Local Govt minister wants to privatise water

Written By: - Date published: 11:58 am, November 17th, 2008 - 91 comments
Categories: national/act government, public services - Tags: , , ,

As you’ll have read, John Key has made ACT leader Rodney Hide his Minister of Local Government. So, what’s ACT’s local government policy?

Commercial activities are best performed by the private sector because they have more incentive to innovate and deliver better services. Local government should progressively shed ownership of its commercial activities.

Local government should be confined to the core activities that produce general public benefits, such as regulation, flood control and roads.

Local government will be required to shed its commercial activity, thereby eliminating the need to separate regulatory and commercial functions between local and regional councils.

Roads and piped water will be supplied on a fully commercial basis.

Require councils to focus on their core functions.

Ensure there is much greater scrutiny of regulations that undermine property rights.

Lower the cost of complying with the Resource Management Act and other regulatory regimes.

Promote contracting out of many council services.

So, contracting out, privatisation of public assets and the commercialisation of water and roads. Is this the change people had in mind when they voted for John Key?

UPDATE: Herald journo Martin Johnston has done a good piece on ACT’s radical plans here.

91 comments on “Local Govt minister wants to privatise water ”

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  1. mickysavage 1
    17 November 2008 at 12:05 pm

    Be afraid New Zealand be very afraid.

    Regrettably the presentation of the review of Auckland’s Governance could not be worse timed. The report is due to come back in March 2009 and will present the new Government with a blank slate on which to develop reforms.

    It will be a good chance to see if this Government is labour lite or something more sinister.

  2. Julie Fairey 2
    17 November 2008 at 12:06 pm

    It seems to me that Rodney Hide is the Minister for Local Government that you appoint when you don’t want to have any Local Government…

  3. Chris S 3
    17 November 2008 at 12:10 pm

    I would like to know what kind of restrictions these companies will be operating under.

    If it’s unprofitable to pipe water to your house, do you pay more, do they not bother? Do they encourage you to collect and pump your own water?

  4. leftrightout 4
    17 November 2008 at 12:11 pm

    Just like how telecom innovated and delivered better sevices…

  5. Billy 5
    17 November 2008 at 12:14 pm

    So the way to reduce carbon emmissions is to create a market whereby those who engage in undesirable activity have to pay for that activity. Anyone who thinks this is a bad idea is treated like a holocaust denier.

    Yet propose the same thing for water and we all have to “be afraid”.

  6. Robinsod 6
    17 November 2008 at 12:14 pm

    National would never allow this to happen. Well not in the first term at least…

  7. Robinsod 7
    17 November 2008 at 12:20 pm

    So the way to reduce carbon emmissions [sic] is to create a market whereby those who engage in undesirable activity have to pay for that activity. Anyone who thinks this is a bad idea is treated like a holocaust denier.

    No Billy – the best way to deal with carbon emissions is to nationalise the means of production and run carbon reduction as a centralised initiative…

    Y’know kinda like water is run…

  8. Phil 8
    17 November 2008 at 12:21 pm

    Billy,

    Can you do us all a favour and privatise ‘sod?

  9. travellerev 9
    17 November 2008 at 12:22 pm

    Robinsod,

    I think they will. If I’m correct and John Key is just a pawn in an international banking cabal gone wild then he will happily privatise water, sell of the black sands open up the Coromandel to mining sell of our gas and oil and borrow huge amounts of money to bankrupt this country. It’s his job. it’s what he’s been told to do.

    This is not about local policies, this is about the last big heist of the international banksters before the final meltdown. Three years is all they have and even less if the people of the US realise that there is just no more food, jobs and they have been stripped of whatever was left by the banksters.

  10. Janet 10
    17 November 2008 at 12:27 pm

    This new government seems determined to go back to last century and relitigate battles already fought. In the 1990s many local authorities were entranced by managerialism and privatised everything in sight. In Wellington the publicly owned electricity company was sold even though it broke an election promise by Blumsky. Remember when ‘business process reengineering’ was all the rage? What happened is that many parks, libraries and other public assets barely survived, and some friends of the powerful made a lot of money out of the privatised contracts.

    And the climate change deniers are now going to get public money to feather the nests of their polluting multinational sponsors.

    And now Rodney says bulk funding and vouchers are back on the table in education!

    I can’t imagine Mr 3.7% and his entitlement-itis will remain very popular for very long, even with the right. Especially as there are about to be some very disgruntled Nat MPs with their own sense of entitlement-itis who are going to miss out on cabinet posts. .

  11. Billy 11
    17 November 2008 at 12:28 pm

    So, ‘sod, you’re against the ETA?

    (I have scanned the above six times for spelling and grammatical errors).

  12. Tane 12
    17 November 2008 at 12:30 pm

    (I have scanned the above six times for spelling and grammatical errors).

    Don’t you mean ETS, Billy?

  13. Wil 13
    17 November 2008 at 12:35 pm

    Of course, ‘sod would be against the ETA like most of us who are not act trolls.. Expected Takeover by Act.

    ps sod, like you I couldnt stop laughing at that hurriedly restructured blog message “welcome to your new drupal website” floating there on whaleoilspill.

    looking forward to any IP identities… hint…

  14. Billy 14
    17 November 2008 at 12:38 pm

    I meant the Act, rather than the Scheme.

    But if your point is that I am fewer cleverer than ‘sod, you’ll get no argument here.

    [Tane: That’s a relief. I thought you were slipping Billy…]

  15. tsmithfield 15
    17 November 2008 at 12:39 pm

    So, whats actually wrong with privatising water? If people actually have to pay for it, they might conserve it.

  16. Janet 16
    17 November 2008 at 12:41 pm

    I hear there are going to be 28 cabinet ministers – surely the biggest and most expensive executive for years. Cost cutting is only for others apparently.

  17. Robinsod 17
    17 November 2008 at 12:43 pm

    Phil – I’m already private sector (and doing very well I might add)…

    Billy – no, I’m in favour of the ETS because it makes the polluter pay… to some extent… It could go a lot further but I’m not going to oppose a move in the right direction because it doesn’t fit my ideology – life’s hard enough without making myself as miserable as your average libertarian…

  18. Janet 18
    17 November 2008 at 12:45 pm

    The trouble with privatising water is what happens when people, including children and old people, can’t afford it? They die. Because someone else is making money out of and thus limiting something that is vital for life.
    Privatised water is immoral.

  19. Billy 19
    17 November 2008 at 12:46 pm

    And privatised food as well, obviously.

  20. bill brown 20
    17 November 2008 at 12:47 pm

    tsmithfield,

    I agree, privatise water what’s the harm? After all if you can’t afford it you can go “down the road” after all “it’s a market”

    Worked for electricity didn’t it?

    Might also work for GPs.

    Arseholes, it’s the eighties all over again – with Douglas!

  21. leftrightout 21
    17 November 2008 at 12:53 pm

    tsmithfield, essentials of life are NOT for sale.

  22. Chess Player 22
    17 November 2008 at 12:54 pm

    Um, Why don’t you just get a water tank and a pump?

  23. randal 23
    17 November 2008 at 12:55 pm

    tsmith
    its just another crummy ploy by wodney to commodify a necessity and place a revenue stream into the hands of wodneys pals
    dont you know he is a huckster and a greedy one at that
    open your eyes drongo

  24. uroskin 24
    17 November 2008 at 12:56 pm

    I live on an island. I’m responsible for my own water collection and waste water disposal on my own property, I can’t let it run off on the neighbour’s, or unlike farmers just simply dump it in the river. This is sustainable and preferable in a non-urban setting and I am glad I don’t have to drink Waikato River water like Aucklanders are forced to (and have to pay for!). I can’t understand why anyone would want this kind of natural monopoly to be privatised and expect better, cheaper and more effective service, or even potable water. Or does ACT wants to see two parallel pipelines for water delivery to enforce competition? Or a silly water provider/pipe network provider split as we have in electricity. Back to the future on that one!

  25. randal 25
    17 November 2008 at 12:56 pm

    the whole act crew are just graspers
    and thats not only their pillow hugging antics at night

  26. Robinsod 26
    17 November 2008 at 1:03 pm

    And privatised food as well, obviously.

    And air – billy – don’t forget air…

  27. leftrightout 27
    17 November 2008 at 1:07 pm

    Sunlight? Can we privatise that to please?

  28. bobo 28
    17 November 2008 at 1:09 pm

    Hate to say I told you so a few weeks back that privatizing water was on the cards… It will be done under the same mantra that electricity was done, maybe shares issued to the public. Scary how the media are still in honeymoon period while the gov is already positioning itself to cut local body control. The MP deal is just a diversion with a few token cabinet positions to sidetrack what’s really happening. Hopefully public outcry can stop it once the media pick up on it especially after the fat lazy arrogant contact energy board directors proposed pay rise is fresh in the public’s mind.

  29. Santi 29
    17 November 2008 at 1:12 pm

    Traveller wrote “I think they will. If I’m correct and John Key is just a pawn in an international banking cabal gone wild ..”

    Now tell us about the UFO landings and Area 51. Is there any limit to your childish imagination? What other conspiracy theory are you about to unleash on the readers of this blog?

    Dutch Einstein, just stop being silly and grapple with the facts, not your fantasies.

  30. travellerev 30
    17 November 2008 at 1:15 pm

    According to CBC news indept the following:

    Water, like air, is a necessity of human life. It is also, according to Fortune magazine, “One of the world’s great business opportunities. It promises to be to the 21st century what oil was to the 20th.”

    In the past ten years, three giant global corporations have quietly assumed control over the water supplied to almost 300 million people in every continent of the world.

    You can find a huge amount if real good information about the privatisation of water here it’s bad news.

  31. randal 31
    17 November 2008 at 1:26 pm

    yes ev
    there is a really good book by one donald smith(?) on how the right wing in america spent the late 70’s and early 80’s analysisng the liberal american foundations and turning their aims and methods around to suit their own pernicious right wing agenda
    while they were at it they also carefully listed all the things they could commodify and charge for once they were in power
    its a sick sic sick world ev
    and at the moment the pillow huggers are in control

  32. tsmithfield 32
    17 November 2008 at 1:27 pm

    leftrightout: “tsmithfield, essentials of life are NOT for sale.”

    Food is an essential and we pay for that, right? So maybe food should be free as well?

    Anyway, I understand that water is charged for NOW in Auckland.

    In Christchurch water usage is becoming an issue. There is talk of everyone having a certain allowance for free and then paying for excess above that. I have no problem with charging for water on this sort of basis, especially if it is a commodity that is in shortage. Making people pay for something makes them think about how they use it.

  33. Chess Player 33
    17 November 2008 at 1:39 pm

    You all currently pay for water, unless you are on tank water.

    The only thing that changes is whether you have this water shown separately from a Billing perspective, eg a separate invoice, but be assured that you do pay for this right now. It may just be a hidden cost. Renters also pay, as their rent contributes to the landlord’s costs.

    Auckland water comes mainly from the Waikato, and over recent times the price has been increasing and the quality has been declining.

    You have no way to control either the price or quality of your water if you receive it ‘piped’ other than through the periodic council elections and making water an issue.

    Privatisation is going to be remarkably similar to the current situation, therefore you have no choice but to, as I said before;

    Get a water tank
    Get a pump
    and
    Get over it

  34. bill brown 34
    17 November 2008 at 1:42 pm

    CP, it’s not the paying for the water and the infrastructure to deliver it that’s the problem. It’s the paying for the profits of the water company, not to mention the cost of them buying the infrastructure that I already own that’s the problem.

    And your get a water tank bullshit is just that.

  35. bobo 35
    17 November 2008 at 1:44 pm

    The issue is not paying for the water infrastructure service, it’s paying for a profit for shareholders. Did the Herald sit on this article before the election because its useless to us to read it now its almost as if they have these articles pre-written ready to go. You now have a perfect right storm in place with Banks as Mayor working with Wodney on policy.

  36. travellerev 36
    17 November 2008 at 1:44 pm

    tsmithfield

    Well, actually now that you mention it. There was a time not so very long ago that food indeed was free. It has been free actually for most people around the world because they grew it themselves and shared access or bartered with it.
    In the whole human history starting some 2.5 million years ago food was free.

    It is only in the last couple of hundred years as cities grew that there developed a need for a currency in order to barter for food. One notable exception earlier than that was the Roman empire but even then food was grown by everybody so money and coins was used to pay those (like soldiers: actually they were paid in Salt, hence the term soldiers) who could not grow their own food because they did not have the time.
    Until very recently added to that people grew flax for linen and had sheep for wool.
    So yes, food and clothing was and should and will be free again some day.

    A few hundred years against a whopping 2.5 million years is indeed a minute amount of time.

    The whole capitalist idea of monopolising resources for the profit of a few is an immoral, unsustainable and obsolete idea. The system is crashing as I write this and good riddance I say.

  37. Felix 37
    17 November 2008 at 1:46 pm

    Wodney on Nat Radio this morning discussing compromising with the maori party:

    There is compromise but it’s not compromise in a bad way, it’s actually compromise in a good way in that, you know, the sum of the parts, hopefully – and this is our aspiration, I think it’s Pita’s aspiration – the sum of the parts become more than the whole.

    That’s right, Wodney’s aspiration is that the sum of the parts be more than the whole.

    Congratulations ACT-ups and Epsomites, you’ve elected a grade A moron. He should represent you very well.

  38. bobo 38
    17 November 2008 at 1:51 pm

    Felix – Wodney has got more incoherent over the years, even on the the few debates he did, he rambled on contradicting himself. I think we will find Wodney is more at home in opposition than governing a bit like Winston was.

  39. gingercrush 39
    17 November 2008 at 1:53 pm

    I think Mr. Hide wants to privatise water but I really don’t think National does. I hope they don’t. But my understanding is that Auckland doesn’t pay that much for water anyway and their rates seem significantly better than what we have here in Christchurch.

  40. bill brown 40
    17 November 2008 at 2:01 pm

    GC – how do you know the Nats don’t want to privatise water? Is this just a feeling you have or have you seen it written down or heard it?

    So far the only statements we have are from a joint document signed by JK and ACT saying commercialisation is a part of the govt’s agenda. Is that not good enough for you?

  41. Chess Player 41
    17 November 2008 at 2:06 pm

    bobo,

    “Wodney has got more incoherent over the years, even on the the few debates he did, he rambled on contradicting himself. I think we will find Wodney is more at home in opposition than governing a bit like Winston was.”

    Incoherent? Well, he’s not the only one is he? Heard of punctuation? Or has that been privatised already?

  42. gingercrush 42
    17 November 2008 at 2:06 pm

    And where in the agreement does it say that?

  43. higherstandard 43
    17 November 2008 at 2:10 pm

    And privatised food as well, obviously.

    And air – billy – don’t forget air

    And children – don’t forget the children

  45. Quoth the Raven 45
    17 November 2008 at 2:17 pm

    I think Mr. Hide wants to privatise water but I really don’t think National does. I hope they don’t. But my understanding is that Auckland doesn’t pay that much for water anyway and their rates seem significantly better than what we have here in Christchurch.

    But Ginger don’t you know the market is always better. Please hand in your blue ribbon and cocaine mirror you’re no longer a rightie.
    I’ll take our clean water here in Christchurch over the water they have in Auckland anyday.
    As long as we’re on the topic I wonder how long it is till they gerrymander local governemnt the way fed farmers want it.

  46. Santi 46
    17 November 2008 at 2:19 pm

    “The whole capitalist idea of monopolising resources for the profit of a few is an immoral, unsustainable and obsolete idea. The system is crashing as I write this and good riddance I say.”

    Dear Travellerev, if you hate the system so much, why do you live in a capitalist society? Why don’t you export yourself to one of the worker’s paradises on Earth, say Cuba?

    What are you doing in the middle of capitalist New Zealand? Isn’t yours hypocrisy or what?

  47. bobo 47
    17 November 2008 at 2:25 pm

    Nice to see you add so much to a debate Chess Player, privatizing power has added so much “value” to the consumer with such stiff competition driving power prices down from what they were under the evil government control, I guess you were in favour of Contact Energy director’s fee rise? Maybe you are on the board? Your ACT ideology is that low tax and a free market is the answer to everything is so simplistic no matter what punctuation you use.

  48. Janet 48
    17 November 2008 at 2:29 pm

    I’m sure there are some traditional compassionate conservative Nats who are getting a bit nervous about Rodney setting the agenda so early and strongly. Every time he opens his mouth their re-election becomes more and more doubtful.

  49. Chess Player 49
    17 November 2008 at 2:33 pm

    bobo,

    “Your ACT ideology is that low tax and a free market is the answer to everything”

    Please explain where I have said this?

  50. Phil 50
    17 November 2008 at 2:33 pm

    Wodney’s aspiration is that the sum of the parts be more than the whole.

    Does that count as Gestalt reverse-psychology?

  51. Chess Player 51
    17 November 2008 at 2:37 pm

    bobo, bobo, are you there?

  52. Vinsin 52
    17 November 2008 at 2:40 pm

    Gc, people in Auckland pay some of the highest rates in the country as well as the highest for water. The water bill is split into two parts: waste water and water usage. Water wastage is meant to be paid by the home owner and water usage is meant to be paid by the leaseholder/renter of the house – if there is one. Water wastage is every time a hose is turned on, or every time a toilet is flushed. Water usage is whenever a tap is turned on inside the house ie, a shower, kitchen sink. The water bill comes in twice a year normally and from my experience of living in a a four-bedroom house each bill has been anywhere between $400 – $600.

    This is what the council buys with every dollar paid by rate payers.

    20.5 ¢ on wastewater (inner area only)
    15.4 ¢ on parks
    17.7 ¢ on roads and footpaths
    6.8 ¢ on leisure
    7.3 ¢ on libraries
    8.6 ¢ on policy development, partnerships and planning
    3.5 ¢ on city development, promotion and economic development
    6.5 ¢ on stormwater
    2.8 ¢ on all other services
    3.6 ¢ on democracy
    1.6 ¢ on consents & field services
    0.5 ¢ on recycling and waste minimisation
    1.1 ¢ on resource management
    0.9 ¢ on emergency management
    0.6 ¢ on animal welfare
    2.6 ¢ on Auckland War Memorial Museum and MOTAT statutory levies

    Total $1.00

    I wonder just how much a private company would cut from that list?

    Oh and just a side note, Auckland water is quite possibly the worst water in the country.

  53. travellerev 53
    17 November 2008 at 2:45 pm

    Santi,

    Actually up until the election NZ had a very moderate form of Capitalism. A bit like the Dutch system with a healthy dose of human compassion thrown into it with a social support system, public schooling and healthcare. You want pure capitalism? Why don’t you move your ass over to the States. From what I hear capitalism goes really well over there. He how strange! Capitalism is out for the rich they now all want big time socialism

  54. gingercrush 54
    17 November 2008 at 3:00 pm

    Bill Brown – That is not part of the National-Act agreement. That is Act’s policy they released before the election. Do not get those mixed up. Because they are not the same thing.

    Since when was being to the right meant you believed the market was always better? Sorry but that doesn’t equate.

  55. bill brown 55
    17 November 2008 at 3:06 pm

    GC,

    Hide is the minister for local government.

    Hide is the leader of the ACT party

    ACT policy is to commercialise local government activities

    One very large activity of local government is the provisioning of water…

    Are you getting the gist now – do I need to use words with fewer syllables?

  56. Billy 56
    17 November 2008 at 3:08 pm

    Actually up until the election NZ had a very moderate form of Capitalism.

    And in the nine days since we have experienced “extreme capitalism”.

    Ev, why have you gone quiet on depleted urarnium? In the early days (which I like to think of as your salad days), you used to go on about it about one post in five. Is it not an issue which now concerns you?

  57. insider 57
    17 November 2008 at 3:17 pm

    A private multinational deals with Wellington’s waste water. Why are they incapable of dealing with supply?

    Other countries seem capable of dealing with private water suppliers without consumers dying, why are we so incompetant?

    Personally I prefer service delivery and asset management potentially being put out to tender with assets owned separately by an asset owning company – perhaps the local authority.

  58. gingercrush 58
    17 November 2008 at 3:18 pm

    bill brown your point is still irrelevant because it isn’t National’s policy.

  59. bobo 59
    17 November 2008 at 3:21 pm

    Sorry I was working , you state that the local body water infrastructure system that we have now is pretty much the same as if it was privately owned asset? Maybe you need to get your tank water checked for lead poisoning? I guess you are not an ACT/national supporter then I stand corrected.

  60. higherstandard 60
    17 November 2008 at 3:48 pm

    Billy

    Why don’t you fff fade away
    Don’t try and dis what Eve’s trying to say
    She’s not trying to cause some big sensation
    Just continuing her work exposing this conspiracy situation

    All together now …..

  61. Kevin Welsh 61
    17 November 2008 at 3:52 pm

    I was particularly impressed with Toll’s ability to “innovate and deliver” with TranzRail.

  62. insider 62
    17 November 2008 at 4:01 pm

    well they managed to sucker labour for a couple of hundred million more than their business was worth – the former PM described it as a ‘premium’ ; it certainly was premium for Toll shareholders so they certainly delivered.

  63. higherstandard 63
    17 November 2008 at 4:02 pm

    Kevin

    Indeed they were almost as good as when railways was owned by the government.

  64. Felix 64
    17 November 2008 at 4:25 pm

    insider

    That’s right, privatisation inevitably leads to the taxpayer being ripped off to make profits for the shareholders of private companies.

    On this we agree.

    Only a careless or reckless govt would expose the taxpayer to such unnecessary expense by privatising publically owned assets.

  65. insider 65
    17 November 2008 at 4:51 pm

    Felix

    i don;t recall anyone forcing Cullen to pay hundreds of millions more than he should have, so how did Toll inevitably rip me off as a taxpayer? In fact he did it against advice. So any blame rests on his shoulders.

    I’d say there’s a pretty strong track record of taxpayers being ripped off as a result of governments picking economic winners. In fact, this country was almost bankrupted as a result.

  66. Kevin Welsh 66
    17 November 2008 at 5:02 pm

    Cullen was pretty much between a rock and a hard place. Either leave it as it was and have Toll drag out the track negotiations, and imply that services would continue to be downgraded, or, kick them to the kerb and put it back into public ownership where there would at the very least be an attempt made to revitalise and upgrade services. I believe the long term future for rail is a good one. I just needs someone with the balls to drag it into the 21st century and make the capital investment.

  67. TimeWarp 67
    17 November 2008 at 5:06 pm

    “So, whats actually wrong with privatising water? If people actually have to pay for it, they might conserve it.”

    A very valid argument… let’s look at it a little deeper than one sentence:

    Where do the significant constraints in supply of water and the ongoing management of the resource (ie clean and safe disposal) occur? If we identify that, then we identify the areas that a privitisation would address. Unless privitisation happens for privitisations sake, there are outcomes to be achieved and we should work back from the desired outcome to a program that will deliver it. So to take your outcome tsmithfield, where to do we need to conserve water?

    Is it with Domestic consumption? Not that I can see. Our towns and cities generally have good supply and reasonable disposal facilities. Auckland for example has oversupply with the Waikato River pipeline, and the Watercare purification and disposal facility in Mangere is worldclass in delivery apparently pure water back into the ecosystem.

    Is it in Industrial use? Yes, sometimes, a little.

    Is it in Agricultural use? Absolutely yes, if we look into the near future. There have been numerous commentators both locally and internationally comment on the burst of agriculture utilising irrigation schemes which then come under strong demand pressure and need a good resource allocation model. Surely the simplest mechanism is to charge users in order to dampen demand. Agriculture is also the main polluter of water, causing the degradation of every major central North Island lake with the exception of Okataina, and increasingly the Waikato.

    So a water privitisation sheme might be an outstandingly good idea – if it was targeted at the Agriculture sector.

    You’ll never see it though. Here is a party that has campaigned to and been voted for by NZ famers on the basis of fighting “fart taxes” and the “Emissions Trading Scam”. Agriculture will be sacrosanct from newly applied user-pays increased cost.

    Any privitisation scheme (which at this stage I personally think is speculative) would then be domestic focused, and purely privitisation for its own sake. It would I suspect result in increased costs for the consumer, but with no efficiencies to be gained.

    We need to look no further than the Bradford electricity “market reforms” of last decade to see how misguided “competition” and resource management efforts can produce significant cost increases but without economic value. Even taking a market purist view of competition being good, there is little true competition in the electricity supply chain. Neither would there be in water. The core infrastructure is not replicable or able to be substituted. Which is a very good reason for it to be publicly owned.

    So let’s debate the policy alternatives by all means – but we need to do so on merits against outcomes, and drop simple economic rationalist oneliners regarding competition and resource management.

  68. randal 68
    17 November 2008 at 5:26 pm

    the funny thing is all the tories are still whingeing!
    they dont sound like winners to me!
    haw haw haw
    where’s dat bag of oats?

    ‘ eshpeshallyy for haitchapostrophesibilant’s

  69. Felix 69
    17 November 2008 at 5:56 pm

    insider.

    The rip off occurred long before Cullen bought back the railways.

    The relevant question is whether they should have been privatised. The decision to do so cost us billions to make profits for toll.

    (as you pointed out)

  70. Chris G 70
    17 November 2008 at 11:32 pm

    Wow,

    Scrap the RMA and privatise water.

    I think Ill leave the country much sooner after graduating.

    But johnny friendly thought Id stay cos of his friendly tax cuts?

    Sometimes, johnny, people care about things Other than money.

  71. travellerev 71
    18 November 2008 at 8:14 am

    Ok, as I stated John Key would open up this country to his banking parasite mates.

    I didn’t think he would do it so soon and so openly and even though he does not make the deals himself it is clear that his policies are about the banksters and what they can get their hands on never the less.

    Rodney Hide gets to do JK’s dirty work for now but mark my words; everything being sold off will be sold off to his parasitical banking mates.

    Have a read: Why Big Banks May Be Trying to Buy up Your Public Water System

    And be afraid, be very afraid.

  72. Bill 72
    18 November 2008 at 8:46 am

    Good link Trav.

    If there is a drive to privatise water here, my hope is that there will be a tsunami of opposition. The first time the privatisation bandwaggon rolled out, people were caught unawares and didn’t fully comprehend the consequences. That is no longer the case.

    ‘Everyone’ knows that privatisation leads to poorer service, rundown infrastructure and more personal expense.

    What’s that saying? Fool me once, shame on you. Fool me twice, shame on me.

    BTW. Anyone know the status of the Water Pressure Group? Their web page was last updated in 2002. I’m thinking there might be a lot of useful info there regardless and perhaps an organisational blueprint that can quickly be adopted by others if the need arises.

  73. higherstandard 73
    18 November 2008 at 8:56 am

    Bill

    “‘Everyone’ knows that privatisation leads to poorer service, rundown infrastructure and more personal expense.”

    Rubbish it is dependent on what is being privatised, how many players are in the market and the rules and regulations that surround any privatisation that comment is as non sensical as someone saying that

    ,, nationalisation leads to poorer service, rundown infrastructure and more personal expense.”

    It’s more of the right/left ideology of one system fits all circumstances which is fundamentally flawed.

  74. travellerev 74
    18 November 2008 at 9:02 am

    Hi Bill,

    I happen to speak with Penny Bright of the “Water Pressure groups just a day before the election on an entirely different action. She is suing JK for his lying about the amount of transrail shares he possessed.

    She’s a tough old bird and ready for action. 😀

  75. travellerev 75
    18 November 2008 at 9:04 am

    HS,

    Do yourself a favour and read the link about Banks buying water systems with their worthless inflated digital junk. The moment we have signed the contracts that system will collapse. And they’ll old the deed to our water.

  76. Bill 76
    18 November 2008 at 9:22 am

    HS
    Would you care to give examples of public ownership becoming privatised that has not resulted in the said privatised entity being bought back again because it was run into the ground?

    I don’t want examples where it may not have happened yet, but examples showing that private ownership of previously public assets can categorically be said to not lead to a buy back (partial or full), or a public financed bailout.

    Water, rail, electricity, banks, car manufacturing, air lines……these would all be counter examples.

    “It’s more of the right/left ideology of one system fits all circumstances which is fundamentally flawed”

    Fundamentally flawed ’cause the market and capitalism are fundamentally flawed? I agree if that is what you are implying.

  77. travellerev 77
    18 November 2008 at 9:33 am

    Ooh oops wrong thread, my apologies.

  78. Billy 78
    18 November 2008 at 9:39 am

    That means that thousands of Kiwi’s will read me calling him a liar.

    But Ev, no-one reads your blog.

    If he’s innocent of lying about his relationship with Andrew Krieger at some stage perhaps he will call me on that.

    What a remarkable lack of self insight, Ev, to think that the Prime Minister has nothing better to do than address your delusional fantasies expressed through your barely-read blog.

  79. gingercrush 79
    18 November 2008 at 9:41 am

    EV has a sense of self-importance that is bordering on hysterical.

  80. higherstandard 80
    18 November 2008 at 10:20 am

    Bill

    British, French and NZ Telecom, British steel, Volkswagen, British Gas, Auckland International Airport etc etc etc.

    There have been notable failures as well hence my point that sometimes privatisation is appropriate and sometimes it isn’t and that we need to look at these issues on a case by case and sector by sector basis.

    AS an aside I’m not in favour of privatisation of water services in NZ until I hear a compelling argument to convince me it would be a good thing to do.

  81. insider 81
    18 November 2008 at 10:27 am

    Bill

    Firstly – Telecom, Works Infrastructure, GSB, Contact, Petrocorp, Wellington Airport, Auckland airport, Capital Properties, Trustpower, POSB, Health Computing Service, NZ Shipping Corporation, Rural Bank, National Film Unit, NZ forests, State Insurance, Tourist Hotel Corp, NZ Liquid Fuel Corporation, Export Guarantee Ltd, Government Printing Office, Housing Corp Mortgage, Government Computer Services, commercial operations of RNZ – If you are like me you probably have forgotten the govt even owned half of them and wonder why it ever did.

    Secondly – None of the businesses bailed out by govt had to be. THey were political decisions taken for a range of reasons. Plenty of other businesses go to the wall without the world coming to an end.

  82. Bill 82
    18 November 2008 at 10:47 am

    HS and insider.

    Your examples are all individual company examples rather than broader industry ones. As such they don’t do much to advance an argument for private ownership. The industries they are examples of have been industries privatised to be later bailed or brought back under public ownership. (Steel, telecommunications, automobile industry…)

    That was why I gave a list of counter examples by industry rather than individual companies. Point me to an industry ’cause an individual company is not a categorical example of private takeover of public assets being a successful strategy.

    Maybe there is a reason that publicly owned assets never absolutely need to be taken over by private enterprise, that the takeover is driven by profit motives only and accompanied by a lot of politicking?

  83. higherstandard 83
    18 November 2008 at 11:00 am

    Bill you were given what you asked for

    “HS
    Would you care to give examples of public ownership becoming privatised that has not resulted in the said privatised entity being bought back again because it was run into the ground?”

    But if you want to potter off down another track to try and justify why private ownership is always bad when two of us have provided multiple examples to show that is demonstrably not the case feel free.

  84. insider 84
    18 November 2008 at 11:04 am

    But Bill you are setting impossible conditions with false propositions, and you are conflating global and national issues.

    You label whole industries as having had to be brought back under public control, yet they haven’t. Neither the NZ nor the global steel industry is, nor is the auto industry, or telecommunications, to quote your examples. Many of those industries were never state owned in the first place, or if they were it was because there was no diversity in the industry, eg NZ steel. But there are plenty of examples of whole industries running quite nicely without any state participation and where we would say it was absurd for the state to play a role.

  85. TimeWarp 85
    18 November 2008 at 11:32 am

    Bill’s point is valid, even if it could be better articulated.

    A key driver of competitive advantage in any particular infrastructure market is – can that Infrastructure be readily replicated, or substituted? If not, the infrastructure owner has a strong competitve – even monopolistic – position in that particular market.

    If you take Telecom as one example, while some core infrastructure (the local loop) can not be easily replicated, it is easily substituted. There are probably a number of factors why Telecom has not continued to be a cashcow for overseas investors to suck money, that came from Kiwi pockets, out of the economy. One major factor however is the competition that Telecom faces from substitution technologies such as mobile, internet and VOIP.

    None of your references (apart from Telecom historically) are to monopolistic positioned companies, being that there were either existing competitors or no high barriers to competitor entry. (The only example that comes close are the airports, where there is vigorous competition although not exactly in the same (geographical) market. You could have similarly mentioned ports – although as we have seen with Auckland vs Tauranga, despite some monopolistic position geographically there is none the less intense competition.)

    This is not the case for infrastructure such as electricity and water. It simply is not possible for competitors to replicate the lines or pipe infrastructure and get economic gains. (Something I wish Key would think of as he plans to replace all Telecom’s copper with a government-funded network). Nor are there technologies that allow substitution for the traditional delivery mechanism for water or electricity to the premises.

    See my comments above HS and Insider – get off the privitisation bandwagon touting generic slogans, and discuss what specific problems you would expect to fix, and specific outcomes to produce, in a specific market, by a privitisation programme. Specifically you might want to offer some comprehensive arguments on the actual thread topic supporting privitisation of domestic water supply – if you have any.

    And please don’t come back with simplistic statements of “competition is good” (there will be none) or “it will be more efficient” (without competition, why should it be?)

  86. higherstandard 86
    18 November 2008 at 11:41 am

    Timewarp

    You twat – I am not on the privatisation bandwagon shouting slogans.

    I stated the following……..

    Bill said

    “‘Everyone’ knows that privatisation leads to poorer service, rundown infrastructure and more personal expense.’

    I said

    “Rubbish it is dependent on what is being privatised, how many players are in the market and the rules and regulations that surround any privatisation that comment is as non sensical as someone saying that

    ,, nationalisation leads to poorer service, rundown infrastructure and more personal expense.

    It’s more of the right/left ideology of one system fits all circumstances which is fundamentally flawed.”

    And followed that by

    “As an aside I’m not in favour of privatisation of water services in NZ until I hear a compelling argument to convince me it would be a good thing to do.”

  87. TimeWarp 87
    18 November 2008 at 11:51 am

    Fair enough. Apologies for the broad collective response, and for the confusion arising from your support of privitisation within a thread on water supply.

  88. insider 88
    18 November 2008 at 11:58 am

    Time Warp

    Pretty much what HS said. one extra though

    “This is not the case for infrastructure such as electricity and water. It simply is not possible for competitors to replicate the lines or pipe infrastructure and get economic gains.”

    Not completely true. Telecommunications in NZ is replete with examples of parallel infrastructure. That probably reflects the (former?) huge margins on telecomms and growth potential as opposed to electricity.

  89. higherstandard 89
    18 November 2008 at 12:58 pm

    No problem TW apologies for calling you a twat.

  90. TimeWarp 90
    18 November 2008 at 5:20 pm

    Insider, now I think you have misread me.

    Telecomms does have parallel infrastructure, agreed. Hence my points about substitution, and that it is a market that benefits from competition.

    It didn’t at initial privitisation, therefore my comments about profits going overseas at the expense of Kiwis. Back then Telco margins were huge, now on core services they are not (eg read the media comments on Kordia’s recent results being dragged down by it’s acquistion of Orcon).

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