act (RMA), with the enjoyment of property rights as their guiding principle, RMA Reform Minister Chris Bishop and Parliamentary Under-Secretary Simon Court say. “The RMA was passed with good intentions in 1991 but has proved a failure in practice. ...19 hours ago
- Tough laws pass to make gang life uncomfortable
Legislation passed through Parliament today will provide police and the courts with additional tools to crack down on gangs that peddle misery and intimidation throughout New Zealand, Justice Minister Paul Goldsmith says. “From November 21, gang insignia will be banned in all public places, courts will be able to issue non-consorting orders, and ...2 days ago
- New levy rates set to ensure continued funding of FENZ
Minister of Internal Affairs Brooke van Velden says the Government has agreed to the rates for the redesigned levy that will fund Fire and Emergency New Zealand (FENZ) from July 2026. “Earlier this year FENZ consulted publicly on a 5.2 percent increase to the levy. I was not convinced that ...2 days ago
- Police allocate Officers to Beat and Gang Units
The Coalition Government welcomes Police’s announcement today to deploy more police on the beat and staff to Gang Disruption Units. An additional 70 officers will be allocated to Community Beat Teams across towns and regional centres. This builds on the deployment of beat officers in Auckland, Wellington and Christchurch CBDs ...2 days ago
- Consultation begins on significant updates to the biosecurity system
Proposals to strengthen the country’s vital biosecurity system, including higher fines for passengers bringing in undeclared high-risk goods, greater flexibility around importing requirements, and fairer cost sharing for biosecurity responses have been released today for public consultation. Biosecurity Minister Andrew Hoggard says “The future is about resilience and the 30-year-old ...2 days ago
- Wānaka community to benefit from new overnight health service
Health Minister Dr Shane Reti says an Overnight Acute Care Service opening in October will provide people in Wānaka and the surrounding area with the assurance of quality overnight care closer to home. “When I was in Wānaka earlier this year, I announced funding for an overnight health service – ...2 days ago
- Preventing potholes with data-driven technology
The Government is rolling out data collection vans across the country to better understand the condition of our road network to prevent potholes from forming in the first place, Transport Minister Simeon Brown says. “Increasing productivity to help rebuild our economy is a key priority for the Government and increasing ...2 days ago
- GDP data shows effect of high interest rates
Gross Domestic Product (GDP) data for the quarter to June 2024 reinforces how an extended period of high interest rates has meant tough times for families, businesses, and communities, but recent indications show the economy is starting to bounce back, Finance Minister Nicola Willis says. Stats NZ data released today ...2 days ago
- NZ to host first Fiji, Australia trilateral trade Ministers’ meeting in Rotorua
Trade Minister Todd McClay will host Fijian Deputy Prime Minister Manoa Kamikamica and Australian Trade Minister Don Farrell for trilateral trade talks in Rotorua this weekend. “Fiji is one of the largest economies in the Pacific and is a respected partner for Australia and New Zealand,” Mr McClay says. Australia and New Zealand ...2 days ago
- NZ hosts Annual CER Trade Ministers’ meeting in Rotorua
Trade Minister Todd McClay will meet with Australian Trade Minister Don Farrell for the annual Closer Economic Relations (CER) Trade Ministers’ meeting in Rotorua this weekend. “CER is our most comprehensive agreement covering trade, labour mobility, harmonisation of standards and political cooperation. It underpins an important trading relationship worth $32 ...2 days ago
- Government proposing changes to jury trials
The Government is seeking the public’s feedback on two major changes to jury trials in order to improve court timeliness, Justice Minister Paul Goldsmith says. “The first proposal would increase the offence threshold at which a defendant can decide to have their case heard by a jury. “The second is ...2 days ago
- Business key to regional economic dialogue
Local businesses and industries need to be front and centre in conversations about how regions plan to grow their economies, Regional Development Shane Jones says. The nationwide series of summits aims to facilitate conversations about regional economic growth and opportunities to drive productivity, prosperity and resilience through the Coalition Government’s Regional ...2 days ago
- More funding for Growing Up in New Zealand study
The Government is investing $16.8 million over the next four years to extend the Growing Up in New Zealand (GUiNZ) Longitudinal Study. GUiNZ is New Zealand’s largest longitudinal study of child health and wellbeing and has followed the lives of more than 6000 children born in 2009 and 2010, and ...2 days ago
- Tough targets for charter schools will raise achievement
Associate Education Minister David Seymour says that Charter Schools will face a combination of minimum performance thresholds and stretch targets for achievement, attendance and financial sustainability. “Charter schools will be given greater freedom to respond to diverse student needs in innovative ways, but they will be held to a much ...2 days ago
- NZ votes for Middle East resolution at UN
New Zealand has voted for a United Nations resolution on Israel’s presence in occupied Palestinian Territory with some caveats, Foreign Minister Winston Peters says. “New Zealand’s yes vote is fundamentally a signal of our strong support for international law and the need for a two-state solution,” Mr Peters says. “The Israel-Palestine ...2 days ago
- Honouring the legacy of New Zealand’s suffragists
Suffrage Day is an opportunity to reaffirm New Zealand’s commitment to ensuring we continue to be a world leader in gender equality, Minister for Women Nicola Grigg says. “On 19 September, 131 years ago, New Zealand became the first nation in the world where women gained the right to vote. ...2 days ago
- Foreign Minister to travel to New York, French Polynesia
Foreign Minister Winston Peters is travelling to New York next week to attend the 79th session of the United Nations General Assembly, followed by a visit to French Polynesia. “In the context of the myriad regional and global crises, our engagements in New York will demonstrate New Zealand’s strong support for ...3 days ago
- Thanking social workers on their national day
“Today, on Aotearoa New Zealand Social Workers’ Day, I would like to recognise the tremendous effort social workers make not just today, but every day,” Children’s Minister and Minister for the Prevention of Family and Sexual Violence Karen Chhour says. “I thank all those working on the front line for ...3 days ago
- Minister of State for Trade heads to Laos for ASEAN meetings
Minister of State for Trade Nicola Grigg will travel to Laos this week to attend the Association of Southeast Asian Nations (ASEAN) Economic Ministers’ Meetings in Vientiane. “The Government is committed to strengthening our relationship with ASEAN,” Ms Grigg says. “With next year marking 50 years since New Zealand became ...3 days ago
- Members appointed to retail crime MAG
The Government has appointed four members to the Ministerial Advisory Group for victims of retail crime, Justice Minister Paul Goldsmith and Associate Justice Minister Nicole McKee say. “I am delighted to appoint Michael Hill’s national retail manager Michael Bell to the group, as well as Waikato community advocate and business ...3 days ago
- Speech to the New Zealand Nurses Organisation AGM and Conference 2024
It’s my pleasure to be here to join the opening of the NZNO AGM and Conference for 2024. First, I’d like to thank NZNO Kaiwhakahaere Kerri Nuku, NZNO President, Anne Daniels, and Chief Execuitve Paul Gaulter for inviting me to speak today. Thank you also to all the NZNO members ...3 days ago
- Improvements for New Zealand authors
Minister of Internal Affairs Brooke van Velden says changes to the Public Lending Right [PLR] scheme will help benefit both the National Library and authors who have books available in New Zealand libraries. “I am amending the regulations so that eligible authors will no longer have to reapply every year ...4 days ago
- Minister commends Police for gang operation
Police Minister Mark Mitchell congratulates Police for the outstanding result of their most recent operation, targeting the Comancheros. “That Police have been able to round up the majority of the Comancheros leadership, and many of their patched members and prospects, shows not only the capability of Police, but also shows ...4 days ago
- New appointments to the EPA board
Environment Minister Penny Simmonds has announced a major refresh of the Environmental Protection Authority (EPA) board with four new appointments and one reappointment. The new board members are Barry O’Neil, Jennifer Scoular, Alison Stewart and Nancy Tuaine, who have been appointed for a three-year term ending in August 2027. “I would ...4 days ago
- Enabling rural recovery works in Hawke’s Bay
Cabinet has approved an Order in Council to enable severe weather recovery works to continue in the Hawke’s Bay, Environment Minister Penny Simmonds and Minister for Emergency Management and Recovery Mark Mitchell say. “Cyclone Gabrielle and the other severe weather events in early 2023 caused significant loss and damage to ...4 days ago
- FamilyBoost childcare payment registrations open
From today, low-to-middle-income families with young children can register for the new FamilyBoost payment, to help them meet early childhood education (ECE) costs. The scheme was introduced as part of the Government’s tax relief plan to help Kiwis who are doing it tough. “FamilyBoost is one of the ways we ...4 days ago
- Prioritising victims with tougher sentences
The Government has today agreed to introduce sentencing reforms to Parliament this week that will ensure criminals face real consequences for crime and victims are prioritised, Justice Minister Paul Goldsmith says. "In recent years, there has been a concerning trend where the courts have imposed fewer and shorter prison sentences ...4 days ago
- Targets data confirms rise in violent crime
The first quarterly report on progress against the nine public service targets show promising results in some areas and the scale of the challenge in others, Prime Minister Christopher Luxon says. “Our Government reinstated targets to focus our public sector on driving better results for New Zealanders in health, education, ...5 days ago
- Asia Foundation Board appointments announced
Foreign Minister Winston Peters has announced the appointments of Hone McGregor, Professor David Capie, and John Boswell to the Board of the Asia New Zealand Foundation. Bede Corry, Secretary of Foreign Affairs and Trade, has also been appointed as an ex-officio member. The new trustees join Dame Fran Wilde (Chair), ...5 days ago
- Endeavour Fund projects for economic growth
New Zealand’s largest contestable science fund is investing in 72 new projects to address challenges, develop new technology and support communities, Science, Innovation and Technology Minister Judith Collins says. “This Endeavour Fund round being funded is focused on economic growth and commercial outputs,” Ms Collins says. “It involves funding of more ...5 days ago
- Social Services Providers Whakamanawa National Conference 16 September 2024
Thank you for the introduction and the invitation to speak to you here today. I am honoured to be here in my capacity as Minister for the Prevention of Family and Sexual Violence, and Minister for Children. Thank you for creating a space where we can all listen and learn, ...5 days ago
- Parihaka infrastructure upgrades funded
The Government will provide a $5.8 million grant to improve water infrastructure at Parihaka in Taranaki, Regional Development Minister Shane Jones and Māori Development Minister Tama Potaka say. “This grant from the Regional Infrastructure Fund will have a multitude of benefits for this hugely significant cultural site, including keeping local ...5 days ago
- Gentrification isn’t inevitable − it can hinge on how residents view their neighborhood
Source: The Conversation (Au and NZ) – By Elizabeth Korver-Glenn, Assistant Professor of Sociology, University of North Carolina at Chapel Hill Families on bikes at a July Fourth parade in Houston’s Northside neighborhood. Jimmy Castillo, CC BY-ND Gentrification has become a familiar story in cities across the United States. The ...4 hours ago - Discrimination faced by indigenous Papuans ‘isn’t something new’, says disturbing new rights r...
By Caleb Fotheringham, RNZ Pacific journalist Racism, torture and arbitrary arrests are some examples of discrimination indigenous Papuans have dealt with over the last 60 years from Indonesia, according to a new report by Human Rights Watch. The report, If It’s Not Racism, What Is It? Discrimination and other abuses ...7 hours ago
- Wā Pātai: Māori language week at Parliament
The House - Parliament was buzzing with te reo this week - but how common is this, really? ...7 hours ago - Otago land and water plan to continue, despite government’s ‘strong preference’ it...
Regional councillors have voted to continue work on the plan, despite ministers suggesting they hold off until the government confirms its policy direction. ...8 hours ago
- Many people in the Pacific lack access to adequate toilets – and climate change makes things worse
Source: The Conversation (Au and NZ) – By Benny Zuse Rousso, Research Fellow, International Water Centre, Griffith University Pvince73/Shutterstock The Pacific Islands may evoke images of sprawling coastlines and picturesque scenery. But while this part of the world might look like paradise, many local residents are grappling with a ...10 hours ago
- New Law To Ban Gang Patches A Dangerous Move For New Zealand
Censorship can be a natural impulse to things we don’t like, but it’s better to know when hateful or offensive ideas exist. Otherwise, they’re buried underground to fester and can crop up unexpectedly. We see this legislation no differently. ...10 hours ago - Government urged to intervene in Cook Strait ferry woes
There are fears lives could be lost if the government doesn't step in to bring the country's ailing Cook Strait ferry services up to scratch. ...10 hours ago
- Is life getting better for China’s tech billionaires?
Source: The Conversation (Au and NZ) – By Wenting He, PhD candidate of International Relations, Australian National University The skyline in Shenzhen, the city that is home to many of China’s largest tech companies. asharkyu/Shutterstock According to the latest Bloomberg Billionaires Index, Pony Ma, co-founder of Tencent Holdings, is once ...11 hours ago
- Fiji 2000 coup leader George Speight granted presidential pardon
RNZ Pacific The man behind the 2000 coup in Fiji, George Speight, and the head of the mutineers, former soldier Shane Stevens, have been granted presidential pardons. In a statement yesterday, the Fiji Correction Service said the pair were among seven prisoners who has been granted pardons by the President, ...12 hours ago
- Supreme Court orders government to pay in advance for Māori coastline appeal
In a rare decision, the country's top court has told the Crown it must give advance financial support to a group of hapū challenging it. ...12 hours ago
- Darleen Tana fails High Court bid against Green Party investigation
Green co-leader Chloe Swarbrick says the party welcomes the ruling and will now consider its next steps. ...12 hours ago
- Resource Management Act to be replaced by two new laws
They'll ditch rules that "invite every Tom, Dick, and Harry to vexatiously object to peaceful use and development", the government says. ...13 hours ago
- Are sports stars who are caught using illegal drugs unfairly vilified?
Source: The Conversation (Au and NZ) – By Jack Wilson, Postdoctoral Research Fellow at the Matilda Centre for Research in Mental Health and Substance Use, University of Sydney JFontan/Shutterstock With the Paris Olympics and Paralympics wrapped up, and leading Australian sports codes coming to an end of their 2024 ...13 hours ago
- Flood gates could reopen for Māori claimants after landmark ruling
The Courts have ruled the Crown must cover the costs of customary marine title claims, but where will the money come from? A landmark Supreme Court ruling could once again ensure Māori have adequate resourcing to pursue customary marine title claims, despite the government’s recent drastic raising of the threshold ...13 hours ago - RNZ’s online surge could start to worry private media
Public broadcaster RNZ might be struggling to stem its falls in radio listenership, but the audience for its website rnz.co.nz is soaring.In the latest Nielsen online audience figures for August, RNZ hit 1.56 million unique readers for the month, up from under a million a year ago and less than ...13 hours ago - Referendum on four-year political terms may come by next election – Luxon
Prime Minister Christopher Luxon says he may bring four-year political terms to a national vote at the next election. ...14 hours ago
- Afghan women have been robbed of health care, education and now their voices. But they won’t remai...
Source: The Conversation (Au and NZ) – By Susan Hutchinson, PhD Candidate, International Relations, Australian National University Last month, the Taliban passed a new “vice and virtue” law, making it illegal for women to speak in public. Under the law, women can also be punished if they are heard singing ...14 hours ago
- What is ‘dynamic pricing’ for concert tickets? It can cost you hundreds of dollars while you que...
Source: The Conversation (Au and NZ) – By Ben Green, Research Fellow, Centre for Social and Cultural Research, Griffith University When tickets for Green Day’s 2025 Australian tour went on sale, fans joined a queue – a ritual that has been practised for decades on footpaths, on phones, and now ...14 hours ago
- Week in Politics: ‘Crime wave’ puts government’s target in doubt
Analysis - Crime throws the government's reduction target into doubt and Labour's Chris Hipkins has to deal with a bad poll. ...14 hours ago
- India is in the midst of an electric vehicle revolution – and Australia should tap in
Source: The Conversation (Au and NZ) – By David T. Hill, Emeritus Professor of Southeast Asian Studies, Indo-Pacific Research Centre, Murdoch University David T. Hill You don’t have to be in India long to appreciate just how dramatic its electric vehicle revolution is. Whether it’s electric two-wheelers or trucks, ...15 hours ago
- Supreme Court orders Govt to pay in advance for Māori coastline appeal
In a rare decision, heavy with judicial and political implications, the country’s top court has told the Crown it must give advance financial support to a group of hapū challenging it over the Marine and Coastal Areas Act.The Supreme Court’s intervention, ahead of seven appeals scheduled before it in November ...15 hours ago
- The Friday Poem: ‘???’ by Freya Daly Sadgrove
A new poem by Freya Daly Sadgrove. ??? where you wake is black and very far back behind your eyes back past your whipping branches and backer far backer than bone and blood ...15 hours ago
- The Unity Books bestseller chart for the week ending September 20
The only published and available best-selling indie book chart in New Zealand is the top 10 sales list recorded every week at Unity Books’ stores in High St, Auckland, and Willis St, Wellington. AUCKLAND 1 Greene Lyon by Alan Goodwin (Quentin Wilson Publishing, $38) An intriguing new local release. Here’s ...15 hours ago
- Why is pain so exhausting?
Source: The Conversation (Au and NZ) – By Michael Henry, Physiotherapist and PhD candidate, Body in Mind Research Group, University of South Australia simona pilolla 2/Shutterstock One of the most common feelings associated with persisting pain is fatigue and this fatigue can become overwhelming. People with chronic pain can ...16 hours ago
- OpenAI’s data hunger raises privacy concerns
Source: The Conversation (Au and NZ) – By Uri Gal, Professor in Business Information Systems, University of Sydney Last month, OpenAI came out against a yet-to-be enacted Californian law that aims to set basic safety standards for developers of large artificial intelligence (AI) models. This was a change of posture ...16 hours ago
- Ads from Hell: how a pizza brand’s marketing reveals NZ’s shifting religious attitudes
Source: The Conversation (Au and NZ) – By Dan Fastnedge, Lecturer in Advertising and Brand Creativity, Auckland University of Technology Getty Images Controversial advertising holds a mirror up to society. It can unite us in laughter or outrage, spark debates that shape our beliefs – and sometimes expose our ...17 hours ago
- Breaking update: More NZX CEOs are called Mark than are bogans
There are more Marks than women leading NZX companies, RNZ reported this morning. The Spinoff can now reveal that there are way more Marks than bogans. It’s not exactly breaking news that women are underrepresented in business leadership, but RNZ found a funny and inventive way of demonstrating that this ...17 hours ago
- From cauldrons to cardigans – the lurking prejudices behind the name ‘Granny’
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“even David Farrar now sees this is madness.”
Wow David Farrar! Impressive benchmark. That guy tells it how it is. Hope to hear more from this ‘David Farrar’ guy.
He tells it how you think it is.
A not so subtle difference. But at least we can find common ground.
http://www.berl.co.nz/1166a1.page
The Berl Report on the making of trains in NZ compared with anywhere else estimated that, once the wider economic benefits were taken into account, the foreign built trains would have to have a 66% discount on the NZ$ price. 25% cheaper doesn’t cut it.
NACT: Being real bloody stupid with our economy and, by extension, our society.
(Copied my comment from last nights OpenMike across)
Dont think much of the lobbysits have a clue, this guy is talking rubbish suggesting Kiwirail is a monoply. They compete against road transport which has all thecards in its favour so saying they can jhust load the extra costs onto their freight charges is bulldust.
Tell you what, we’ll just put all the costs that truckers cause to the roads on to RUCs and things should be about right. In fact, I think you’ll find that there won’t be that much competition from the truckies after that.
Sure then there won’t be any economy left how does the stuff get from the Manufacturers plant to the ship or train or wharever LOL
That’s a bit simplistic, swampy.
The way the RUC and petrol tax is operated at present results in a subsidy from smaller vehicle operators (cars, motorbikes and very light trucks – under 4.5t) to heavy vehicle operators (vehicles that require a class 2, 3, 4 or 5 licence to drive). Rail and sea modes don’t receive this subsidy.
From what I recall of previous comments, Draco is merely suggesting trucking companies pay their fair share, and forego the subsidy. You might call it competing on a level playing field.
So it’s not a call for a large increase in costs, just a call for the costs to be redistributed and paid by the people that actually incur them. Sound fair to you?
Sorry you have it the wrong way around
The MOTs latest RUC study concluded most cathegories of truck are overcharged RUC’s except the 5 tonners.
http://www.transport.govt.nz/news/newsevents/Documents/RUC-Final-Report.pdf
in other words
light trucks get subsidised by heavy trucks RUCS
what you claim is the opposite & not supported by the facts
WHERE in the report does it say that, thanks.
Just so we don’t have to wade through all 135 pages worth to find the passage you are referring to.
And after having said that they recommend this:
what you claim is the opposite & not supported by the facts
What a load of crap you write.
The report you use to support your claims is flawed.
1. The title states that the report is an “independent review”. Yet:
None of the authors is a roading or rail engineer, thus none of the authors has significant practical experience in the engineering of roads or railways.
One of the authors is a shareholder in and director of a company with a significant interest in the RUC system, and has a vested interested in increasing the use of that system. This is best achieved by getting more trucks on the road.
Appendix 4 of the report is an advertisement for this company.
2. The report refers repeatedly to a Cost Allocation Model (CAM). The CAM is not appended to the report and is not available through http://www.transport.govt.nz so it can not be reviewed.
However, the report identifies that the fourth power relationship and weight distribution assumptions should continue to be used, for now. It recommends two openly pro-truck actions. A review of the power factor, to reduce the proportion of the wear that can be assigned to heavy vehicles, and a review of the average loading factor from 55% to 45%.
Most critically, it does not mention anything about the design standard requirements that are imposed by heavy vehicles. To accomodate heavy vehicles, roads not only need to built with thicker pavements and more complex seals, but they also must be built wider (more materials) and flatter (more earthworks). It goes without saying that bigger, thicker pavements and more complex seals have higher maintenance costs. IMO all the costs imposed by heavy vehicles should be borne by their operators. I want to know whether this was considered and, assuming it was, why it is not discussed.
The MOTs latest RUC study concluded most cathegories of truck are overcharged RUC’s except the 5 tonner
No, it doesn’t. It concludes that “Option A” in the study would result in a reduction in RUCs for everything except 5t trucks. Coincidentally Option A also requires the technological solution offer by the aforementioned company with which one of the report’s author’s has an interest. And none of the other Options require it. Even more coincidentally, Option A is the recommended option. Who would have guessed??
The basis of comparison is unfair too. While it looks at all types of vehicle, it assumes they all average 15,000km per year. This is reasonable for privately-owned cars, but most heavy vehicles do many times this distance. I’m surprised no one picked this up during the pre-release review.
On a kind of related subject, I’m still extremely angry that National retrospectively confiscated my RUCs, forced me to buy new ones at a higher cost and charged me extra GST on them. Bunch of fucking thieves.
Already the case so nothing new there, no change.
Err, no – according to the figures Jeremy Harris shared here some time ago, private car users are subsidising the trucking industry in a big way when the costs of damage to the roading system are taken into account.
That is strrongly disputed and has been a very controversial subject for many years.
The latest review commissioned by the Labour goverm,emt
http://www.transport.govt.nz/news/newsevents/Documents/RUC-Final-Report.pdf
Has concluded that RUCs be reduced for most categories of truck except 5 tonner.
Great article! CANCEL THE CONTRACT! Support New Zealand and New Zealanders! It’s as simple as that!
and so sensible. you know – not tariffs or artificial things like that just ‘if you’re part of the government, consider the impacts of your actions on the whole government’
I’ve been saying that for years, long before we had SOE and the like. But people live in their little boxes of thought and either are incapable or don’t see the need to take a holistic approach to what they do. It happens under both left and right wing governments … it is the closed box mentality … all so sad.
Great first para Eddie .. sums it up well.
No its not that simple.
The locomotive contract would have been 70% dearer and starting from scratch a massive disadvanagte against existing factories already in operation.
Now these argumenets are not neew. they were being had decades back even the 1970s when there were much more rail workshops than are now. yet all the major locmotives now running were built over seas.
I keep getting a whiff from these CNR contracts. They make no economic sense and everyone involved knows this.
So why are they happening?
Follow the money is usually good advice when something is happening that really shouldn’t be. In cases like this it’ll be “hidden” money – the information that we’re prevented from seeing due to commercial sensitivity and the information that we actually need to know. It is, after all, our money and our society that National and the Kiwirail CEO are selling out.
Oh so youre implying some sort of kickback or hidden political comeback for the Nats
But if the boot is on the other foot Labours key affiliate union adding to their millons of assets with more union fees from increased membership etc
Its quite wrong to be advocating Kiwirail should get some favours from the goverment as owner when it competes in the market place against road transport operators which are privately owned
Sammy Wong was over there apparently, making these deals for Kiwirail…
I agree RedLogix, something is wong here. Very, very wong.
Actually if you include the ‘total lifecycle costs’ these ‘cheap’ wagons and DL locos from CNR will turn out to be very expensive indeed.
A friend of mine is a very experienced engineer at Woburn; listening to him give all the exact technical reasons why these Chinese imports are a bad idea makes my ears bleed. The initial purchase price is only a small fraction of the costs involved… the real price is maintenance and repairs. Building them here in the first place achieves three main things:
1. It creates the skilled work-force, who know the equipment intimately …because they built it.
2. It ensures that you get the right design, with all the components specified exactly as you want.
3. It engages the wider commercial community as suppliers and sub-contractors… and energises the manufacturing customer base who will respond to seeing new efficient, kiwi-made rolling stock.
Yep, the wider economic benefits far outweighed the small savings achieved from importing.
The fact is they will be maintained in NZ so workshops will be in work for years to come
There is no sane reason why they would be better if they have been put together here out of the components made in China.
when you talk about 1 2 3 there is no gurantee any of these things and there is no existing locomotive manufacturing industry in NZ so Kiwirail would also be paying the costs of building this industry up from scratch then it woild be winding down again at the end of the contracts so all the skilled people would have to leave again because Theres no way any other business would be found
And saying that NZ has never found a reason to have such industry before Not even in the glory dayes of the NZR Railways Dept has anyone ever seriously got any credenace given to making main line locos in NZ only shunting engines
Building diesel locos is more of an assembly process than making it all from scratch. The engines, the alternators, traction motors, the control systems and electrics are all sourced from various global suppliers. This is true regardless of whether they are made by CNR or Hillside.
The frame, bogies and most of the rest (excluding the actual wheel castings which come from Aussie) could be readily made here in NZ by the existing skilled workforce. Building them in a short time-frame would put some pressure on them, but nothing that could not be resolved by bringing in some short-term sub-contractors to deal with specific tasks. There are plenty of kiwi engineering firms out there gagging for such work right now.
This is not idle speculation, it is informed comment direct from one of Kiwirail’s own production managers.
May be so but its much more expensive as Kiwirail points out, they have not got cash to spare, wagon buildings on a different level .
Good God. First Hickey, now Farrar inching their way towards sanity. Take some credit all you Standardistas, for your sound and dogged reasoning over the last 3 years, and keep it up you good things.
It won’t happen – John Key is ambitious for……? John Key? …. Hawaii? …. China?
Wouldn’t the free trade deal with China be the main reason behind the CNR contracts?
We buy their trains, they buy our dairy products?
um… no.
as we didn’t have any tariffs on trains before, the FTA changes nothing.
And an FTA doesn’t compell us to buy trains, or anything else, from them
Farrar is such a fucking troll he even trolls his own forum. As usual he appends it with a nudge & a wink, this time about the evils of trade “barriers” and as usual all the commenters take the bait and pretend that the post was about banning SOEs from dealing with overseas companies.
Yeah, saw that but the post itself was a good one. It wasn’t actually written by DPF but some relation.
His sister-in-law’s brother-in-law 🙂 and I thought some of my explanations were involved 🙂
Yes the liwiblog thread comments do really miss the point but what can you expect from RWNJs
It would appear that KiwiRail under its new NACT appointed board have been doing a number of slightly whiffy things with CNR. Aside from this particular tender, CNR was recently added to an existing short list for the $500million contract for the new Auckland EMUs, causing the withdrawal of the original 4 shortlisted companies and yet another ministerially-caused delay to the introduction of electric trains to Auckland. Then there are all sort of unexplained bits to this jigsaw puzzle, such as the activities of Pacific Power Development (NZ) Ltd who apparently acted on behalf of CNR on the container wagon contract; they have a partial English language website and a contact address via a Pakuranga post office box but no listed personnel. And then there are the recent revelations concerning the ubiquitous Sammy Wong who was involved with Toll some years back and, more recently, made an as yet unexplained trip to Dalian (where CNR have a major subsidiary) on the taxpayer dollar.
And what is Shipley’s involvement??????
Here’s what you have missed: There are two ways we can make trains. We can manafacture them in Dunedin, or we can farm them on the Cantabury plains 😉
Sounds crazy? It’s not. Read this:
http://faculty.tamu-commerce.edu/dfunderburk/428/readings/The%20Iowa%20Car%20Crop.htm
The obvious dumbass fallacy of the ‘Iowa Car Crop’ is this…. the only people who could afford to buy them would be Iowa farmers. In this simplistic model everyone else would be under or unemployed… and so therefore cannot afford to buy them..
Even Henry Ford knew that the he could only be successful if his workers could afford to buy his products.
“In this simplistic model everyone else would be under or unemployed… and so therefore cannot afford to buy them..”
And yet in the real world people who do not manafacture cars can afford imported cars, this is just a model with only 2 goods to show the logic of trade.
Surely then if the Iowa car crop model is flawed on the grounds that only the corn farmers can afford cars, then your model is flawed on then grounds that only the people who manafacture the trains can afford to ride them? Either way that is a fallacy that you are arguing.
The Iowa car crop simply shows that we dont lose domestic jobs by importing a good. It shows that in reality kiwirail isnt competing with chinese train factories, it’s actually competing with cantabury farms.
The quaint little story you link describes what is called a ‘toy economy’. In other words it hugely simplifies the real economy down to a very simple model that is easy to talk about….and then uses that tale to draw conclusions that it then claims would be valid if projected onto the real economy.
In this toy economy there is only ONE class of people in the USA making an income… the farmers. No mention of how anyone else could possibly afford to buy a car. Therefore it fails on it own logic.
Toy economies are a useful teaching tool, but are not a substitute for real world analysis.
I don’t think that they’re a useful teaching tool either as idiots take them as being real.
But they are buying the cars with borrowed money at the rate of $350 million a week. What suckers we all are and have been for decades … ever since Britain closed off our exports way back when? when? and we had to stop living in a fools paradise… but we didn’t…
More free-market bollocks. How so?
Because we also mine and produce the steel here so exporting food to re-import the exported steel is inefficient and massively ramps up real (physical) costs.
Surely the price system is the best way to determine who can keep real costs down the most? And the Chinese had the lowest bid, so they would probably be able to complete the project with the lowest cost, no?
Nope. Making them in China actually increases real costs. More fuel used (transport and coal fired power stations), more people used pushing costs (food, houses, transport etc) there up as well and the fact that they’re likely to be importing the steel from us anyway. It would, in real physical terms, be cheaper to make them here. The only way it could look cheaper is because the price system is corrupted through things like exchange rate manipulation and high interest rates. And even if the price system wasn’t corrupted, which it is, the lowest bid wasn’t the best bid as the wider economic benefits of making them here vastly outweighed the savings achieved by importing them.
I dont think you read the link I posted. The question isnt ‘is it cheaper to make the trains here or in China’, the question is ‘is it cheaper to make trains here, or to grow cows here and send them off to China in exchange for trains’. Even if New Zealand does have an absolute advantage in the production of trains (which is essentially what you are arguing), we do not have a comparitive advantage in the production of them.
In a highly mechanised industry comparative advantage is meaningless as it’s something that any society can do. All it needs to do is train the people to have the skills (done) and build the factory (also done). Also, it’s not proven that we have such an advantage – the pollution in our rivers from farming would indicate that we don’t (the price of food is far lower than the price of trains so we have to grow far more food to pay for the trains meaning more pollution which we then have to pay to clean up).
So, we’re left with absolute advantage and what’s best for our society as a whole. The absolute advantage is that it’s cheaper to make them ourselves and it’s better for our society if we do so as well because it pushes the bounds of our knowledge and skills which pushes our culture to develop.
And, no, I didn’t read more than the first two lines of the article. I’ve studied economics for the better part of ten years now so that was more than enough to understand the simplified (for RWNJs) version of BS that it was selling.
Trouble with you guys is you have no thought for the poor chinese workers who will be out of work and starving … no UB in China I suspect … if we don’t buy Chinese.
Sorry moderators … that’s trollish … but its Christmas and I am a little drunk 🙂
NZ bought locomotves from many countries like Britain UK and Us in past
Never worried about any economic benefits lost to NZ because the benefits of having them put together by experienced firms that make them all the time is superior.
Yes they did Swampy but think of the industrial base we could have built in addition to our agricultural base if we had built those locos in New Zealand. But of course the British industrial power ruled the world then with the States tagging along … but quite quickly of course we DID build our own locos … so somebody had brains back in those days and Hillside, Addington and the other workshops came into being.. Yes in this field we did have an industrial base which has been let run down by foolish limited thinking economics rather than proper holistic assessments.
So often in so many different fields …. it makes me cry.
That was to buld steam locos much less technology involved. When the end of steam came in NZ so to did come the end of locomotive building except very simple ones.
The clear benefits were seen then of buying from experienced builders because of leap intechnology needed. and being geared up to make them meant they could be made a lot quiicker (sound familiar>)
Look at the poms experience. a lot of locos having very short lives because the builders didnot have a clue.
There are a few private builders established in Aust if there was an advantage to building in NZ they would have come over by now.
Yep, we did – until we started making them ourselves.
It seems that they did, as a matter of fact, take into account wider economic benefits. They didn’t call them that but they did take them into account.
Yes, I am proud to call this my viewpoint 😀
Kiwi rail has the benefits from spending the money that was saved on these locos – wagons on something else
Still has economic benefit.
of, Nick C, we can just make sure government subsidiaries consider the impacts of their decisions on the whole government.
It’s not revolutionary, it’s not anti-trade. You wouldn’t expect a division of Microsoft to ignore impacts on the whole company when making its decisions, why should the government be different?
the fact that you’re resorting to anti-trade misdirection suggests you don’t have an answer.
No, kiwirail should act in the interests of the country, which is exactly what it is doing here by taking the cheapest contract
As I said, there are two ways we can make trains: We can build them in Dunedin or grow them in Cantabury (that is to say, export something and get trains as an import in return). If we build trains in Dunedin then the Cantabury farmer goes out of business. If we grow the trains in Cantabury then the Dunedin factory goes out of business.
And no matter how many times you repeat it it still isn’t true. The wider economic benefits of making the trains here far outweighed importing them. Go read the Berl report.
Of course it’s true. What do you think the chinese want in return for building these trains for us? Green pieces of paper with pictures of the Queen on them?
No, they want dairy products, and various other things that New Zealand can export. So when we buy goods from China we give them the NZ$ to buy goods from here, thus helping our export industries. If the chinese never got the $NZ they would never buy the NZ milk and therefore the export would never happen.
Point me to where in the Berl report that is taken into account. If its not, then it isnt worth the paper it is written on.
If your argument was true – the Chinese had a trade surplus with New Zealand before this deal.
Otherwise
1. Nations don’t barter.
2. They have the foreign currency reserves (trade surpluses with many other nations) to buy New Zealand, not just our dairy products.
Typical RWNJ – just doesn’t fucking listen.
The cost/benefit analysis, taking into account the wider economic benefits of making the trains here, show that it’s better for NZ to make the trains here rather than exporting dead cows and importing trains.
Get it?
This is so fraking stupid your RWNJ certificate is hereby revoked.
(PS as long as Fonterra accepts USD, which the Chinese happen to be sitting on hundreds of billions of, our dairy trade will be just fine. You’re hereby also downgraded to Financial n00b.)
The Berl case assumes a gravy train approach
Its 1970s Muldoon in power The railways get told to mop up unemployment by making work for peop,e on the dole queue etx
Railways show a huge loss in the govermment accounts at the end of the year
That used to happen but does not any more. We live in the real world now. N one in their right mind is going to suggerst we start a locomotive building industry from scratch by throwing pots of money into the railway workshops that will be lost on the costs of setting up from scratch.
But we already have the nucleous of a railway building industrry and we had one until the RWNJs sold it out from our control. You guys just don’t know your history. The stupidity of the RWNJs is un believable. Such limited thinking and concept of reality which should be obvious to them as it is to me with my limited brain power.
I’m drunk remember and going for another …..
NO we did not the rail workshops are about the capacity they were late 80s well before Privatisation was guessed at
A tiny number of very simple locos put together one at a time or assembled from kit sets made overseas in the last 40 years. not a locomotive building indstry.
The shops do have the capacity to overhaul & have been doing so many years but its all spread out so they are working continuoulsy. gearing up extra capacity for short period of contract then laying pple off at the end is wasteful.
yeah, according to National giving talented NZ’ers work for a year or two is wasteful, as is building up our industrial capacity to be able to bid on more work overseas.
I think National needs to start wearing an L on its forehead.
Yeah but we could obtain that capacity. And we are proficient at building modern rail cars.
No. We are proficient at refurbihsing carriages and units. There is a difference in designing them fromm scratch and rebuilding existing ones which is what the work shops have been doing for years. using some one else’s design and reparing the carriage or wagons according to the manufactureres spec is quite different to starting from scratch.
The notion the unions put out that the shops could compete with other manufactureres overseas is quite ridiculous especially with Asian manufactureres. most larger countries have their own railway builders already established without the dis advantgae of the large distance we are by sea from any export martket.
Theory of Comparative Advantage Debunked
Refresh my memory. Who was the NZ sales agent for this deal? How much was the commission?
Sammy Wong was working for Kiwirail … http://pansyfacts.co.nz/category/questions-arising/
According to KiwiRail he was working for PPD (NZ) Ltd. See: http://www.blueskynz.net/index.php?styleid=2). The website states that PPD ‘serves as a duly authorized representative and an amiable ambassador for major leading enterprises of China’s railway industry.’ Pansy has contradicted the KiwiRail statement. PPD were the agents, again the website states, in Mandarin (Google translation, sorry) that: ‘ PPD team success with the New Zealand design, manufacture and supply of the 100 container trucks, the vehicle is currently in New Zealand railway line has been fully operational. The container truck designed to fit the meter gauge railway line in New Zealand transport and design, is the first time New Zealand rail vehicles vehicle market, but also received the New Zealand Government Railways assets, for the first time all the vehicles in overseas orders.’
But we are not metre gauge railway but 1066.8mm .. what else is bunkum ?
Which means he wasn’t working for Kiwirail, but for an ‘authorized representative and an amiable ambassador for major leading enterprises of China’s railway industry’. So how much was PPD’s commission and who are their shareholders?
it might be madness but in the long run all foreign currency has to be paid for and usually in trinagular offsets.
kiwi rolling stock is only a goer if we can export surplus production.
that is the nub and not just the short term effects here.
the government knows it cant engineer that sort of capacity without treading on significant toes overseas and making the situation worse.
Sure. kiwirail compete against establihed builders with track record like all the AUssie ones to say the least. never happen
Why did Key need to be kept appraised of Wongs interests in the hovercraft company? Why was Wong with Key on several ? business trips to China ? Did Key know about Wong being an agent for CNR interests ? Does the Key/ Wong connection go a lot deeper than we know about? Can you really believe that Key is not still trading/dealing ( WTF does he do all the time in Hawaii considering that he has a beach house here in NZ ?) Is it a good cover for who knows what ?. And finally if you think all of the above is unlikely, ask yourself , “Do I really trust him?”
Of course Key is still trading. Before he was trading NZ currency. Now the whole of NZ is his trade currency.
Yeah follow the money trail…
From Sammy Wong to Pansy Wong to John Key to Bill English Hmmm 7 million saved split 4 ways not a bad bit of wedge for them just for ripping off the NZ workers and tax Payers..
Let em come after me with a law suit (I got no money it’s all been stolen by the NATS) So I’ll say it again They are ALL CORRUPT!
The amount of time that left wing blogs have spent attacking Kiwirail over its tendering decisions is grossly disproportionate. It is really just the advance wave of next years election campaign being fought by Laour and one of its key afialiate unions.
There’s not going to be any return to the day of massive government subsidies to the rail network so get used to it
Apparently stripping capability enhancement and product development opportunities from NZ industry (not even mentioning putting jobs at risk), while giving those same opportunities to foreigners, is not worth too much of a second thought to you.
Well it is to Labour, and you will hear about it day after day next year.
Just massive National Government subsidies for failed investors and highways to no where?
Yeah your crew are clueless, planless, and a team full of missed opportunities.
Roll on 2011, can’t wait.
Labour Government spent $660 million of OUR money buying rail workers votes last election and still lost. Eat that.
And that would be because the Labour Party stands to benefit financialy wouldn’t it
Just like antoher example $1000 bonus to union memmbers in certain State sector awards, effectively free union membership paid by the taxpayer.
Motorways to nowhere mate. Hey did you see premium 95 break through $2/L ?
If the othe decision was the building of locomotives it is very wrong to say its about small amount of money
70% more expensive to build the locos in NZ = substantial amount.
Its also quite wrong to say Farrar issupporting this cause, he has not expressed anything that suggests that he just let his mate post on his blog.
Now what is being asked? government subsidies to kiwirail so that it must buy in NZ well this is really old hat and it should not amount to the goverment giving money to its own company to be favoured over competitoors in the marketplace
Its not surprising to me to see this sort of political lobbying that Kiwirail (whose employees just happen to make up the membership of one of the Labour partys key union affialites) should be granted aprivileged status over and above just because its goverment owned and the fact this sort of lobbying is going on is a good reason why the goverment should not own a rail operator or any business that competes against the private sector as rail actually does.
He didn’t let his mate post on his blog as he has done in the past year with several contributors but he copied and pasted this personal blog onto his own blog. And I thought the lefties were the conspiracy maniacs but you are just as bad..
I’m off to bed now … you can guess why 🙂
Seems to be a bit less than the 70% that you’re saying.
70% for locos
25% for wagons
Different contracts
Know your future: http://www.chinadaily.com.cn/regional/2009-09/11/content_8683882.htm
From deWith’s link:
“Therefore, the New Zealand specifies that before the imported locomotive contract is placed the Trade Unions shall take charge of the last procedure to decide whether it is signed after its investigation. On February 9th, 2009, the New Zealand Trade Unions made an on-the-spot investigation to Dalian Locomotive & Rolling Stock Co, Ltd and took a ride on HXD3 electric locomotive, during which time they were highly satisfied by what they had reviewed”
Velly intelering…….anyone know who exactly was in this “New Zealand Trade Unions” delegation?
Rail and Maritime Transport Union, Kiwirail Industrial Council, Locomotive Branch delegates
China knows how to do it, this National Government does not.
Read and weep RWNJ’s: active govt procurement is crucial in the development of an advanced, high value industrial economy.
The NATs just bumble along with their anti real economy agenda.
“It doesn’t make sense for parts of the government called SOEs to act as if they are independent entities and ignore the impacts of their decisions on the the rest of the government. ”
Actually, it does. SOEs are set up to be at arms’ length from the goverment. The reason why this is important is SOEs are engaged in commercial activties which often compete with private sector companies. Therefore their operation has to be totally transpoarent and free of political interferece.
What doesnt make sense is for a government to direct an SOE to make a poliitcal decision which is what you are advocating. Savings made from these contracts will go into some other part of Kiwirails operation rather than buying political favours.
Agree and disagree. We retain ownership of SOE’s for strategic reasons and the hands off approach is to allow for transparency on strategic investments rather than the hidden social subsidies common in the Muldoon era.
The imperatives of a fully private enterprise are always towards short term profit. The state retains ownership stakes to ensure that longer term ‘infrastructure’ decisions with longer paybacks can be made. It means that if the state wants to make them then it needs to pay for them.
In this case, the question about being able to maintain our ability to maintain our ability to repair and build our on rolling stock over the long term is a political decision not a short term commercial one. It is the same type of decision as bailing out air nz to maintain a air freight link for nz required by our exporters.
In my view we need to be able to build and maintain our rolling stock over the longer term. The government should invest in making sure that happens.
“Is it worth the risk for a measly $7 million? I for one don’t think so and I would be happy to foot my portion of that bill as a taxpayer.”
Which comes to just under $2 per every person in New Zealand.
$2.
You can buy about 15 minutes carparking in downtown Wellington for that price.
Or a newspaper.
Or a packet of chewing gum.
But not much else. Yet, for just under $2, we could have provided New Zealanders with jobs. I’m with David Farrar on this; the decision by Kiwirail flies in the face of common sense.
Cancel the contract. And while we’re on cancelling contracts – let’s look at Jim Quinn’s.