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Taumarunui no longer on Main-trunk line, had Key had his way

Written By: - Date published: 9:04 am, July 3rd, 2008 - 78 comments
Categories: assets - Tags:

A day into the renewed public ownership of our railway system and it has emerged that not only did John Key help sell it in the first time and make a profit off the asset-stripping that followed. Further, his party’s policy of keeping the rail in private hands would have seen nearly all the network shut down by Toll even while the taxpayer continued to subsidise the company.

Toll was planning to shut down 8 lines, part of the Main-trunk line (including the part that goes through Taumarunui!), and the Overlander, leaving only two intercity passenger lines.

In the age of peak oil, the last thing we need to be doing is closing down a means of transport that is 4 times more fuel efficient than taking freight by road.

John Key sold our railways once and he would do it again.

78 comments on “Taumarunui no longer on Main-trunk line, had Key had his way”

  1. vto 1

    ever heard of “calling their bluff” Mr P?

    If I were the govt and had been subjected to such a threat I would have threatened regulatory intervention to keep those lines open, or similar. After all it was sold on the basis that the services would keep running. The fact that this threat was accepted says more about the biz and negotiating ability of this govt when up against big bad biz boys. Similarly with Air NZ – jumped in too soon.


  2. higherstandard 2

    From your link

    “Dr Cullen has released a list of services that was the centrepiece of Toll’s ‘Plan B’ which hung over negotiations with the government over the subsidy for the Australian firm’s operation.”

    Isn’t this the same as those tossers at Bluff (apt place for them to be situated) who were threatening all kinds of things – sounds like negotiations 101 to me.

    I also thought it was Jim’s National government that sold the rail ?

    VTO has beat me to it !

  3. Monty 3

    You obsession is not going to help you in the polls. Yesterday Clark dropped her Neutron Bomb – but all it turned out to be was a fizzer. http://nominister.blogspot.com/2008/07/five-four-three-two-one-fizzzzzzzz.html . Where is the apology from Clark?

    Is the whole Labour campaign going to focus on John Key? Is this the Labour strategy? Is that all you have? Where is the is the policy from Labour? Are you now aware of polls that are going to drop you down to 25%. Or are lies about John Key all you now have.

    I am looking forward to your post on the other important issues out there rather than a railway no one really cares about except a few greenies and Cullen who always wanted a trainset, that has lost Labour many more votes than gained.

    I am looking forward to the greatest defeat in Labour history. You obsession with John Key will not be helping the cause. Most NZers actually really like the guy.

  4. insider 4

    HS you don’t understand. The tactic is to keep repeating the smear. Doesn’t matter if it is not true. Say it often enough….

    It;s a bit like push polling only more ethical because it is ‘honest’.

  5. BeShakey 5

    “threatened regulatory intervention”

    So the new line is that the Labour nanny state is useless because it hasn’t launched (or threatened to launch) enough regulatory interventions in the market. Even without any policies the right can’t keep their story straight.

  6. lprent 6

    We can live without the smelter.

    It would be hard to rebuild the rail network when we needed to – which we probably will. Toll look like they were too short-sighted to run it in the long term.

    Natural monopolies need to be either strongly regulated or in state ownership. In the case of rail, state ownership is definitely to be preferred after looking at the utterly crap way that private companies have taken care of the assets.

  7. so, the righties are now calling for heavy handed regulation of a private company? You agree we don’t want those lines shut down so why not just buy the company and be done with it, rather than keeping on paying tens of millions a year in subsidies to a aussie profit-making outfit and using the blunter tool of regulation to try to get it to behave?

  8. Lipper 8

    For such a small population, and without the ability to upgrade to High Speed Trains.

    This whole purchase is heavily flawed as a strategic concept.

    CO2 emissions are a huge scam perpetrated by so many Governments to extract extra revenues by guilt.

    Y2k was the last scam, and it worked very well!!

    Trains are inefficient, and 19th Century. When you count in the opportunity cost of all that infrastructure.

    Every Public train Service in Europe loses money!!

    They all have to be subsidised.

    To say that Rail is the future is like saying that NZ missed a trick by not having a canal network like the UK for freight.

    Utter nonsense.

    They are all weapons of mass distraction!!

  9. rjs131 9

    What role did John Key have in selling the railways? I didnt realise he was involved in the National Cabinet in 1993.

    I guess you dont refer to all the assets that Cullen and Clark sold off in the 1980s by the Labour government or is that different?

  10. ghostwhowalks 10

    previous comments are wrong about this just being Tolls ‘opening’ negotiation.
    The initial talks were over the rental Toll would pay to run trains on the government owned tracks. It was clear they didnt want to pay any rental for large areas of the network, in affect the taxpayers were being to fund it. There wasnt any way for the government to say go ahead and suffer the consequences . There werent any for Toll.

    The government say the only way to call their bluff was to buy them out. Which they have

  11. Dilip 11

    That is amazing steve pierson, a whole post on John Key and you don’t mention Crosby Textor. But your post is still as accurate as the smear helen clark made on John Key yesterday. You know the one that turned out to be wrong.

    Gutter politics never wins.

    [if you can’t make an argument as to why my post is wrong, you are just a troll. been a few righty trolls show up begging us to stop covering National since the C/T revealations came out. SP]

  12. as to AirNZ. The government has made $260 million in dividends on its investment of $800 million in just a few years, the paper value of the shares is above what we paid (not that it matters unless we’re thinking of selling), and we still have functioning regional air routes, which would have been the first to go if AirNZ had been absorbed into Singapore Airlines

  13. higherstandard 13


    I thought Toll only owned the rolling stock and the lines were in government control ?

  14. vto 14

    he he fullas, I figured that regulatory intervention comment would snare a bite. Honest truth is I have no idea of the ins nd outs of detailed negotiations etc – it was just a gut instinct, based on the little available info, that this govt gets nailed by the biz folk when in negotiations. Tranzrail did appear to threaten and coerce and blackmail rather well.

    I agree with Iprent in that natural monopolies need to be structured / handled carefully lest that nasty part of the human character, greed, seeps out and rots things.

  15. HS. yes, but Toll was going to stop running trains on those lines, then ONTRACK would have had the choice of continuing to maintain tracks that were no in use and for which it had no revenue stream, or abandoning them. I can imagine vto’s ‘gut reaction’ if ONTRACK was maintaining tracks that no-one was using.

  16. lprent 16

    Monty: That post at No Minister seems to have been written by someone with a severe paranoia problem. Can you confirm this diagnosis?

    Your comment was considered to probably be spam by akismet. Looks like they’ve run across that type of fractured thinking before. I released it anyway.

  17. Oliver 17

    Will this pot be changed now that it has been revealed that Key actually had no role in selling Tranzrail and did not personally profit from the sale?

    Will Helen refrain from making inaccurate personal attacks on Key?

    Will Helen apologise for making inaccurate personal attacks on Key?

    Will the writers of this blog make a clear statement acknowledging that Key did not profit from the sale of Tranzrail and that any suggestion that he did found on this blog is erroneous?

  18. higherstandard 18


    Might be just me but wouldn’t it have been a cheaper option to subsidise Toll and offer incentives to get freight and people to use these lines ?

  19. insider 19


    It’s a very good point. Reading SP’s post you;d think that the rails were being ripped up. However, Toll had a 70 year right of use of tracks so that could mean another company could not have accessed the tracks. If so then it seems another brilliant piece of negotiation by the govt to allow an asset to become stranded at the whim of a single company.

    What about HC revealing even more costs for the rail purchase that have been hidden from the public. Interesting that National is expected to reveal who advises it, who funds it, who works for it, yet the Govt can spend $1b of our money or more (we just don;t know) and no transparency is expected from Standardistas…

  20. Listening to talkback this morning lads? No-ones talking about ACC. No-one’s talking about Slippery John. No-one’s talking about Crosby/Textor. No-one’s talking about push polling. No-one’s talking about Taumarunui (just so lprent can’t accuse me of off-topic trolling lol).

    Everyone’s talking about the truck protest. Everyone’s talking about Helen Clark’s smear tactics. Everyone’s saying that the Labour government is history. And everyone’s totally pissed off.

    But keep spreading the innuendo, the half-truths and the untruths (aka factual misunderstandings). But get this. No-one’s listening anymore. As Michael Laws said at the weekend (much as I dislike the man) “People switched off their lights, hung up the phone and refused to answer their texts. From that moment on, Labour were the walking dead.”

  21. insider 21

    Lynne Lynn

    Still think HC is ‘honest’ after yesterday’s smear?

    [lprent: What smear? And yes.
    How about spelling my name correctly?]

  22. Steve: “4 times more fuel efficient than taking freight by road.”

    Link please ?

  23. vto 23

    Thats what I always wondered too HS. Why could someone else not use the infrastructure if not used by Toll etc. Bad negotiations. It is no wonder fay and richwhite scurry about hidden these days. Those guys have big questions to answer (morally type ones).

  24. lprent 24

    hs: Yes but toll as the only rolling stock operator wasn’t willing to pay rental on parts of the network – ie what was required for maintenance.

    The only real options would have been to shut down those parts of the network or find another operator. Since Toll were in a natural monopoly position and were cherry picking the most profitable parts of the network, another operator wasn’t viable.

  25. Dilip 25

    Government could easily have said to toll that if they didn’t want to use lines then government would allow somebody else to use lines. Instead they get shafted by australian company that laughs all way to bank by how much government paid them. And toll gets to keep its trucking business with preferential access to rail land. But we don’t know the details of that because the government keeps it secret.

    Meanwhile in another secret move the government increases road user charge which is real issue of the day to pay for the rail subsidy for next ten years. There is now open revolt on roads at this labour government but all the prime minister can talk about is what shares John Key had.

  26. lprent – what rock are you hiding under? The smear that John Key and his family trust benefitted from his role as Associate Spokesman on Transport in 2003 when Tranzrail was sold to Toll. The smear that Helen Clark has reluctantly accepted was incorrect, but refuses to apologise for.

  27. insider 27


    Fay Richmen have nothing to do with this. Track access is an agreement between govt and TOll following the sale of the tracks to govt.

    Rolling stock can be bought and sold. It does not give a monopoly position. What did was exclusive access rights.

  28. vto 28

    Dilip “There is now open revolt on roads at this labour government”.

    That is very true. Has Clark now lost the remaining strands of her political nous to allow this to hppen? Is the rolling snowball getting too large to control?

    Friday morning will make for a wonderful 6 o’clock news. Mayhem french protest style.

  29. vto 29

    insider, I figured that. I just hate those two for some of the things they took advantage of, including pulling all cash out of tranzrail when they had it and doing zip maintenance. I heard from a very close sauce. Just wanted to throw their names into the mix. Naughty I know.

  30. insider 30

    Sorry Lynn, no ‘e’ noted. I suspect that error is the bane of your life.

    What smear? The one during a PQ about the cost of buying back rail, that HC had found time to put resources into researching and set up a patsy question with Winston over. The one where she falsely accused Key of corruption.

    She was however unable to answer a number of questions about the actual costs funny that given the significance the govt has given the policy, for someone who had the question on notice, who helped launch the purchase on Tuesday and who apparently also is a master of policy detail.

    But she was obviously too busy concentrating on party political strategy.

  31. Ari 31

    Inv2: And the smear that Helen needs public servants to investigate Key for her when she has the Labour Party to do it for her? 😉 Sounds paranoid to me.

    Here’s a hint: Just because the public service knows it favours Labour’s brand of main-party-politics over National’s doesn’t mean that it has abandoned the principle of political neutrality.

  32. lprent 32

    I2: Ok – I seem to remember something about it in the news this morning. Seems minor to me.

    Ah so that was what Monty was blathering about in the link.

    Jez – you guys get excited. So what you are saying is that a question about a possible conflict of interest is of national importance. This is why the site has been flooded by people this morning.

    Hell – I’m going to get this compile done and stop looking to see what the excitement is.

  33. lprent 33

    insider: When I tried to get the IRD to change my gender in their records. From the incorrect female, to the correct male.

    I wound up with a separate record and after they noticed two people at the same address, I wound up being audited.

    Now that was the bane of my life.

    There are a couple of Lynn’s with different spellings around the blogs. Had at least one other getting annoyed with being confused with me. Easiest way for me to correct is to make sure people use the correct spelling. I’m not known as being subtle – I added Lynne to moderation so I could correct the spelling.

  34. insider 34

    Sounds like Kafka Lynn. Rather you than me (no offence)

    [lprent: None taken – you ever hear that song by Johnny Cash – ‘Boy named Sue’.
    It was character forming as a child and you do tend to grow up pretty mean. Perfect for a BOFH.]

  35. Dilip 35

    Lynn I think it is national importance when prime minister clearly signals she will take campaign to gutter politic. The prime minister smear on John Key yesterday was disgrace, and she got facts wrong. If this is what is to come then I am very saddened. I don’t think it will help Labour Party at all. I hope John Key stays positive. It shows how desperate Labour is that they do not know the detail of their own rail system but attack John Key on the same day it is announced road user charge will go up. Tomorrow the truck drivers will fight back.

  36. infused 36

    Well shit, didn’t this backfire…

  37. iprent – at least you now acknowledge that Helen Clark tried to smear John Key yesterday. To make things easier for you, and running the risk of being accused of link-whoring (just as well I have a thick skin eh!), all you need to complete your education on this matter is contained here:


    I suggest that you, in this order:

    * read the transcript of Q1
    * watch the 3News item

    This was a calculated, planned smear by Clark, aided and abetted by Winston Peters. If this is how Labour wants the election campaign to unfold, it is anything BUT a “minor” issue.

    PS – captcha = basket history – a prophetic word for the government?

  38. lprent 38

    dilip: I’d say it is a legitimate question. If Key answered it then fine. If he didn’t, then I’d expect the posters here to say something about it. I’ve seen the same question asked of ministers.

    The trucking question is a user pays question (I haven’t looked at it yet). From what I understand the road user charges haven’t gone up in 19 years? Morning report on way to work. From memory it is a rate per kilometre. WTF!

    Other road user charges have gone up – including mine. Why should I give the truck drivers a subsidy. Unless they can show that they cause less damage to the roads relative to cars than they did 20 years ago? I’ll bet that they can’t.

  39. Dilip 39

    I would like to see steve pierson do a graph on amount of money raised by government from road use including road user charge, fuel excise and gst on fuel and amount of money spent on roads. That would be very interesting.

    [Dilip. Labour introduced ‘full hypothication’ a few years ago – that means every cent collected in petrol tax, road user charges and other transport revenue is spent on transport infrastructure. National didn’t have that and was usng petrol tax to fund other services. SP]

  40. Matthew Pilott 40

    I like this, everyone says Labour have a deathwish; have ‘lost it’ when they are acting responsibly and not putting their party ahead of the country, by increasing RUC as required to fund the billions of dollars of roading that truckies profit from.

    And all you lot can do is gloat about how useless they are. Pathetic, a new low…

    insider, dilip, vto, Higherstandard, regarding the govt’s poor negitiating skills by only allowing Toll access to their tracks as maintained by ontrack – Please give it a little bit more thought!

    If they negotiated non-exclusive access for Toll, then the contract would be worth a hell of a lot less. There might or might not be competition on two or three lucrative routes, making the rest of them even less profitable. The service would be worse, and Ontrack would make even less profit. It’s a natural monopoly for a reason.

  41. bill brown 41

    Oh the wailing and gnashing of teeth:

    The prime minister smear on John Key yesterday was disgrace

    All trying to divert attention from the real questions:

    * What would the Nats do about KiwiRail?
    * What would the Nats do about ACC?

    Come on, I know it’s only human to jump to the defence of your mate John (if he really is your mate) but come on the guy’s the leader of the opposition not some guy you drink with in the pub – even if he’s trying to make you believe he is.

    To quote Gordon Campbell in Scoop

    Ordinary shareholders do not enjoy the privilege of using parliamentary written questions to extract information from which they potentially stand to gain. The timing of a decision to sell or to buy shares is an economic activity arguably more to the benefit of John Key, Citizen, than John Key,MP.

    Whether or not he or his trust happened to have shares at one or other specific exact time is not at issue, it’s that he was using questions in parliament to craft his investment portfolio.

  42. Dilip 42

    matthew road users more than pay cost of building roads just look at data. Funny how Tane says it is capital strike, not labour strike when 90% of commercial trucking fleet is small business. 90% of commercial trucking fleet is 1-5 trucks. This is not big business attacking labour government, it is small family business fed up with rising cost imposed by government. I have small business too and I see why the truckies are so angry and I support them. Please matthew don’t say road users aren’t paying their way, they are paying their way and they are all subsidising rail. On the same day we are told with kiwirail we will subsidise rail even more, we learn it is truckies who are having to pay the subsidy.

  43. bill brown 43

    Hey Dilip,

    Did the taxpayer subsidise the land your business is built on or did you have to pay for it out of your businesses profits?

    If you cannot pay for the resources you use to create your profits then your business is unprofitable and should close – It’s the market, man.

  44. insider 44

    The big miss in Gordon Campbell’s analysis is there was no gain to Key because written PQs and their answers are public.

    To imply that he either intended to or would get any benefit from an answer and then acted on such is just continuing the smear and says more about Gordon and his increasing lack of credibility.

    The answers to PQs are so vague and unrevealing (to even suggest the possibility that Key had an advantage is blithering stupidity or wilful ignorance.

  45. Dilip 45

    Road users do pay for cost of roads and more, much more than actual cost of roads bill. Road users pay cost of rail subsidy as well and are paying much much more for rail now that government has committed to pay one and half billion dollar for kiwirail, on same day they announce road user charge to go up.

    That is not fair and road users fed up paying for extravagant waste.

    [lprent: What a strange and distorted world you live in.
    The only cross subsidisation (that I’m aware of) between road and rail is (maybe) for mass transit. Ie getting people off the roads at peak hours. Someone will probably actually know rather than guessing as you are.
    You’re starting to look like a nasty mindless troll to me]

  46. Matthew Pilott 46

    dilip, give me the data if you have it, because what I’ve seen is billions going into roads that have to come from somewhere. I haven’t seen figures to show that excise and RUC more than cover it (because they don’t). And spare me the emotive drivel, whether it’s one truck of 100, they still have to pay their share of road improvement and maintenance.
    you know as well as I that all RUC goes into roading.

  47. bill brown 47


    So that’s a:

    b) attack the messenger

    Come on mate, smarten up! C/T is sooo last week!

  48. Matthew Pilott 48

    Dilip, I think you’re blatantly lying. Prove that RUC is less that roading expenditure, or admit that RUC isn’t a rail subsidy.

  49. Dilip 49

    Matthew look at tax outturn data. 1616million on road user charge and fuel excise in twelve months before road user charge raised. That is 836million in road user charge and 780million in fuel excise. All this data from treasury.

    Then look at expenditure appropriation for transport. $415million expenditure on maintenance of local road and state highways.

    Road users pay much more than cost of maintenance of roads and building of new roads. So where is extra money going? We know kiwirail will cost one and half billion to buy. That’s answer right there matthew.

    [lprent: That’s better – reduce troll rating.
    BTW: did you count building new roads? Pretty expensive as I remember – quite of lot of it going on. I have to work around it every day.]

  50. Felix 50

    Have I got this straight?

    Truckers, to show that they are paying too much to use the roads, are going to try to clog up the roads with trucks?

    Sounds like a great way to promote rail to me…

  51. Matthew Pilott 51

    Dilip – I just gave you stats. I’m not interested in what you say, because you’ve given me no reason to believe you. You mention $415 m on roads and highways.

    On the link I gave you the figure is $741m for State highway improvements alone (you didn’t say which year you’re talking about), plus $470m for State highway maintenance, and $226m for local road maintenance (so $696m vs your figure of 415). Then there’s $453m for emergency works.

    Give me some stats or admit you’re lying.

  52. Matthew Pilott 52

    Here’s the same for last financial.

  53. Dilip 53

    If you look at link you posted Matthew $2.4 billion comes from road user charge and fuel excise and registration charge. $325million of that already spent on passenger transport. Another 440million spent on transport safety, research and administration. So 765million already raised from road users, not including gst amount which is much bigger, is spent on items other than roads.

    This is before road user charge increase. There is no legitimate reason for increase except to pay for kiwirail.

    That’s problem with nationalising asset matthew. It’s all very nice being proud about owning new trainset until people think about who has to pay for it, and when narrow group of road users have to pay bill for trainset so it can compete with their own business they get very angry.

  54. Matthew Pilott 54

    You’re not aware of the extra billion or so in new roading projects announced a few days ago then – no cause and effect there…? Sounds legitimate enough for me – roans aren’t free.

    Road spending on passenger transport reduces congestion and makes roads usable, so you can’t deduct that from expenditure.

    Transport safety – clearly for road users; research and administration – also for the same, it’s for road users and nothing else. How else should expenses incurred by road users be paid – by non-road users?

    Do you expect to see every cent of excise and RUC spent on ashphalt? Then I guess you expect non-road users to subsudise crash barriers, road safety research and the administration and allocation of billions of dollars? No thanks.

    That’s the problem with people getting angry without knowing the facts – we’ve got streets blocked tomorrow because people just don’t know enough. Every cent taken is spent on road users (just don’t make the mistake that it has to be spent on ‘roads), this policy will not change.

    Let’s not mention your original stats…

  55. Matthew Pilott 55

    By the way, RUC revenue is forecast to increase from $800m to $880m or so next year. That’s about a 10% increase – now – weren’t RUC going up by even less than 10%? All that funding is allocated to new roads.

  56. Tane 57

    The privatisation tide is turning, from Wellington to Caracas

    I love it!

  57. r0b 58

    I thought you might!

  58. Swampy 59

    “not only did John Key help sell it in the first time and make a profit off the asset-stripping that followed. ”

    according to what evidence?

    Now to the rest of the article. We used to have a much bigger rail network once upon a time. A large amount of that network was closed under Government monopoly ownership because it could not make money. Sound familiar?

    There is no difference between the situation of the Government closing down large chunks of rail in the 50s, 60s, 70s, 80s and 90s, and the present one except for that all important political factor and that is that Labour is in power at the present time and can shift the goal posts and try to persuade public that things are somehow different.

    In certain areas there is very little local traffic and competition not only from road but sea as well. Christchurch to Picton is a case in point, and even more importantly, the line took more than 70 years to build. It was not until 1945 that the route was completed near Kaikoura. If you know anything about rail in this country, it is that most of the major rail routes in NZ opened much earlier. So far as that route goes, there was no compelling need to have a rail operation because most of the South Island freight went by sea and there was (and is) no significant population living north of Christchurch. It was completed by politicians who had no conception of whether it would be economic to operate. It is because of routes like that, and competitive modes, that rail loses and has always lost money in NZ.

    Rail is not always more efficient than other forms of transport. Sometimes road is more efficient than rail, or vice versa.

  59. Swampy 60

    Matthew Pilot,

    Labour announced a very expensive roading plan in 2005, which coincidentally happened to be election year. This was funded by sucking $800 million of capital out of Meridian Energy.

    The funding of Kiwirail purchase in part comes from another $150 million or so siphoned out of, yes, Meridian Energy again. That money has come straight out of electricity consumers’ pockets. Think about that next time you hear about a power price rise.

    Just because a billion dollars in road projects have been announced does not mean it is necessary. The fact that the government has a road building monopoly means the political facts of this roading programme are well concealed.

    Why are we building more roads when rail is supposed to be the great saviour of our transport network woes.

  60. Swampy 61

    Matthew Pilott,
    “I like this, everyone says Labour have a deathwish; have ‘lost it’ when they are acting responsibly and not putting their party ahead of the country, by increasing RUC as required to fund the billions of dollars of roading that truckies profit from.”

    What’s wrong with them making a profit?

    The government always has plenty of money to throw around when it suits them. It just doesn’t get called a profit, it is called a surplus or some other more politically acceptable name.

    That is called free enterprise, that Annette King showed she had no regard for. When she was challenged about imposing the increase immediately she said that companies would bulk buy RUCs in advance and therefore have an unfair advantage and that the government would get less money.

    The opposite view is that a significant number of small trucking firms could go to the wall being unable to immediately recover the increased charges from their customers.

    Which is more important? The first view is that the Labour government is more important, the second view is that private sector business is more important.

    It’s natural as to why the government would choose the first option, if they don’t care about private business going bust. But if the point is made that the government wouldn’t really miss a small one off loss in RUCs, then a whole different perspective applies. Then it becomes much harder for Annette KIng to claim the moral high ground, and she starts herself to look a lot more like we are supposed to believe the private sector trucking firms are motivated.

    The reason we have a roading system where direct user charging is not actually applied in a transparent way is because Labour would never agree to anything that reduced their control of the roading system. National has been down the road of looking into exactly such a policy.

  61. vto 62

    true true, the manner of implementation is such that it may unnecessarily send some of our roading infrastructure to the wall (the private small guys. owner-operators). especially in these tender times.

  62. vto 63

    these times are tender. and there would be votes in soothing that tenderness…

  63. Kevyn 64

    SP, In your reply to Dilip you stated “Labour introduced ‘full hypothication’ a few years ago”. What Labour introduced was only de facto hypothecation. The Bill to introduce proper hypothecation was only voted on in Parliament last night and I’m not sure if the hypothecation clause was included in the version of the Bill that came back from the select committee, but there was no mention of hypothecation in Cullen’s latest budget. The problem with the de facto hypothecation is that the distribution of funds is decided by Cabinet rather than by technorats and Cabinet has decided to ignore the recommendations of the National Road Safety Committe in favour of “solving” peak period congestion in Auckland and Wellington (and targetting boy racers in Christchurch). Hence we are on target for 420+ killed by our roads this year instead of 120. All because we let politics and psuedodemocracy get in the way of good governance.

  64. Kevyn 65

    Good grief! Why all the huffing and puffing about what roading revenue gets spent on what land transport areas? Use the net, look it up! It’s all here, possibly in more detail than you want though:


    Or if you are historically minded you can even try this one and see if you live in one of the four lucky regions receiving more highway investment than they got from Mr Savage’s great government.


  65. Matthew Pilott 66

    Swampy – that’s bollocks. Give me a shred of evidence that the cost increase could put people out of business. For example, since diesel has gone up (without warning) by 80% over the last 12 months, show me the 80% of drivers out of business.

    I am stoked if truckies can make a profit, so long as I don’t subsidise them myself. If you don’t have a problem wth that, can you send me a cheque? I could do with a top-up myself!

    Kevn – I’ve been saying the same thing actually, it’s all there, every cent being spent on roading related interests.

  66. Kevyn 67

    Iprent “Unless they can show that they cause less damage to the roads relative to cars than they did 20 years ago? I’ll bet that they can’t.”

    How much are you willing to bet? Before you answer you’d better track down the OECD’s DIVINE study policy recommendations or the technical reports.

  67. Kevyn 68

    Matthew, Sorry if I got a bit confused who was saying waht in your debate with Dilip.

    IMHO it’s drawing a bit of a long bow, in light of the BART@20 studies (UCTC.net) to describe public transport as roading related.

  68. Swampy 69

    July 3, 2008 at 9:42 am

    Natural monopolies need to be either strongly regulated or in state ownership.”

    Why state ownership, is there any evidence that the state is a better owner than the private sector? I don’t believe there is.

    I certainly don’t believe any of the reasons put about by the proponents of this renationalisation. Far far more railway track has been run down and ripped up by the government than Toll was ever considering.

    The fact is that the NZ rail network has a few profitable bits and a few real dogs like Napier to Gisborne. And that loss making line was going to be closed down by the Railways in 1988 because it was a dog, but then a subsidy was found from the Labour government to keep it open.

  69. Dan 70

    But we subsidise road transport as well. That is why the Road user Charges have been put up. Mr Average NZer has subsidised trucks for years.
    The logic of this truck protest is a nonsense and only understood when you realise the ex nat Friedlander is behind the beat-up.

  70. Swampy 71

    “Steve Pierson
    July 3, 2008 at 9:46 am

    so, the righties are now calling for heavy handed regulation of a private company? You agree we don’t want those lines shut down so why not just buy the company and be done with it, rather than keeping on paying tens of millions a year in subsidies to a aussie profit-making outfit and using the blunter tool of regulation to try to get it to behave?”

    I’d love to know how many voters out there really care that it is an Australian company, like, the voters who work for companies that sell products and services in Australia for example.

    There’s nothing wrong with profit either. The government has been very much out there in pushing the line that they are not seeking to make money from it, in order to try to claim the moral high ground and all. This is an irrelevant nonsense. It makes no difference whether the government makes a profit from something or not. They make profit from certain SOEs, and others they just operate as political wells of favour. Government entities only have a small amount of imperatives such as service, and a large part as political causes and motives. That works out the same irrespective of whether the government entity makes a “profit” or not.

  71. Swampy 72

    :Steve Pierson
    July 3, 2008 at 10:01 am

    HS. yes, but Toll was going to stop running trains on those lines, then ONTRACK would have had the choice of continuing to maintain tracks that were no in use and for which it had no revenue stream, or abandoning them. I can imagine vto’s ‘gut reaction’ if ONTRACK was maintaining tracks that no-one was using.:

    ONTRACK does maintain tracks that no one is using, as it happens. They own a few closed routes with most of the infrastructure still in place and they are fully liable for maintaining them for public safety, weed control and the like, just as they would be if they were operational.

    Now, I’m going to turn the clock back a few years to the track buyback and specifically the petition that the rail unions organised in favour of it. The line put about at the time was that other operators could always come in and run the services. Funny, no one ever suggests any other operator as an alternative to Toll except for Ontrack taking over the services themselves as they have effectively done.

  72. Swampy 73

    July 3, 2008 at 10:06 am


    Might be just me but wouldn’t it have been a cheaper option to subsidise Toll and offer incentives to get freight and people to use these lines ?”

    Yes HS, that is effectively what was in place before when the Track Access Charges were not being funded by Toll and the minimum freight requirements of the National Access Agreement also applied.

  73. Swampy 74


    Toll had only a monopoly on areas where they could meet minimum freight targets, they had to give up the monopoly if those couldn’t be met.

    The monopoly was signed up to by the Labour party when they bought back the rail tracks from Toll.

  74. Swampy 75

    July 3, 2008 at 10:22 am

    hs: Yes but toll as the only rolling stock operator wasn’t willing to pay rental on parts of the network – ie what was required for maintenance.

    The only real options would have been to shut down those parts of the network or find another operator. Since Toll were in a natural monopoly position and were cherry picking the most profitable parts of the network, another operator wasn’t viable.”

    Toll only got a monopoly on sections they kept in operation.

    That “natural monopoly” was agreed to by the Labour Government of Helen Clark and Michael Cullen when they agreed to repurchase the tracks for $1 from Toll Rail in 2002.

    So, other operators could have been brought in to run the routes that Toll didn’t want to operate.

  75. Hey Swampy – that sounds like misdirection to me. You seem to be running an argument that all that was needed was competition – I’d be interested to hear how would you would realistically introduce that.

  76. Swampy 77

    You’ll have to ask the RMTU what they had in mind back in 2002 or so.

  77. Swampy 78


    People are questioning (and so they should) where the money is going when LTNZ is not just funding roads, they are now spending money on coastal shipping and rail.

    Likewise the government has passed this law for a regional petrol tax to fund programmes like rail in Auckland.

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