Spinbusting: Nats’ borrowing not for tax cuts

Written By: - Date published: 10:58 am, August 2nd, 2008 - 74 comments
Categories: national, spin, tax - Tags:

Today, Bill English is outlining National’s plan to undo the work of the past fifteen years and take this country further into debt.

He will argue that National would not be borrowing for its programme of tax cuts for the wealthy, rather it would borrow for investment. That is a lie.

We already borrow for investment but only enough so that our debt stays at roughly the same level of GDP (18-20%). National will be looking at increasing those debt levels to 25% of GDP+. That will cost about a billion a year in interest payments.

English will say the borrowed money would go on health or education or roads, not tax cuts but think about it – they are planning tax cuts for the wealthy, because of these cuts, they won’t have enough money to fund the spending, so they would have to borrow. No big tax cuts, no need to borrow – the borrowing is to fund the tax cuts.

National won’t tell you that because, as John Armstong says: “Right now, getting back into power is all that matters to the party. To ensure victory it will do – to quote one of Key’s pet sayings – whatever it takes”

74 comments on “Spinbusting: Nats’ borrowing not for tax cuts”

  1. sean 1

    What the hell is the “tax cuts for the wealthy” line? Its tax cuts for those who actually are earning in the first place.

    You simply can’t resist putting your little spin on every blog you do can you?

    If you were more objective in your writing you might actually have a bit more credibility – sadly, you just end up looking crazed and turning people even further away from Labour.

  2. Steve 2

    Sean, Bill English made clear on Agenda (May 18) that National would like to focus on those in top income tax bracket that have suffered from bracket creep. Given that only 15% of the taxpaying population, earns more than $60,000 the line tax cuts for the wealthy is not spin, it is fact. 85% of the taxpaying population earn less than $60,000 are you saying that they are also not entitled to tax cuts? Cutting taxes at the lower end of the scale benefits far more people than cutting at the top, even if the top is not that high..

  3. gobsmacked 3

    From John Armstrong’s piece:

    It is not more of National’s “me-too” cuddling up to Labour’s policies. It is a case of being more Labour than Labour.

    The righties: “Debt is good!”

    The lefties: “Winston’s OK!”

    World, mad.

  4. Draco TB 4

    What a surprise – National lying through their teeth.

    In other spin news, this from 08wire is hilarious.

  5. RedLogix 5

    Its tax cuts for those who actually are earning in the first place.

    If it really is all your money, and all tax is theft… then why the hell are you still living here in New Zealand?

    Note that once again Key is announcing ‘a program of tax cuts’ with absolutely NO detail and NO attempt to outline the size and structure of them, and aboslutely NO attempt to state by how much they will reduce govt income by, and by what means he intends to continue to balance the govt books.

    He has only the following three options:

    1. Reduce, privatise or sell of State assets or entities.

    2. Increase direct or indirect Crown debet.

    3. Loot Cullen’s Superannuation Fund.

    He has verbally stated that he will NOT do option 1 or 2.

    Last night on RNZ Brent Edwards gave Key 25 uninterrupted minutes, in a pathetic soft-cock interview where he just fed Key one patsy question after another, and then let Key waffle on as long as he felt like. But at the end of it, Key has said NOTHING. Oh we had 25 minutes of CrosbyTextor feel-good lines, but at no point did Key actually say ANYTHING about what he thinks National will actually do in power.

    I’ve heard this kind of bullshit from senior corporate directors before. It has the same brain numbing effect after a while; the carefully crafted words are going into the ears… but the brain is screaming… “I cannot make sense of this, what does it mean?”.

    Only afterwards you find that it really means that you are being screwed. Even Rodney Hide knows that Key is lying. Everyone who understands the numbers knows that Key is lying.

    He cannot make significant tax cuts, maintain his spending commitments AND not increase govt borrowing.

    The man is a blatant lying swindler. (But he does have a nice smile.)

  6. ak 6

    That nice man has been promising us an extra bag of lollies a week for years.

    But now he’s had to admit that we’ll be in hock to foreign money-lenders to get them.

    Ooo err… sounds like the old message about accepting lollies from strangers is about to hit home…

    Never get in a polling booth with someone you don’t know.

  7. randal 7

    its just a game…the rich get it and the banks take it off them!!!

  8. Anita 8

    RL

    He has only the following three options:

    1. Reduce, privatise or sell of State assets or entities.

    2. Increase direct or indirect Crown debet.

    3. Loot Cullen’s Superannuation Fund.

    4. Cut government provided services.

    5. Cut the government subsidy used to provide access to services.

    6. Reduce welfare payments.

    I am expecting to see both 4 and 5. Plus 6 through holding back increases, cutting supplementary assistance and forcing people off welfare.

  9. RedLogix 9

    Anita,

    Duh.. guilty of sloppy thinking.

    The thing that gets me is that in all likelihood National really have no detailed plan.

    All they really intend to do is cut or freeze budgets and leave it to the public service to cope with the consequences.

    And if they resist, then a few strategic ‘restructurings’ will ensure compliance.

  10. monkey-boy 10

    But surely, with the burden of governing, there are always going to be winners and losers aren’t there? That is just an acceptable risk isn’t it?
    I say that because the Government cannot legislate to eliminate risk. And even if we could, we wouldn’t, because without it we would have no entrepreneurship, no investment, no innovation and no growth to ignite our transformational ambitions for New Zealand.
    Just testing….

  11. mike 11

    Great plan to gazump Labours long over due Tax cuts.

    As far as bribes go Steve, Labour have had the mortgage on these for the past elections and I can’t wait to see who they will target this year.

    My pick is the unemployed as its the only group that aren’t totally sick of Labour yet and it’s definitely a growing audience.

  12. monkey-boy 12

    A one-off payment of a thousand dollars for everyone has been suggested…

  13. RedLogix 13

    Mike,

    Where exactly do YOU think Key will be getting the money to pay for his tax cuts from?

    Or are you peddling Key’s lie as well?

  14. Kevyn 14

    “English will say the borrowed money would go on health or education or roads…”

    Roads? Governments don’t spend money on roads unless they are opening up Crown lands for settlement. IMHO privatising National Parks is guaranteed election losing strategy.

    Or is Steve simply proving that he doesn’t know the difference between a Government Department and a Crown Entity. One is funded from taxation the other from user fees. One is run by the Minister the other by an “independent” board appointed by Cabinet and subject to a performance agreement with the shareholding or “responsible” minister.

    If the Land Transport Agency wants to borrow money so it can replace the road toll with toll roads it should be able to so just like every other independent agency such as ARTA or Solid Energy.

  15. RedLogix 15

    Kevyn,

    So you think that we cannot tell the difference between direct Govt debt, and indirect debt or liabilities piled up by Crown entities?

    For instance a Public/Private Partnership in which the private party borrows the money, but passes the interest costs onto the public… and a liability in the form of residual debt or deferred maintenance in 20 years time?

  16. RedLogix 16

    The highlight of the day is expected to be an address from deputy leader and finance spokesman Bill English who is expected to announce a more relaxed approach by National to running deficits – even bigger deficits than Labour – during the current economic downturn in an attempt to boost the economy.

    It is also seen as an attempt to neutralise Labour’s expected claims that tax cuts will force cuts to public spending.

    Mr Key said the party’s tax cut programme would not require the Crown to borrow in order to fund them.

    http://www.stuff.co.nz/4641196a6160.html

    Unfunded Govt deficits = Reserve Bank printing money??

    I’m also baffled by the reference to – even bigger deficits than Labour – … this from a media for the last five years or so has lambasted Dr Cullen for running a surplus?

    And can anyone spot the exact similarity to the Bush regime’s economic plan… cut taxes for the wealthy and run massive deficts?

  17. Oh yes , the Bush and National link , sooooooooooooooooooo ho hum boring, play it again Miss Simpson !

  18. rave 18

    $1000 bucks each. Enough to get pissed for Xmas and wake up in the New Year with a sore head. I always thought that for rigthies their ntellect is located in their hip pocket which is always on a countdown to the next organism.

  19. fiona 19

    I hope this is not a dumb question, but what are the economic implications of increasing government debt in the way suggested by English?

    And how can this be communicated to voters?

  20. Quoth the Raven 20

    My pick is the unemployed as its the only group that aren’t totally sick of Labour yet and it’s definitely a growing audience

    You know very well that unemployment has decreased significantly under this labour government. When National were last in government in 1999 there were 161,128 people on unemployment benefit. In May this year there were 17,465 and this government hasn’t increased hte unemployment benefit since National’s slashing in the nineties, which many righties disingenuously criticise here. Mike do you really think they’re that bigger voting block? Please Mike use your brain before you spout your repetitive right wing lies here.

  21. randal 21

    the implications are this. interests rates are still high and his version will increase inflation (robbing the old) while they enrich themselves with their spreadheeteyes till the beast is gutted and they are in England with castles and lots of money. there. hows that?

  22. fiona 22

    Hmmmmm, could be interesting communicating that to the electorate.

  23. Felix 23

    Best way would be a televised debate between randal and d4j. That’ll get the messages out.

  24. pinetree 24

    Steve – do you have any numbers to hand (post budget 2008, or presumably covered in there) that project debt (as % against GDP, Net, Gross Sovereign, whichever is the best measure etc) for the period covering Labour’s stated tax cut plan?

    ….up, down or neutral?

  25. Matthew Pilott 25

    Fiona, the most simple way to phrase it is that borrowing is more expensive than saving for something or funding it through income. Sometimes you have to do it, other times it is irresponsible. If they’re doing it for a dumb reason, as mike breathlessly intones, then they’re going to impose a needless cost on New Zealand.

    If they give tax cuts, and then borrow for omething else, or arrange a PPP, we lose, be it by tolls, interest payments, or as RedLogix suggests, deferred maintenance by the privte entity so we get a whopping great bill in a few years time.

    Ostensibly, National think that an extra block of cheese now is worth the whole grocery bill later – it be interesting to see how they frame it. Why will we be more likely to afford higher taxes in the future? Are the current econimoc pressures likely to be lesser in 10 years time, in 20? I think not – impossible to say for sure, but it’s not worth the gamble.

  26. gobsmacked 26

    Sir Roger Douglas must be turning in his grave.

  27. Draco TB 27

    what are the economic implications of increasing government debt in the way suggested by English?

    in simple terms: Short term will see a slight, probably negligible, increase in living standards that will be wiped out by in six months by inflation. Long term will see a decrease in living standards as the extra costs that we have to pay (interest payments, inflation, decreasing value of the dollar) bite in.

    Sir Roger Douglas must be turning in his grave.

    I just wish he’d stayed in his grave.

  28. fiona 28

    Is this worrying for Labour? NZers have a record of selling their kids’ futures down the tubes eg getting rid of the Kirk super fund, no universal student allowance and high tertiary fees, and the f**k the environment attitude of so many

  29. Rob 29

    Great idea by English and Key to do this and the more that Cullen whinges the worse it makes him look for taking so long to give tax cuts.

    Especially when he was advised in 2005 by treasury to give them he called this and ideological burp. His tax cut was given this year only because Labour is so far behind in the polls and it made much more sense to give it when he was running surpluses of 8 to 9 billion.

    I’m sure crosby textor will come up with some great ideas next week. Helen still has to contend with the on going Winston saga which isn’t going away.

  30. Draco TB 30

    Is this worrying for Labour?

    Can’t answer for Labour but it is certainly a worry for those of us that realise that National are promising to sell us short. National are thinking and planning short term and will only about a negligible, very short term, gain offset by generations of decreasing living standards. Hell, we’re still paying for the Nationals’ financial mismanagement from the 1970s and they’re not showing any indications that they’ve got any better.

    I do hope that Labour and the other left wing parties are worrying about it and are going to spell it out, in no uncertain terms, to the populace.

  31. Draco TB 31

    http://www.scoop.co.nz/stories/PA0808/S00012.htm

    “John Key would borrow for tax cuts if elected, and he would pass the bill to our children. That’s just crazy.’

  32. RedLogix 32

    The extraordinary thing is that Key has been telling every interviwer I heard this last few weeks “That National will NOT be borrowing to pay for tax cuts”.

    He could not have been more clear.

    And now at their conference Bill English is saying that they will.

    Someone is lying.

    (And I wonder if any of those bold media types who Key lied to will bother to pick him up on it.)

    This is not a little lie. It is a big one concerning billions of dollars of taxpayers money. It also calls into question Key’s credibility concerning all the other verbal commitments he has been making the last month or two.

    The man is a lying swindler. (But he does have a nice smile.)

  33. Kevyn 33

    RedLogix,

    No, I merely asked whether Steve knew the dirrerence between a “the Government” and a stautorily independent body.

    But since Labour’s reintroduction of borrowing powers for the highway agency also reinstated the limition of that borrowing power to borrowing from the government it is probably a moot point, in relation to Steve’s original post.

  34. Kevyn 34

    Matthew, Borrowing isn’t inherently more expensive than saving for something or funding it through income. Especially for infrastructure that requires a lot of urban land such as rail yards and sewerage ponds. Since the future is unpredictable any decision of whether to borrow, save, or pay-go is going to have to be judged by future generations with the benefit of hindsight. Was Vogel right to borrow astronomical sums to build the railways? Or should he have waited to find out what impact steam would have on coastal shipping?

    With public infrastructure there is also the question of intergenerational equity. Should today’s rates or taxes or road user charges pay to build the things that will only be enjoyed by tomorrow’s ratepayers, taxpayers or road users?

  35. Swampy 35

    “Bill English is outlining National’s plan to undo the work of the past fifteen years and take this country further into debt.”

    Which part of the last fifteen years do you acknowledge was worthwhile, then? All of it? Some of it? Or as well known Lefty politician Jim Anderton would have it, none?

  36. Swampy 36

    “Right now, getting back into power is all that matters to the party. To ensure victory it will do – to quote one of Key’s pet sayings – whatever it takes’.

    John Armstrong actually first heard this phrase, as we all did, when reading Matthew Hooton’s column earlier this year about the Labour Party’s campaign tactics. I think Armstrong has mixed up his parties.

  37. Swampy 37

    $60,000 is not wealthy, people in that bracket receive WFF under Labour’s current criteria.

    [lprent: you know that is incorrect swampy. Say after me – families with children… You’re starting to get as bad as Rob about accuracy. ]

  38. Swampy 38

    Whoops – Crosby/Textor Alert! Now the Exclusive Brethren have been displaced as chief bogeymen by Crosby/Textor!

    Now, in the real world today, the National Party held a conference…

    [lprent: Swampy – you are starting to look like a troll to me. Standard phrases randomly selected, not interacting with other commentators, and dumping large numbers of comments in a short period. In particular I’m noticing that other commentators (apart from other trolls) aren’t bothering to discuss your comments. Be warned that I’m starting to watch you – lift your standard. ]

  39. Swampy 39

    “All they really intend to do is cut or freeze budgets and leave it to the public service to cope with the consequences.”

    The public service is a bloated bureacracy that is tasked with significant political imperatives by the government intended first and foremost to make government bigger and the private sector smaller.

    There is no need for such bureacratic growth where the private sector already has the capacity to provide services, where the matter of the government wanting to dominate or monopolise provision is more about ideological than practical considerations.

    An obvious and recent example is the renationalisation of railways with the big-dollar spending announcements, all of which create the clear impression that the government is prepared to run the rail service at a loss in order to squeeze out private sector competition, such policy may buy the votes of the rail union members but is very expensive in public funding terms.

  40. Draco TB 40

    Borrowing isn’t inherently more expensive than saving for something or funding it through income.

    Wow, what planet are you living on?
    I want access to 0% interest loans as well.

  41. Swampy 41

    “Fiona, the most simple way to phrase it is that borrowing is more expensive than saving for something or funding it through income. Sometimes you have to do it, other times it is irresponsible. If they’re doing it for a dumb reason, as mike breathlessly intones, then they’re going to impose a needless cost on New Zealand.”

    That’s like when Labour takes a billion dollars out of Meridian Energy to fund election campaign promises, we all pay through higher electricity prices.

  42. ak 42

    Kevyn: Matthew, Borrowing isn’t inherently more expensive than saving for something or funding it through income

    Oh yeah…. Noooiiiiiccccce, Kevvy – Tory spin attempt of the century, I’d say. Try selling that to every kiwi parent (oh that’s right – your masters Flipper and Billy-Bob actually are!!)

    Ya gotta laff! – the prudent, responsible, big-money “party of business” now trying to convince us that loan sharks are our friends!

    Pathetic. And yet so inevitable – painted into a corner after proffering the most blatant and unprecedented electoral “tax cut” vote-bribe in history back in 2005.

    But what do I know? – hey, put your grandkids in hock, people – our $50mill Golden Flip-flipping Money Trader says it’s all good (golly – I wonder why his nicknames are “smiling assassin” and “smiling snake” and that his favourite saying is “whatever it takes”?)

  43. max 43

    I dont know why you bother swampy, this place is full of no hoping commies.

    [lprent: always intriguing to find people repeating myths of the past so religiously.]

  44. monkey boy 44

    I think it’s all academic. As far as i can see, the electorate does not give a flying one about ‘borrowing’ to finance tax-cuts. The reason for this is in part due to Michael Cullen’s fiscal management, which in part endorsed the idea that regardless of the amount of surplus he was sitting on, he wouldn’t do tax-cuts. He cited the dangers of inflation, asserted they were merely bribes, he told us ‘the advice’ was against it. Yes, and made a decent fist of appearing to at least, even if you disagreed with him, hold an ethical stance.
    But then he flip-flopped. Suddenly, it appeared he’d been giving tax cuts all the time, with WfF!, Magically, it appeard ‘the advice’ had been a mistake! In one fell swoop, all that stuff about ‘bribing’ the voters was ignored, and Cullen started to endorse National’s philosophy. It was like a latter chapter of Animal Farm, starring Michael Cullen as Napoleon’s chief apologist, Squealer!
    It achieved three things: first the voters saw through his earlier high-sounding pronouncements. Secondly, in the pre-election mexican stand-off, Labour blinked first, so admitting their policy was faulty. Thirdly, it impressed upon the electorate that when it comes to the dollar in their pocket, they’d rather have it now, thanks, and fuck all the high-sounding theory about economics.
    The net result is, to my mind, that people do not care about the arguments, they simply want to feel some certaintly that they can pay their bills. If it means ‘borrowing’ and ‘deficit’ they’ll accept that risk. After all, what did they get for the surplus? Settlements under Wiatangi, and a clapped out train set?
    Nice.

  45. Kevyn 45

    Draco, I’m living on the planet where inherently means “Permanently existing in something; inseparably attached or connected; naturally pertaining to; innate; inalienable”. (Dictionary.com)

    I want access to 0% inflation. But that ain’t gonna happen either.

    Ak wasn’t too wide of the mark. Capitalism was founded on the belief that new technology can produce more than enough profit to pay the interest on borrowed capital.

    Vogel seems to have had a similar belief: borrowing to build the railways would increase economic growth more than enough to pay the interest on the loans. Keynes made a similar argument but, in essence, Vogel was following property developer logic.

    The fact of the matter is that sometimes the cost of putting things off is bigger than the cost of borrowing to do it now. That’s something our forefathers understood and why we had almost a century of public works loans driving economic growth. Perhaps the post-WWII emphasis on home ownership and developing marginal farmlands was too big a deviation from that original borrowing philosophy and became the albatros around the neck of the economy in the 70s. Maybe redlogix has the right data at hand to check that out.

    It’s whats been built on top of capitalisms foundation stops me from being a righty. Nobody who understands the Theory of the Perfect Free Market could ever agree with the Business Rountable or the rogergnomes. Although I would opt for genuine anarchy over statism any day of the week that’s not the same as advocating laissez-faire capatalism.

  46. monkey boy 46

    ps i should have spelled that ‘Waitangi’
    Aroha mai.

  47. RedLogix 47

    MonkeyBoy,

    Your last post is based on a complete misunderstanding.

    Dr Cullen is a Keynesian. (I’ve heard his say so with my own ears.)

    Maynard Keynes basic idea was that govt should try and act to moderate the normal capitalist business cycle by acting countercyclically. In other words when the business cycle was booming, the govt should keep taxes high and reduce govt debt. In fact if you take the SuperFund and various other instruments into account, the NZ Govt is for the first time in living history a nett creditor.

    And when the business cycle inevitably turns the govt then moderates this by prudently cutting cutting taxes and running down govt reserves. Cullen’s recent tax cuts where just large enough to allow the govt to run a balanced book. Any more creates deficits.

    The problem is “how far”. In the modern political idiom tax cuts are very hard to reverse. If your tax cut is so large that it puts govt into a structural deficit, then you are committing that govt to an ever increasing debt.

    The problem with debt is two fold.

    1. Eventually you have to pay it back. And you have to pay interest on top of it. A 20 year loan of $1 billion at say 5% interest, eventually costs something in the order of $3.65 billion by the time it is fully cleared. At some point you HAVE to increase taxes again in order to repay the debt.

    2. NZ private sector debt is already FAR too high. We already pay a premium interest rate because of that. If the market perceives that the public sector is also increasing it’s debt position, then interest rates will increase even further.

    Paying extra interest on more public sector debt is bad enough, but the enormous multiplier effect on our existing private sector debt will be crippling.

  48. vto 48

    by your same reasoning labour borrows for tax cuts too so wtf are you on about?

  49. RedLogix 49

    vto,

    Cullen’s recent tax cuts where just large enough to allow the govt to run a balanced book. Any more creates deficits.

    I know you can read, because you seem to be able to write.

    Notice carefully that Key and English are telling you ‘tax cuts’, but NOTHING about the numbers or how they will work.

    Money is all about numbers. When you get a spam email telling you that you can free money ‘earning tens of thousands’ working from home, but they do not tell you any actual numbers or how those numbers are actually acheived, you know that it is a scam. Someone talking money, but not telling you hard numbers is trying to scam you.

    Key is scamming you. (But he has a nice smile.)

  50. Felix 50

    When does he show this “nice smile” everyone talks about? I’ve never seen it.

  51. Disengaged 51

    When did Michael Cullen announce that he was going to stop borrowing? I must have missed that. Otherwise isn’t he borrowing for his tax cuts?

    Prudent use of borrowed funds is a good strategy. Particularly if it means that you can leverage the benefits of having the assets sooner to greater effect that the cost of the borrowing.

  52. RedLogix 52

    Disengaged,

    Particularly if it means that you can leverage the benefits of having the assets sooner to greater effect that the cost of the borrowing.

    But most public sector infrastructure projects do not directly return cash flow to the Crown. At some point the borrowed money PLUS interest has to be recouped by increased taxes. The basic problem with debt fuelled growth is that much like any drug habit, debt is very easy to get into, much harder to get out of. New Zealand has just spent 15 years getting itself out of the debt hangover created in the 70’s and 80’s.

    This is why Cullen has kept taxes high and been reducing core Crown debt dramatically. It is obvious that no govt could reduce debt to zero overnight, but a programming of REDUCING debt was and has been achievable.

    From memory I think that at present the core debt sits around 18% of Crown income. Counterbalancing that are the various SuperFund investments. As I stated above, the govt is currently earning more from investments than it is paying in interest. This is a good thing. If we pursued this strategy long enough, and govt was earning sufficient funds from investments, and indeed in the long run it could genuinely reduce taxes (or improve services) in an entirely sustainable manner.

    Because the economic cycle has turned, the correct thing for any Keynesian Finance Minister to do, was to stop reducing debt, reduce taxes and/or increase infrastructure spending. Which is exactly what Cullen has done while still allowing the Crown to run a balanced book.

    On top of that Cullen has decided to allow a ONE off increase in core debt to about 20% in order to fund existing infrastructure.

    But Key and English have signalled substantial tax cuts that will mean the Crown is running substantial deficits every year, forcing the Crown to INCREASE debt every year.

    In a global environment where credit is already exceedingly expensive to obtain, this is an insanely reckless strategy. Of course John Key knows this perfectly well… and it begs the question who Key’s real masters are, and just for whom he is really so very ambitious.

  53. Felix 53

    RL, that’s all very well but you’re talking about stuff that won’t even affect us for a couple of years – try to stay in the moment dude!

    When Johnny Keys gets in we’ll all be richer than astronauts like him and none of that fancy schmancy number juggling will matter.

  54. rave 54

    Yeah monkey boy a few dollars now and who cares about the future. Its called a world view.
    As Redlogix points out debt has got to be paid back.
    Who pay’s it back?
    As usual the poor bastards pay it back, this is how the capitalists run the system. They privatise the profits, and socialise the losses.
    So we’ll get a few bucks for Xmas but slave away for the rest of our lives to pay for it 1000 fold in road tolls, rising prices, weaker unions that cannot recover real wages, eroded social services, ACC blah blah.
    The righties are happy because they will cream off part of the wealth in their small businesses kidding themselves they are the No 8 kiwi entreprenuers. They’ll wake up like most small businesses when they get trampled by giant Aussie or Chinese competitors, they won’t know what hit them. Even then, as they get scrambled by the bosses they be looking to blame the unions.

  55. gobsmacked 55

    In the lead-up to the election, the National Party leader makes clear his view on dicing with debt:

    “I think most people feel that reducing public sector debt was a good thing to have done. I think we’ve made, over the last 10 or 15 years, very substantial progress in that.”

    (interview, NZ Herald, July 2005)

    Don Brash RIP.

  56. Matthew Pilott 56

    Kevyn, there are plenty of arguments for borrowing, but you have missed the point entirely.

    If you don’t have to borrow in the first place, you will be better off. No ifs, buts or maybes.

    It is inherently more expensive to borrow and pay for something when the alternative is to fund it up front.

  57. Kevyn 57

    The home ownership debate is entirely about the ifs, buts and maybes. It is all about the costs and benefits for that specific decision. Your last sentnce pretty much say it all. If you can afford to pay cash it is inherently more expensive to borrow. But when you can’t afford to fund it from cash reserves then you have to do the cost/benefit analysis. I think that is the tone of the criticisms for Key’s announcement – that there is a promise with no numbers attached.

    I am not advocating that we launch another Vogel scheme. He had interest rates well below 5% and population and economic growth well above 5%. In fact they were originally called Immigration and Public Works Loans because the loans would pay for the infrastructure needed to attract immigrants, the growth in population would provide increased tax revenues and income from Crown Land sales and that would pay off the loans plus interest. But it was the low interest rates and high growth rates that made that a low risk strategy 150 years ago. Later public works loans for infrastructure were secured against revenue from user fees but guaranteed by general tax revenue. Crucially, they were not funding tax cuts except insofar as current taxes didn’t have to be increased to allow the infrastructure to be funded from cash flow.

    Maintenance and operations should always be funded from cash flow as there is generally a direct relationship between the two in term of usage. It can always be argued that construction should be funded substantially from borrowing if there the construction will result in either a saving in maintenance and operations costs or an increase in revenues greater than the costs of servicing the loans. The higher the interest rates the less likely it is that infrastructure investments will meet that last criterea.

  58. Kevyn 58

    RedLogix, I am intrigued by your comment “On top of that Cullen has decided to allow a ONE off increase in core debt to about 20% in order to fund existing infrastructure.”

    Which infrastructure is being funded this way? According to the ten-year NLTP forecasts it’s not roads or buses. Air New Zealand? Meridian? NZ Post?

    Or did Cullen borrow the money to buy Kiwirail?

    Or is it all of the above? 2% of GDP seems a lot of money, certainly more than the $700m paid to Toll.

  59. Disengaged 59

    RL: “But most public sector infrastructure projects do not directly return cash flow to the Crown. At some point the borrowed money PLUS interest has to be recouped by increased taxes.”

    The projects don’t have to directly return cash flow to the crown in order for them to be worthy of investment. IF they contribute to economic growth then the government will recoup the money through an increase in the tax base without a need to increase taxes (more profitable businesses pay more tax, more people on higher wages pay more tax etc).

  60. lprent 60

    Disengaged: Ok now prove it to me that that they provide a return to anyone, and don’t just rust.

    What you are describing is a risk. In this case the risk and costs are being passed forward into future generations. Why? If you want to take a risk, then pay for it now – don’t pass it to someone else to pay.

    The last time I heard that kind of rubbish being postulated was with “Think Big”. Looks like John Key admired Muldoon more than we realized? I wound up paying for those useless projects, now it looks like John Key wants to do the same for my kids.

    Bloody roads? What is the price of fuel likely to be in 15 years? Better putting investment into rail. The last time Think Big was justified on the basis of doing things that would have worked 20 years earlier. It looks like the Bat’s are now looking at doing the same with roads.

    Lets all advance boldly into the future, walking backwards with out eyes firmly on the past. Now I’m waiting for the SMP policy for sheep farmers? Perhaps the laying of fibre-optics to every home – now that is a stupid economic policy.

    Go and support National – help their debt accumulation for your kids.

  61. Disengaged 61

    For a start, Infrastructure is more than just roads. It also covers public transport, electricity, telecommunications and water. Investment in Telecommunications can make massive differences to an isolated economy like New Zealand.

    Secondly you can’t seriously be saying that infrastructure doesn’t do anything but rust? I credited you with more intelligence than that.

    What I am describing is spreading your risk, maximizing your return on investment and minimizing your opportunity costs. If the life of the asset you are investing in has a serviceable life of 20 years (how old are the current motorways, telecommunications networks or water and electricity networks?) or more what is wrong with borrowing against the future earnings (or economic benefits) to pay for it now? Sure the next generation will have to bear some of the cost, but they will also receive the majority of the benefit.

    Yes it involves some risk, foresight and bit of courage, but by amortising the costs over a greater number of years you are automatically reducing the risk. Also if it means that you can get the infrastructure in place 1,5,10 or whatever years earlier you also capture those additional benefits.

  62. lprent 62

    If the infrastructure you put in doesn’t get used, then that is exactly what happens. Look at things like Marsden B, most of the Think Big projects, etc.

    Additional benefits off roads over the long term? Don’t be stupid. The benefit from those will occur only over the next 10 years or so. After that we are likely to have rapidly rising fuel costs unless there is a significant theory breakthrough. All of the roads that I can see that need to be done are already, and the funds have been committed for those. They have almost entirely been funded from current road user charges – as they should be.

    The idea that putting fibre down the last last stretch to the household will produce economic benefits for the country is just stupid. If you don’t see where you can get benefits from it, then why do it. I can’t see anything worth doing it for, and I’ve been around IT and telecomms for a long time.

    Putting in additional cable to offshore would be more useful. We’re a bit over dependent on too few high-volume cables at present. But that is already being taken care of.

    “bit of courage” – now you do sound like Muldoon. A reckless foolhardiness worthy of Muldoon seems to characterise what I’ve seen the Nat’s committing themselves to this weekend.

    But of course it is all ok – pass the cost onto the children, along with the costs for national superannuation policy that some idiot put in, plus Think Big, plus SMP’s, etc.

    John Key – the new Muldoon

  63. Kevyn 63

    Iprent, Pause for a moment to ponder your advice to Vogel – “If you want to take a risk, then pay for it now – don’t pass it to someone else to pay.”

    If he’d respected your concerns and followed your advice the railways would never have been built. By the time New Zealand could actually afford to build them from cash-flow the motor and it motor-spirits had provided a simpler and better way of achieving the same objective. In fact you have summed up the main opposition to the Immigration and Public Works Bill quite nicely, although the word “evil” made an appearance in the Parliamentary debate, to describe the practice of lumbering future generations with the burden of paying for this biggest of all think big (grandiose) projects.

    You are either being shorted sighted or narrow minded about the future of roads. Sure fuel prices are going to rise inexorably, whether through peak oil or peak greed, but the main impact will be to change the ratio of ownership costs to the point that fuel use will become as expensive as deppreciation, or even more expensive. As we approach that point car makers aren’t going to be able to deflect attention with slick advertising and they won’t even want to once buyers show a willingness to pay for serious fuel economy.

    So, in addition to the fuel saving tactics that people have already adopted, such as redefining their weekend retreat as a holiday home, car pooling, down-sizing, trip-chaining, we will also see an almost imperceptable shift in home buying to favour shorter commutes either to work or school or both, dramatic increases in new-car fuel efficiency and, most importantly for New Zealand, the Japanese home market supplying us with a greater choice of JUC micro-cars without the supply/demand effect that is currently making those cars rather expensive.

    There are three demographic factors that further complicate future traffic predictions. Two decreasers and one increaser.

    1) The baby boomer retirement bubble should reduce average km travelled per vehicle according to the 1997 household travel survey result for travel by driver age.

    2) Reported injury crash stats reveal that female drivers accounted for more of the traffic growth in the 1990s than male drivers did. Possibly because of greater workplace participation or possibly for other reasons. That trend has not been evident since 2000. If the new trend continues (and the 1) above) we wont see a return to 90s traffic growth rates even if by some miracle we get a return to 90s fuel prices.

    3) Growth in rural median incomes, especially relative to Auckland and Wellington. That means the declines in traffic seen in those two cities this year have not been replicated in rural centres, at least when measured by state highway traffic counts. That could create mobility growth where public transport is the least viable or affordable option.

  64. lprent 64

    The Vogel statements are spurious. Infrastructure investments in a developing economy against developed have quite different payback returns. That was also one of Muldoons favorite lines as well. It was as stupid in the 1970’s as it is now.

    What projects do the Nat’s propose to spend the infrastructure items on. If they’re on current projects – then what is happening is that they are planning on raiding the road taxes to pay for tax cuts.

    But lets assume that they are new projects. Then what are they? Why do we need them?

    How about offering something more than rhetoric and blind faith and idiotic bullet point policies.

    What economic advantage will we get from these new road projects? Now show me the study showing relative costs and benefits of that against public transport/rail given say a 5 fold increase in fuel prices over the next 15 years. That would be a standard risk assessment technique.

    You can’t because it hasn’t been done. So we’re being asked to do this decision on faith. Why is that? Seems like the technique of a scam artist to me.

    Where are we going to get the additional road building resources to build the roads? Import them? As far as I’m aware most of the resources are already sucked up into building the current road projects for the foreseeable future.

    What I see at present is the National party doing these policy changes on pure FAITH. Rationality is replaced with “courage”. Has to be one of the most fuckwit reasons for a policy I’ve ever seen.

    Prove me wrong – point me to the study that looks at the NPV’s in building roads with increasing fuel prices. Hell I understand that the studies done in NZ for roads at the low fuel prices showed marginal returns on most roading projects for the whole economy.

  65. Kevyn 65

    Iprent, I should add that my last para also impacts your statement “All of the roads that I can see that need to be done are already, and the funds have been committed for those.”

    Funds may have been committed to roads that don’t need doing while roads that do need doing have nbeen ignored.

    Actually, not being a voter in Auckland or Wellington, I have held that view all along. IMHO the road toll and the earthquake risk on the West Coast are far more important needs than some people missing the start of the six o’clock news.

    I used to think that “you can’t build your way out of congestion” was Green nonsense. But there is ample research to support that claim, at least in relation to peak congestion. The problem for public transport is that the reason (triple-convergence) that you can’t build out of peak congestion applies to all transport systems – cycleways, busways, tramways, railsways, expressways motorways. They are all ways out of off-peak or inter-peak congestion. But for peak congestion they are just an alternative to triple-divergence. Put simply, there is a maximum amount of congestion that can occur on one road in one rush-hour. Try to go beyond that maximum and the result is spillover into the next hour or onto the next road or another mode. Build more capacity and the reduced congestion on that road in that hour will suck in the spillover untill you are back with the same congestion on that road in that hour. The other roads and hours end up with less congestion but only because they are less conventient or efficient ways over getting from A to B. The basic cause of peak congestion is the 9 to 5 workday. Get rid of that and you will get rid of peak congestion, cheaply and easily. Play with this idea: Reintroduce the 40 hour week law with the major improvement of changing it to a 72 hour fortnight. Each working fortnight must be either 6 hours 12 days, 12 hours 6 days, 8 hours 9 days, 9 hours 8 days, 7 hours 10 days + one 2hr lunch break.

    Tackles the root cause of peak congestion at no cost, gives workers and/or employers flexibility to match working hours to lifestyles or client lifestyles.

  66. Kevyn 66

    Iprent,

    Certainly as a country moves along the continuum from less developed to more devloped the economic justifications for infrastructure investment also change. But the Vogel statements are neither spurious nor stupid, even if they were favoured by Muldoon. The fact is those statements were made in Vogel’s day and many of those who made those objections felt they were vindicated during the next depression. Vogel’s visionary policies were described by opponents as “pure FAITH. Rationality is replaced with “courage’.” Pointing you in this direction isn’t an attempt to divert your attention from Key’s announcement but simply because it is one of the clearest examples of the problems with planning and investing for the future that only seem obvious with the benefit of hindsight. That applies as much to Labour’s land transport policies as it does to the Nats.

    “What projects do the Nat’s propose to spend the infrastructure items on? If they’re on current projects – then what is happening is that they are planning on raiding the road taxes to pay for tax cuts? But lets assume that they are new projects. Then what are they? Why do we need them?”

    I bet we’re not going to get a straight answer to those questions any time soon. I do know that when the first few ten year NLTPs were published they included a waiting list and a waiting list to go on the waiting list. IMHO the items on the waiting list were often more urgent than what was on the main list – safety improvements, seismic preparedness, and such like. I will be most surpised, pleasantly surprised, if the intention is to advance those measures rather than just speed up the Waterview Connection. What’s with the sudden fixation on building motorway tunnels? Freudian or what?

    “How about offering something more than rhetoric and blind faith and idiotic bullet point policies.” I can’t see anything in my comment that fits so I presume youre referring to Key and the Nats to which I can only concur. Till I followed Jafapete’s link to Key’s release on the Nat’s website I thought that was just the MSM doing there usual p-poor job. I read Keys release on infrastructure, and read it again…and again and still could only think wtf. Talk about wasting paper.

    “What economic advantage will we get from these new road projects? Now show me the study showing relative costs and benefits of that against public transport/rail given say a 5 fold increase in fuel prices over the next 15 years. That would be a standard risk assessment technique.”

    Exactly. Tell ya what, you try and find one for pt/rail and I’ll try find one for roads then we can try and work out the relative costs and benefits.

    “You can’t because it hasn’t been done. So we’re being asked to do this decision on faith. Why is that? Seems like the technique of a scam artist to me.”

    Exactly my thoughts when I hear Cullen talking about Kiwirail. I thought I made it clear that we can’t make any sort of reliable prediction of the impact of extraordinary fuel price increases on demand for road or pt becuase it is uncharted territory. If we use responses to doubling or tripling of prices as a start point then there isn’t much hope for pt because so far switching to pt has been one of the least popular fuel saving tactics. We can’t even use past examples of perpetually high fuel costs as a reliable predictor because those high fuel prices have been in countries with historicly high population densities especially in urban areas, even in villages. Soemhow we would have to seperate out the two effects.

    The question of resources, if correct and not just industry justification for price gouging, must surely apply similarly to road and rail, especially if anyone is actually serious about the tonne/km targets mentioned in the transport strategy discussion paper.

    “Prove me wrong – point me to the study that looks at the NPV’s in building roads with increasing fuel prices. Hell I understand that the studies done in NZ for roads at the low fuel prices showed marginal returns on most roading projects for the whole economy.”

    I can believe that last sentence for the work ongoing in Auckland, which actually is most roading projects. Which is why some were included in Transit and Transfund’s performance agreements to avoid the need for BCR prioritising and others were lumped together to ride on the coat-tails of the few that actually did have good BCRs.
    Outside of Auckland the BCRs are generally well over 2:1 although the threshold outside of Auckland was 6:1 the last time I saw it mentioned (in one of the reviews of the road safety strategy). I think the source of your understanding was heavily biased. Curiously roading advocates complain about Transit using an unrealisticly severe discount rate. I’ve never actually been involved with one these BCR studies but apart from seeing the size of completed one. Even though there are standard values that have to be used for assessing the benefits, $ per hour, $ per vkt, etc, and the traffic counts seem to be from reliable, verifiable source I’m sure there are ways to make the numbers to line up in the “correct” order depending on what preferred outcome is. I’ll hazzrd a guess that as a sysop you have requested funding for security upgrades, presented you estimates of the range of risks and costs and had a manager under pressure to stay within budget choose the least favourable numbers to decline the request. That’s the big problem with BCRs and economic assessments, re-assess an assumption here, redefine a number there and you can always skew the numbers in the “right” direction. Even when we do our best to put our personal preferences to one side the big problem with any tranport evaluations is that even with over a century of experience with roads and railways there are still huge gaps in the knowledge of the physical properties of the systems and that feeds into even bigger uncertainties in transport economics so even the current situation has a wide range of valid comparative advantages that can be argued for both road and rail, and for land use, cycling, walking all of which can interact with each. Add in the unpredictability of the future and whatever we decdie to do is going to be high risk. We could spend a fortune making the railways actually work as a freight rail system only to have some breakthrough in airships or sailing ships make the whole investment redundunt. Since there are no plans to electrify the SIMT or Midland lines I seriously wonder whether even the fuel economy advantage of rail is going to be enough protection against the effects of five times higher fuel costs on an economy reliant on long delivery lines.

  67. RedLogix 67

    Disengaged:

    IF they contribute to economic growth then the government will recoup the money through an increase in the tax base without a need to increase taxes (more profitable businesses pay more tax, more people on higher wages pay more tax etc).

    I made exactly that point myself higher up, yet under the current govt, when precisely that happened, the right all started moaning in unison that taxes were too high and Dr Cullen was raping us all.

    Increasing borrowing MUST equal a higher tax take in the future.

  68. Vanilla Eis 68

    From http://www.stuff.co.nz/4642045a11.html

    “On the other hand, we need to keep things in perspective. Small operating deficits, for a limited time, are not the end of the world,” English said.

    Oh, good to hear that they have a plan to raise taxes at some point and/or dramatically slash spending/sell assets during their term to repay the loan then.

    Cheers guys.

  69. Vanilla Eis 69

    There’s still something they’re not telling us here. I suspect because they know the public won’t like it.

    If the Nats were openly right-wing and got voted in, we’d deserve what we get however embarassing. If they get in via Trojan Horse, it’s just painful.

    I’m amazed that all of the Key supporters on here are happy that he’s having to buy into all of Labours biggest policies in order to get elected. Doesn’t this just go to show that Labour were doing a good job in the first place? Whats worse, you all seem OK with the idea that he’s lying to us and that we’re actually about to elect an unknown to the highest office in the country.

    Do everyone a favour guys and ditch National, vote ACT – at least you know what to expect.

  70. lprent 70

    K:

    I do know that when the first few ten year NLTPs were published they included a waiting list and a waiting list to go on the waiting list. IMHO the items on the waiting list were often more urgent than what was on the main list – safety improvements, seismic preparedness, and such like. I will be most surpised, pleasantly surprised, if the intention is to advance those measures rather than just speed up the Waterview Connection.

    As I understand it, the rationale to do these infrastructure changes including roading earlier is to increase economic growth. That specifically means external economic growth because that is what NZ runs off.

    None of the ones you mentioned do. That is also what I understand is the case with pretty much every proposed project that isn’t already being done. They have paybacks for the internal to NZ costs like safety and security. They do not offer to significantly increase our external income or reduce our external costs. If you looked at the ratios for just the external income and external costs of the roading projects – ie the growth factors, then you’d have quite a different story to the ratio’s you’re referring to.

    That this is what I have been asking you to talk about. You keep referring to internal projects that have little relevance to the rationale offered for speeding up roading infrastructure.

    It is pretty easy to make the case for SH20 and associated projects having a strong economic reason towards growth. It allows much better access access for transport to and from the airport from the north of Auckland. In particular the exporters of Albany to their main export channel. Basically it should have been done a decade ago, before the Albany export nexus grew to its current size. The traffic patterns mean that it will massively reduce fuel consumption and delays. It speeds up time to market for products from companies like the one I currently work for, and allows us to better service our overseas clients.

    I grew up in Mt Albert – so I’m always surprised at the dickheads who seem to think that the isthmus welcomes having a motorway project. There is NO enthusiasm there for the project, the enthusiasm is from the north and south.

    The only reason that there isn’t more voracious and effective opposition is because transit eventually came up with a plan that didn’t destroy the suburbs it goes through. If they hadn’t then I’d have been volunteering there rather than here.

    I’d also point out that the 1.5 billion (actually 3 billion after matching funds) for fibre optic to the home has the same problem. There is bugger all external growth associated with it. The only known use is to push movies and media. There sure as hell is no need for IT to use it. We’d want better external links before even looking at this daft policy.

  71. We Are The 801 71

    Why is Key not detailing any of National’s “policies”?

    Either (a) National hasn’t even really thought things through and they don’t really have a “plan” at all.

    or

    (b) National does have a plan but it is so outrageously messed up that they KNOW most kiwis would reject it.

    In either case, supporting National should be avoided altogether. Maybe they should re-name themselves the Mystery Party since they leave us with more questions than answers as to what they plan on doing if elected.

    Key doesn’t want kiwis to know what they have in mind and are banking on us to just go along with this We’re-Not-Labour meme. Sorry, that’s not enough– voters need to be informed about what your policies are in order to make an informed decision– that’s what democracy is all about.

  72. Kevyn 72

    Iprent,

    Ah, now that I can see what your focus is your arguments are starting to make sense. If the sole purpose is economic growth with no regard to economic efficiency then travel time reductions and fuel savings become the be all and end all of the funding decisions. In that context borrowing to build the Waterview Connection as a toll road makes sense. With the way GDP is calculated, reducing the road toll could actually reduce GDP, depending on what the money not spent on rehab or funerals gets spent on. That’s the problem with GDP not differentiating between good spending and bad spending. I’m an analyst not an economist so I would assume that removing unproductive spending from the health and welfare votes would allow that money to be spent productively in those areas. The likely effect of reducing ACC levies is more speculative since that puts money back into the road users pocket, they might spend it on healthier food for their kids or waste it on ciggies.

    This makes perfect sense in relation to Key’s announcement which specificly gives that rationale.

    Where it doesn’t make sense, and what had been running through all my thinking up to this point, was why Labour had been directing Crown funding for land transport in a similar manner without that stated economic objective. To avoid new confusion it is specificly the Crown contribution and earlier variations to Transfunds performance agreement that exempted some works from Transfund’s normal allocation procedures that I am referring to here. As far as I can see all other funding allocated by the Board of Transfund/LTNZ has been consistent with the various factors that they are legally required to have regard to. The shift in emphasis from road safety to urban congestion is probably the result of a combination of falling marginal returns as the worst blackspots have been treated and adjastments to the values used for lives saved and time saved.

    The official reasons for throwing huge amounts of money at Auckland sound good but fall over as soon as you delve below the surface. Yes, there was a billion dollar cost in 1997, and that can only have increased. But that economic cost includes the social cost of personal time wasted in traffic and the financial cost of business time wasted. Transport economists regard social cost as a cost born solely by those stuck in traffic whereas the financial cost is passed on to customers. The KPMG study isn’t publicly available but assuming they used standard Austroads or US methods then it is safe to conclude that between 20% and 30% is financial cost, the remainder is social cost. More importantly, comapartive figures weren’t available for other urban areas when KPMG did their study so the nett cost to the national economy wasn’t available. Transit’s travel time surveys have provided the data needed to work that out in relation to Wellington and Christchurch but not for other centres or for rural regions. The important conclusion is that, per capita or per vkt, there is no difference in congestion financial cost between Christchurch and Auckland. Transit needs to survey some other centres to determine whether Christchurch is representative of cities without motorways or an anomaly.

    The other valid claim is that Auckland has lost not recieved back all the money it payed into the road fund. Again this was implied to be unique. In fact three other regions have lost bigger percentages of their contributions – Canterbury (-33%), Waikato (-26%), Taranaki (-15%), Auckland (-14%) as at 2003. Auckland is the only where the percentage has improved since then. When those figures are broken down into maintenance and construction all but Auckland have lost out for both maintence and construction. There are good reasons, both technical and economic, why Auckland and Canterbury need less maintenance money than their traffic generates. Their are no similar reasons for why any of these regions needed less construction funding than their traffic generates. The good news for Auckland is that the overpayment for maintenance was so great that one-quarter of the overpayment was able to be kept within the region for construction funding. Consequently Auckland has received more construction funding per vehicle km travelled than any other region every year since 1994, and was never below the national avergae since 1959. Hence while it is true that Auckland hasn’t received anywhere near the amount of money it has paid into the fund that actually can’t be the cause of Auckland’s traffic problems unless they are caused by poor maintenance.

    In fact the Treasury briefing to cabinet on per capita allocation of the last 5 cent increase in the petrol tax revealed that Canterbury would be the biggest winner from have the additional tax allocated per capita rather than as a continuation of the existing Transfund allocations. That extra funding hasn’t shown up in Canterbury’s allocations nor in the forecast allocations for the next ten years. To add insult to injury the extra funding for Canterbury announced in the latest budget is equal to that missing money and is conditional on being matched by Ecan funds, a condition not imposed on the regional councils of Tauranga, Waikato, Wellington or Auckland.

    You can find the relevant financial data in spreadsheets on my website. The Traffic data and congestion studies are available from Transit’s website.

    As far as seismic hazards go the main concern is the West Coast section of the South Island tourist loop as it straddles the Great Alpine Fault. The current consensus of paleoseismologists is that there is an imminent risk of a M8 quake. Transit’s risk assessment concluded that, without seismic upgrades none of their bridges between Greymouth and Te Anau will be immediately unusable and all of the bridges between Te Anau and Franz Joseph have a high probability of catastrophic failure. At the lowest probable quake magnitude they expect to be able to reopen the Haast and Athurs Pass highways within 6 months. At the highest probable magnitude it will take two years to reopen the Haast highway. A seismic program can cut those closure times on the Haast highway by two-thirds. There’s nothing they can do about the scree slope above the Otira Viaduct so there’s no real point in major seismic upgrades on that route. If that slope collapses, and it probably will in a M7.8 quake, it will fill the gorge to a level higher than the viaduct.

    Needless to say, I’m an ex-Jafa now resident in Christchurch and dependent on tourists and sheep farmers for my livelyhood. I’d hate to have to go back to being an office bound systems analyst.

    ReCaptcha: Trippe surplus
    (nice one) 😉

  73. Kevyn 73

    Iprent, The editor thingee doesn’t like me. Why did we ever get rid of DR-DOS and 1200 baud modems, life was so much simple then. Please read my first sentence this way (to emphasise who I’m accusing of being slow witted.) 😯

    Ah, now that I can see what your focus is your arguments are starting to make sense to me.

    [lprent: It is the best late editor I’ve found so far. ]

  74. Kevyn 74

    Iprent, The just proves even the best can’t defeat Mr. Gates’ Messy windows 😉

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    by Daphna Whitmore The long years of Netanyahu’s reign are drawing to an end. For years he has epitomized reactionary zionism as he oversaw hundreds of thousands of Jewish settlers seize land in the West Bank. There are now 700,000 settlers, putting an end to the myth that Israel was ...
    RedlineBy Daphna
    3 days ago
  • Petrol companies promise prices will come back down once peace is restored to the Middle East
    BP, Z and Mobil all insist that petrol price hikes are temporary, “in a very literal sense.” The nation’s major petrol providers are trying to allay customer fears over prices, promising that they’ll move to lower them again “immediately” when the Middle East is returned to its formerly peaceful state. ...
    The CivilianBy admin
    4 days ago
  • All Blacks unveil boat for Rugby World Cup 2019
    South African coach Rassie Erasmus says he has no idea what they’re going to do about the boat. In a highly anticipated press conference this afternoon, All Blacks coach Steve Hansen has finally unveiled the team’s boat for its Rugby World Cup 2019 campaign. In a press conference that went ...
    The CivilianBy admin
    4 days ago
  • An increasingly shoddy coverup
    The Operation Burnham inquiry continued to question senior NZDF staff today, and their shoddy coverup over their knowledge of civilian casualties continue to fall apart. If you recall, first, we were asked to believe that it was all a series of "mistakes and errors": a senior officer with multiple degrees ...
    No Right TurnBy Idiot/Savant
    4 days ago
  • If we are to avoid making the earth uninhabitable, we need to rapidly decarbonise our civilisation, and cut emissions to zero as quickly as possible. This seems like an impossible task, but its not. Pushing hard on a few technologies and trends will let us halve emissions in a decade:Greenhouse ...
    No Right TurnBy Idiot/Savant
    4 days ago
  • A further attack on transparency
    The Local Government Act 2002 Amendment Bill (No 2) had part of its committee stage yesterday. its a generally tedious bill about the nitty-gritty of local government reorganisation. But it includes a clause making the Local Government Commission subject to the Ombudsmen Act, and hence the OIA. Great! Except of ...
    No Right TurnBy Idiot/Savant
    4 days ago
  • Ihumātao and Treaty settlements
    Yesterday Ihumātao's mana whenua reached a consensus that they would like their land back, and asked the government to negotiate with Fletcher's for its return. The government's response? Try and undermine that consensus, while talking about how doing anything would undermine existing Treaty settlements. The first is just more bad ...
    No Right TurnBy Idiot/Savant
    4 days ago
  • Protecting our history
    Its Suffrage Day, the 126th anniversary of women winning the right to vote (but not stand in elections) in New Zealand. And to celebrate, the government has bought Kate Sheppard's house in Christchurch:The government has bought Kate Sheppard's former home in Christchurch for more than $4 million. The Ilam villa ...
    No Right TurnBy Idiot/Savant
    5 days ago
  • Climate Change: Ostracising the coal-burners
    The UN climate summit is happening in new York next week, and unlike previous years, coal-burners and denier-states are not being invited to speak:Leading economies such as Japan and Australia will not be invited to speak at next week’s crunch UN climate change summit, as their continued support for coal ...
    No Right TurnBy Idiot/Savant
    5 days ago
  • Jojo Tamihere Salutes Herr Goff.
    Get Back Jojo! The elation in Mayor Phil Goff’s camp may be easily imagined as they watched social media light up in indignation at challenger John Tamihere’s "Sieg Heil to that" quip. Just when JT’s notoriously right-wing, sexist and homophobic stains were beginning to fade back into his ‘colourful’ past, ...
    5 days ago
  • Hard News: A fun but flawed weed documentary
    Patrick Gower is good value when he's high. Not that I've ever, you know, got stoned with him. But in the second part of his documentary Patrick Gower on Weed, he does what you'd expect in a modern weed documentary and immerses himself – first with a doctor, then a ...
    5 days ago
  • Candidate Survey: Western Bay of Plenty – Local Body Elections 2019
    We surveyed candidates on their attitudes to issues facing the Western Bay Region, find out what they think: “Closing the Gap” Tauranga, one of the area groups of Income Equality Aotearoa NZ Inc., has surveyed all candidates in the three local body elections to discover attitudes to some basic issues ...
    Closing the GapBy Tracey Sharp
    5 days ago
  • Project Nettie calls on scientists to defend biology
    Please spread widely, and sign, to support science and rationalism over the new irrationalism sweeping universities and institutions.  PROJECT NETTIE Sexual reproduction, the generation of offspring by fusion of genetic material from two different individuals, evolved over 1 billion years ago. It is the reproductive strategy of all higher animals ...
    RedlineBy Daphna
    5 days ago
  • I’m glad I don’t live in Auckland
    Just when I was thinking that Palmerston North's mayoral race (which includes a convicted child molester / public wanker and a convicted child beater) was the worst in the country, Auckland mayoral candidate John Tamihere opened his mouth:Auckland mayoral candidate John Tamihere is being slammed for using the words "sieg ...
    No Right TurnBy Idiot/Savant
    5 days ago
  • Index of Power Update, 2018-19: China #2
    We reprint below an article from the excellent website the Economics of Imperialism by Tony Norfield This is an update of the statistics for my Index of Power, using data for 2018-19 and discussing what a country’s ranking reflects. The major change is that China’s rank has shifted up and ...
    RedlineBy Daphna
    5 days ago
  • Climate Change: A history lesson
    Why is New Zealand climate change policy so crap? The Herald this morning has a long article on the twists and turns of climate change policy in New Zealand [paywalled / depaywall script], which shows where we've been. The short version is that the government first began worrying about this ...
    No Right TurnBy Idiot/Savant
    5 days ago
  • What the All Blacks Mean to Us
    The All Blacks have been, for more than a century, arguably the most successful International sports team in the world. But they are more than that; even for those Kiwis who are immune to the charms of rugby (and there are more than a few), the All Blacks are ambassadors ...
    Bryan GouldBy Bryan Gould
    6 days ago
  • No one is born into the wrong body
    A short and incredibly powerful speech from a young lesbian woman. No one is born in the wrong body. ...
    RedlineBy Daphna
    6 days ago
  • Contempt
    Back in June, the UK Court of Appeal ruled that that country's continued arms sales to Saudi Arabia were unlawful. So you'd expect that the UK government stopped approving them, right?Of course not:The government has apologised for breaching a court ruling against the sale of weapons to Saudi Arabia that ...
    No Right TurnBy Idiot/Savant
    6 days ago
  • Covering up the cover-up
    Yesterday NZDF officials were put on the stand about the lies they had told over Operation Burnham, making implausible claims that it was all a big mistake. But along the way, we learned they had already been put on the spot about it by a previous Defence Minister, who had ...
    No Right TurnBy Idiot/Savant
    6 days ago
  • Not as important as they think they are
    Farmers have been whining a lot lately, about the methane targets in the Zero Carbon Bill, about Canterbury's proposed nitrogen limits, and about the government's new proposals to stop them from shitting in our lakes and rivers. These policies are "throwing farmers under the tractor", they will force farmers off ...
    No Right TurnBy Idiot/Savant
    6 days ago
  • Behind Every Good Woman Should Stand – Another Good Woman.
    Alone, Alone, All, All, Alone: To argue that the Prime Minister is the victim of her advisers’ failure to keep her informed may offer Jacinda some measure of exoneration – but only at the cost of casting her as a hopeless political ingénue. A star-dusted muppet, whose only purpose is to ...
    7 days ago
  • Poor quality, poorly educated kiddie ‘Journalists’ spreading fake news
    In times of hysteria about the “World coming to an end” and “rising sea levels” so-called ‘Journalists’ who can barely spell words longer than four letters are having a ball! Though the majority of the Public have worked out that manmade climate change is nothing short of pseudo-science, and the ...
    An average kiwiBy admin@averagekiwi.com
    7 days ago
  • Chris Trotter on the BFD
    I don't want to give pblicity to certain parts of the internet that are better left to fester in their own irrelevance (I know, a bit like this place) but the listing of Chris Trotter as a 'author' on Cameron Slater's spinoff website, the BFD requires some explanation.Now, I don't ...
    1 week ago
  • Sex is not a spectrum
    The text below is a Twitter thread by Heather Heying that explains the essence of sexual reproduction and it long evolutionary history. She is an evolutionary biologist and a “professor-in-exile” after she and her husband, Bret Weinstein, stood up to supporters of an enforced “Day of Absence” for white staff and teachers ...
    RedlineBy Daphna
    1 week ago
  • Climate Change: Trees, aviation, and offsets
    With crunch time for new Zealand climate policy approaching, most of the New Zealand media have got on board with a global reporting effort to cover the issue. There's one strand of stories today about polling and what it shows about changing public attitudes to the crisis, but the strand ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Pissing-Off The Israelis Is A High-Risk Strategy.
    Dangerous Foes: For those readers of Bowalley Road who feel disposed to dismiss any prospect of an Israeli destabilisation of New Zealand politics, the example of the United Kingdom repays close attention. Ever since the election of Jeremy Corbyn as leader of the British Labour Party, the Israelis have sanctioned, funded and ...
    1 week ago
  • Something to go to in Wellington
    Make It 16, the youth-led campaign to lower New Zealand's voting age, is holding an official campaign launch at Parliament this Friday from 16:30. If you'd like to attend, you can register using EventBrite here. ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • A founding member responds to Peace Action Wellington
    by Don Franks It was a lovely sunny Wellington afternoon with blue skies above  the beaches.  In Courtenay Place, political activists packed out a stuffy upstairs room for an important meeting. The assembled pacifists, anarchists, communists and independent young radicals of Peace Action Wellington felt the need for a mission ...
    RedlineBy Admin
    1 week ago
  • “Mistakes and errors”
    Current and former NZDF top brass are being publicly grilled this week by the hit and run inquiry over their public responses to allegations of civilian casualties. Previously, they've claimed there were no casualties, a position which led them to lie to Ministers and to the public. Now, they're saying ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • “Homosexuality is same-sex attraction and relationships, not heterosexuals with delusions of gende...
    by Rafael D. Quiles (gender-critical gay man from Puerto Rico) The writing on the wall is right in people’s faces and people just don’t see it or don’t want to. What could actually possess a heterosexual male to want to feminize himself and claim that he is a lesbian? Because ...
    RedlineBy Admin
    1 week ago
  • Trump: “Where’s my favourite dictator?”
    From the Wall Street Journal:Inside a room of the ornately decorated Hotel du Palais during last month’s Group of Seven summit in Biarritz, France, President Trump awaited a meeting with Egyptian President Abdel Fattah Al Sisi. Mr. Trump looked over a gathering of American and Egyptian officials and called out in ...
    1 week ago
  • Magdalen Burns, 1983-2019, fighter for women’s liberation
    by the Redline blog collective At Redline we are very saddened to hear of the death of Magdalen Burns who passed away on the morning of Friday, September 13 (British time). Magdalen was a great fighter for the rights of women in general and lesbian women in particular, a defender ...
    RedlineBy Admin
    1 week ago
  • Parliament and the Executive
    The Brexit issue has certainly brought with it a series of apparently difficult constitutional issues, many of them concerning the respective roles of the executive and parliament. Most of them arise because of the unwillingness of MPs, despite their professions to the contrary, to be bound by a constitutional rarity ...
    Bryan GouldBy Bryan Gould
    1 week ago
  • The Abigail Article; Martyn Bradbury’s Article, and My Response
    . . This blogpost is different to my usual format of reporting on issues… Since July 1011, I have blogged on a variety of political issues; near always political and/or environmental; mostly highly critical of the previous National Government. Other issues included Israeli occupation of Palestinian lands and repression of ...
    Frankly SpeakingBy Frank Macskasy
    1 week ago
  • Police will have to wear silly Buckingham Palace hats from now on, says Police Minister
    Those close to the Police Minister believe the initiative may be the result of Nash “seeing a great deal” on AliExpress. In a move that comes seemingly out of nowhere, Police Minister Stuart Nash announced this afternoon that he expects all frontline staff to don bearskin hats, famously worn by ...
    The CivilianBy admin
    1 week ago
  • A sensible crackdown
    The government has released its Arms Legislation Bill, containing the second tranche of changes to gun laws following the March 15 massacre. And it all looks quite sensible: a national gun register, higher penalties for illegal possession and dealing, tighter restrictions on arms dealers and shooting clubs, and a shorter ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • California bans private prisons
    Private prisons are a stain on humanity. Prison operators explicitly profit from human misery, then lobby for longer prisons terms so they can keep on profiting. And in the US, prison companies run not only local and state prisons, but also Donald Trump's immigration concentration camps. Faced with this moral ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Why PPPs are a bad idea
    When National was in power, they were very keen on Public-Private Partnerships (PPPs) - basicly, using private companies to finance public infrastructure as a way of hiding debt from the public. They were keen on using them for everything - roads, schools, hospitals. But as the UK shows, that "service" ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • A Movement That No Longer Moves.
    Moving And Shaking: There was a time when people spoke matter-of-factly about the “labour movement” – a political phenomenon understood to embrace much more than the Labour Party. Included within the term’s definition was the whole trade union movement – many of whose members looked upon the Labour Party as ...
    2 weeks ago
  • NZ ‘left’ politically embracing extreme postmodernism
    by Philip Ferguson Much of the left, even people who formally identify as marxists, have collapsed politically in the face of postmodern gender theory of the sort pioneered by American philosopher Judith Butler. For Butler even biological sex is socially constructed. “If the immutable character of sex is contested, perhaps ...
    RedlineBy Daphna
    2 weeks ago
  • The obvious question
    The media is reporting that the (alleged) Labour party sexual assaulter has resigned from their job at Parliament, which means hopefully he won't be turning up there making people feel unsafe in future. Good. But as with everything about this scandal, it just raises other questions. Most significantly: why the ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • The moment I found out that you found out, I acted swiftly
    By Prime Minister Jacinda Ardern I am every bit as angry as you are. I am every bit as disappointed as you must be. The people with power, oversight and the ability to do something about these processes within the Labour Party should be ashamed. Whoever those people are, I ...
    The CivilianBy admin
    2 weeks ago
  • This is why people hate property developers
    Property developers think there is an "oversupply" of houses in Auckland:High turnover rates and falling prices may be a sign that there are too many new houses going in to some parts of Auckland, commentators say. [...] Property developer David Whitburn said there was a "bit of an oversupply" in ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Australia to Pacific: “Fuck you, you can all drown”
    World leaders are meeting in New York in two weeks for the 2019 Climate Action Summit, where they are expected to announce new and more ambitious targets to stop the world from burning. But the Australian Prime Minister won't be there, despite being in the USA at the time:Scott Morrison ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Implausible ignorance
    Labour Party president Nigel Haworth resigned yesterday over the party's sexual assault scandal. But while that's good news, its unlikely to take away the stench of a coverup. Because according to Paula Bennett in Parliament yesterday, pretty much everyone in the Prime Minister's office was involved as well:I have been ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Labour’s Fatal Flaw.
     Two-Faced? Labour insiders' commitment to the neoliberal status quo puts them at odds with their party’s membership; its trade union affiliates; and a majority of Labour voters, but this only serves to strengthen the perception they have of themselves as a special elite. Among the lesser breeds, they’ll talk up a ...
    2 weeks ago
  • Ten reasons the Tories do NOT want an election
    There has been a lot of talk about Boris Johnson wanting an election, and he has blustered with great gusto about 'chicken' Jeremy Corbyn refusing one, but I think there are many reasons why he is secretly glad he has been refused the opportunity:The Tories are an utter rabble,tearing themselves ...
    2 weeks ago
  • Prorogation Illegal, rule Scottish judges
    Scottish appeal court judges have declared that Boris Johnson’s decision to suspend parliament in the run-up to the October Brexit deadline is unlawful. The three judges, chaired by Lord Carloway, Scotland’s most senior judge, overturned an earlier ruling that the courts did not have the powers to interfere in the prime ...
    2 weeks ago
  • Let me explain what I meant by Everyday New Zealanders
    By Simon Bridges. The following is a press release from the office of Simon Bridges, leader of The National Party. Key ora, New Zealand. Happy Maori Language Week. Look, I’m writing to you today because I want to clear something up. There’s been a lot of kerfuffle around some things ...
    The CivilianBy admin
    2 weeks ago
  • Yes, the SIS is subject to the Public Records Act
    I understand there's some stuff going round about how the SIS "was removed from the list of public offices covered by the Public Records Act in 2017". The context of course being their records derived from US torture, which will be disposed of or sealed. The good news is that ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • An evidence-based discussion of the Canadian fluoride/IQ study
    Dr. Christopher Labos and Jonathan Jarry discuss the recent Canadian fluoride/IQ research. They provide an expert analysis of the paper and its problems. Click on image to go to podcast. The critical debate about the recent ...
    2 weeks ago
  • Climate Change: Australia in denial
    Australia is burning down again, and meanwhile its natural disaster minister is denying climate change:Australia’s minister responsible for drought and natural disasters, David Littleproud, has said that he doesn’t “know if climate change is manmade”. Clarifying earlier comments that the question is “irrelevant” when considering the Coalition government’s response to ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Philippines activist speaking on the Duterte tyranny
    Auckland Philippines Solidarity is excited to host Professor Judy Taguiwalo for a speaking tour of NZ in September. She is a well-known activist in the Philippines and was a political prisoner under the Marcos dictatorship. Professor Taguiwalo briefly served as a Cabinet member under President Duterte but was forced from ...
    RedlineBy Daphna
    2 weeks ago
  • Disgust
    I have no special insights to offer on the Labour sexual assault coverup. All I have is disgust. Disgust that an organisation could fail its people so badly. Disgust that they punished the victims rather than the perpetrator. Disgust that its party hacks are apparently blaming the victims for demanding ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Speak Up for Women calls out Greens’ censorship
    This open letter to the Green Party was penned after an opinion piece by Jill Abigail, a feminist and founding member of the party, was censored by the Greens’ leadership. (Redline has reprinted her article here).The intolerance of the Green Party leaders and their acceptance of the misogyny of gender ...
    RedlineBy Daphna
    2 weeks ago
  • Member’s Day: End of Life Choice, part 3
    Today is a Member's day, and David Seymour's End of Life Choice Bill continues its slow crawl through its committee stage. They're spending the whole day on it today, though the first hour is likely to be spent on voting left over from last time. After that they'll move on ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Flight to Los Angeles turned back after passengers decide they don’t want to go anymore
    An ambitious plan to fly to Los Angeles petered out into a brief sight-seeing trip and a desire to return home and get some sleep before work tomorrow. Air New Zealand has confirmed a flight to Los Angeles last night was turned back about a quarter of the way into ...
    The CivilianBy admin
    2 weeks ago
  • Indigenous Futures: defuturing and futuring – an analytical framework for policy development?
    There appears to be consensus – by omission – that the concept of indigenous futures should be accepted at face value. So I scavenged the internet to see if I could locate an academic descriptor or a framework around how we think about it as a concept, and whether it ...
    EllipsisterBy Ellipsister
    2 weeks ago
  • Cadbury rumoured to be releasing the Pineapple Trump
    Here’s another novelty chocolate to shove in your gob, New Zealand Cadbury could be seeking to make itself great again with a rumoured new release: Pineapple Trumps, a spin on its classic chocolate-encased pineapple treat and do-it-yourself tooth remover. The global confectionery manufacturer and bumbling “before” character in an infomercial, ...
    The CivilianBy admin
    2 weeks ago
  • The coming resource war.
    During my time in the Pentagon I had the privilege of sitting down with military leaders and defence and security officials from a variety of Latin American nations. Sometimes I was present as a subordinate assistant to a senior US defence department official, sometimes as part of a delegation that ...
    KiwipoliticoBy Pablo
    2 weeks ago

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