ToryAid: Wastewatch (3)

Written By: - Date published: 11:59 am, June 24th, 2008 - 65 comments
Categories: national, slippery, tax - Tags: ,

In response to the UMR poll that shows 60% of voters would not want tax cuts at the expense of public services, Bill English says “under any tax plans we might have government spending will continue to increase* but [we need] more effective public services in tougher times”

Notice, they are already preparing the ground for using the economy downturn as a justification for cutting public services and later backing out of any commitments they make now. The main message, however, is still ‘we’ll cut waste to fund tax cuts’.

So, how is National going? Any meaningful tax cut will have to be $20 a week per person more than what Labour has offered. So far they’ve identified the following ‘waste’:

1) Embassy in Sweden – approx $3 million capital, $3 million operating (why it’s not waste)
2) Badges about Te Reo for school kids – $56,000 (meh)
3) TPK hui – $240,000
Why it’s waste – Maoris spending our money on talk-fests!
Why it’s not waste– TPK creates policy to help our largest disadvantaged population. It needs to consult heavily with Maori within their cultural context to develop that policy and get buy-in from Maori leaders. Further, like any national organisation, meetings of staff from different regional offices are necessary from time to time for effective work. The individual meetings are actually extremely cost-effective. Much cheaper per head than you would expect from the private sector.

Cumulative total of National-identified ‘waste’: 2.1 cents a week or, 1.5 grams of Mainland Mild cheese a week.

*[of course it will, inflation insures that, but will it increase in after-inflation per person terms?]

Thanks, Ash, for the upgraded Waste-o-meter.

65 comments on “ToryAid: Wastewatch (3)”

  1. erikter 1

    “TPK creates policy to help our largest disadvantaged population. It needs to consult heavily with Maori within their cultural context to develop that policy and get buy-in from Maori leaders.”

    And the results are? More failure across Maoridom than ever, reflected in a record number of qualified Maori people leaving for Australia, the highest percentage of any other ethnic group in prison, dismal examples of child abuse, rampant crime, participation in gangs, welfare dependency, etc.

    What has TPK achieved? Other than a neverending talkfest and bottomless use of public funds?.

    Where is the accountability? Where are the Maori leaders?

  2. erikter. I can’t be bothered providing the evidence to refute each of your assertions because you’ll do what you always do – run away from your initial claims and make equally silly ones until I get bored.

    So, how about you instead provide us with the evidence to back up your claims? And then I’ll show you why you’re wrong.

  3. BeShakey 3

    In their favour the Nats have also said they won’t employ any more bureacrats in their term (although as they role out more policy that becomes less and less believable). If you make the unfairly generous assumption that without this the public service would have continued to grow at the same rate, you could figure out how much would be saved.

    On the negative side, as they role out more policy their spending promises increase. Simon Power just promised a new prison in the first term(anyone want a wager that it won’t happen?). It would be relatively easy to figure out what the capital and operating costs of that would be. Even if you grant them the genrous assumption that they would build and run it much more efficiently than anyone else has. And for all you ‘let business run it, they always do it more effectively’ folks – he ruled out private prisons, but wanted to look at contracting out the operations. My rough estimate would be that this one promise would eliminate ALL of the identified waste (including ensuring capping the public service).

    Captcha: denounced time (and its about time too).

  4. erikter – it almost sounds like you are happy about those negative statistics that you cite – as “proof” that TPK is a waste of money. If you going to cull TPK, why not spend the money saved directly addressing those statistics, seeing as you are concerned at the present “outcomes” of the current strategic policy direction?

    Or, are you only highlighting this because any funding for Maori culture is something you consider “waste”?

  5. the cap in the public service is meant to save half a billion over three years, that works out to a 50 cent tax cut

    captcha: ‘denied women’, just like the National candidate selection process

  6. Skeptic 6

    You’re making things up again Steve.

    National party members have democratically selected Nikki Kaye, Amy Adams, Louise Upston, and Hekia Parata, who will are all new candidates who will be in Parliament in a few months time.

    Contrast this to Labour. Which new candidate has Labour selected who will enter Parliament this term, let alone a female one? That’s right. A big, fat, ZERO!

    Add this to the exciting range of diverse National candidates who will also be in Parliament: Kanwal Bakshi, Simon Bridges, Mita Harris, Sam Lotu-Iiga, Ravi Musuku and Paul Quinn. All of them democratically selected by local members, rather than getting imposed on them by head office.

    That must really annoy you. No reason to make stuff up though.

  7. Joker 7

    $56000, $240000, $3000000, $500000000. When you have your snout in the trough maybe these are piffling ammounts but to most people they are enormous.

    This is the publics money and treating any waste with the derision that is shown here( it’s only $56,000, meh, its only 50c a week, meh!) is the kind of behaviour a large proportion of the electorate are finding unpalatable about the Government at the moment.

    There is always waste in big operations I hear you say. That maybe so but it doesn’t mean that when it is highlighted you should endlessly engaged in pompous scoffing at the ammount.

    [They’re not piffling amount to me, they are piffling amounts to a country of 4 million people. National says they will fund their tax cuts out of this ‘waste’ (which I don’t think is waste, apart from the badges) so it’s only fair that they have the waste they list counted up for them to see what kind of tax cut it’s worth. I know you and National don’t like the debate being brought into solid facts and would rather keep it in etheral terms (‘it’s our money!!!’) but government is serious business and decisions should be based on actual information, not slogans. Also, show me $500,000,000 a year of waste and things will start to get interesting – that’s $3.19 a week, you would be 16% of the way to the target! If you could find that $0.5 billion, of course SP]

  8. Steve: surely the waste in the $240k TPK hui was that it was held in the South Island at a four star resort when most of their staff are Wellington based ? I see they have mended their ways and further hui will be held in Wellington. You are seeing racism where there is none.

    [Byran, the $240K is not the price of just one hui but many. The one you are talking about in Queenstown cost $14K for 44 people, $320 a head. SP]

  9. James Kearney 9

    Which new candidate has Labour selected who will enter Parliament this term, let alone a female one? That’s right. A big, fat, ZERO!

    Clare Curran.

    Oh and I think he was joking – obviously a sore spot for the Nats judging by your response.

  10. Vanilla Eis 10

    Skeptic: A bit ahead of yourself there, on account of no election results released yet – or do you know something we don’t? And Hekia Parata isn’t a ‘new candidate’ – she ran last election, and lost. She missed out on getting in on the list by one place if I remember correctly?

  11. Tane 11

    Hekia Parata also ran in Wellington Central in 2002 and was defeated by Marian Hobbs.

  12. Pascal's bookie 12

    Skeptic also forgot to mention Terry Heffernan in his diversity list. Social Crediters are an oppressed minority!

  13. Skeptic 13

    Clare Curran won’t win, James, if David Benson-Pope and half of her Dunedin Electorate Committee have anything to do with it. Looks like Labour will split in half down there.

    Vanilla, I don’t know anything you don’t, but I do know something that the Standard and the PM and the rest of the labour party hacks are publicly denying: that your beloved socialist party is toast.

    Yes yes, Tane, Hekia has been a candidate before. But she will be new blood in Parliament when National sweeps to victory in four months time. Unlike Labour which won’t bring in any new women.

    Funny how James didn’t have the temerity to mention Labour’s new Maungakiekie candidate, who also happens to be a senior unionist. Sam Lotu-Iiga’s going to deliver her a big pink slip on election day, too.

    I’m quite sad that the labour party is in such a sorry state. Maybe in six, nine, or even twelve years you might be able to regain some electoral dignity.

  14. Steve: “Byran, the $240K is not the price of just one hui but many. ”

    Yes I f**ked that up 🙂 The principle remains the same, why fly/drive people to a resort when the same outcome can be achieved locally at the much less cost ? It’s an attitude of waste that needs to be corrected in the public service.

  15. Vanilla Eis 15

    Skeptic:

    #1: not ‘my’ socialist party. They didn’t get my vote last time, and they probably won’t this time. Nothing personal, I find Helen to be an astute political manager and Cullen gets the tough stuff done. I have sincere doubts that Key will be any more than a mouth for the National Party come 2009, and would much prefer to see Helen in charge. However, this is MMP my friend, say goodbye to two-party politics. I’ll split my vote how I see fit, again.

    #2: The election is a long way away. Polls in 2005 showed Labour to be far, far behind only a month out and yet, somehow, they’re in power. All the political lecturers at Vic have been quite open in saying that National need to beat Labour by more than 10 points to shut them out for sure, and that the NZ electorate won’t let any party govern alone. That might not sound like much to you, and no one can be right all the time, but these people know considerably more about politics, especially NZ politics, than pretty much anyone else in the country.

    Captcha: Green wages.

  16. “Sam Lotu-Iiga’s going to deliver her a big pink slip on election day, too.”

    I’d be willing to wage a significant sum of money on that claim. Are you willing to back you up your bullshit, Skeptic?

  17. Byran. Because they’re not all in the same area.

    And, if you’re now at least conceding these hui are worthwhile, then wherever you have them there will be a cost. At best, you are talking a marginal reduction in $240K. Get some perspective, the Government spends $167 million each and every day of the year on average on this country of 4.2 million people.

  18. BeShakey 18

    Of course the beloved private sector could do it much better. They are notoriously frugal when it comes to staff getaways.

  19. Skeptic 19

    Polls didn’t show any of the sort, Vanilla. They showed a couple of points difference between Labour and National. They were pretty much neck and neck in the last few months leading up to the election.

    I agree that if Labour get within ten points of National within the next two months then National should be worried. But there is only four months to go. Labour are 23, 24, and 25 points behind in recent polls. They have already delivered the budget. That was supposed to deliver them a boost. It didn’t. There’s normally a lag between budget and poll boost, but not this long.

    Labour has already played all its cards. The electoral finance act is the gift that keeps on giving to National. Especially with the revelation that party logos are now to be considered election advertisements.

  20. Vanilla Eis 20

    Skeptic: Agreed, the Labour party is suffering a lot more from the EFA than National, but it’s not over yet.

    Why do you think National are polling higher after the Labour budget? My thoughts are something like this:

    Labour has offered you a $16/week taxcut.
    National “will offer more when the time comes”.

    Who would average Joe be inclined to vote for, on current evidence? Well, if taxcuts were your button then you’d be a fool not to claim National and see what they offer. (Of course, a very smart and coordinated electorate would plump for Labour in polls, and try to force even bigger tax cuts out of National, because their attitude at the moment is ‘whatever it takes…’ and what it’s taking is…. well, vague promises and Sweet Fanny Adams else. We’re bought easily it seems.

    Currently there is absolutely no policy with which to compare the two parties. If you seriously think that National are going to hold a 25 point lead, and see that converted into seats, then you might want to rethink.

    I look forward to solid policy announcements by National, in their own time.

    And sorry, you were correct re: polling. Faulty memory kicking in there somehow =/

  21. Skeptic 21

    As long as you’re asking for the Nats to come up with $3 billion a year of waste Steve, here’s a challenge to you. Show how the additional $3 billion a year, every year, for the last eight years has provided VALUE to the taxpayer. Because that’s how much money labour has taken from taxpayers. Yes, an extra $3 BILLION. Every year. Which means Labour is taking more than $20 billion more now from taxpayers than it did in 2000.

    Show us the value. Are we getting much better health services? Much better education services? Has violent crime halved? We know unemployment’s halved, because it was tracking downwards since National put the employment contracts act into place. But have the savings from lower unemployment led to lower welfare spending? Are we getting much better value from tripling foreign aid expenditure? Has tripling the number of spin doctors in the prime ministers’ office and ministerial services led to a better delivery of services to taxpayers?

    Oh that’s right. The answer is a big fat NO to all of that.

    $3 billion savings is piffling. I look forward to National becoming government and publicising every line item of public service expenditure and running a big black line through the waste. As long as we’ve got spin doctors lying to us about how well government departments are doing while spending our money hand over fist, you can’t say there’s no money to be saved.

  22. Steve: I understand that most employees of TPK are based in Wellington.

  23. Skeptic 23

    I guess the major difference Vanilla, as this government has shown over the last eight years, is that they don’t actually believe in tax cuts. They are only doing it now at the worst possible time in the economic cycle because they’ve had their hand forced.

    The difference is that National believes in ongoing tax cuts. It’s not just the difference between sixteen dollars now from labour and twenty dollars now from National: it’s sixteen dollars total from Labour in three years (if they don’t reverse their tax cuts) and fifty dollars total from National in three years; sixteen dollars from Labour in five years or a hundred dollars from National in five years.

    National believes in lower taxes. Labour doesn’t.

    In the wider scheme of things the size of tax cuts for 2009-2010 is irrelevant. It’s whether the public wants a much smaller government (I say less bloated, but for the sake of a civil debate I’ll remove the rhetoric) in five to ten years, or a much bigger one.

    This is going to be a sea-change election, which we only have once in a generation. National’s not going to move rapidly or lurch dramatically to the right, but they will begin to frame a long-term view of New Zealand over the next three terms of government at least. Just as Labour didn’t lurch dramatically to the left in 1999. It took them nine years to increase government spending to the level it is now. It will take quite a while to pare it back again.

  24. r0b 24

    $3 billion savings is piffling. I look forward to National becoming government and publicising every line item of public service expenditure and running a big black line through the waste.

    Sceptic, are you like, 17 years old or something? Do you even remember the last National government? Tuku’s undies became the mascot for the dysfunctional culture of National government waste. Why should it be any different this time? It’s the same old Hollow Men on the front bench.

  25. lprent 25

    Skeptic: To paraphrase yourself. Perhaps you should leave economics to those who understand it. Because you don’t. Your description doesn’t make any sense.

    Perhaps you should read some Keynes rather than supply side theories that never worked any time they have been tried.

  26. Vanilla Eis 26

    Skeptic: And thats where we differ in opinion. Personally, I don’t think the public service needs to be ‘pared back’ – it’s still smaller than it was under the fourth Labour Government, and it took 9 years to build it up after being gutted by the National Governments of the 90’s.

    As for tax-cuts… Well, agree to disagree I guess. National haven’t promised any of the things you mention, they just allude to them – but you seem to be convinced. I’d love to see how they’re to be paid for.

  27. lprent 27

    Skeptic: Idiot.

    Show how the additional $3 billion a year, every year, for the last eight years has provided VALUE to the taxpayer.

    Flip that – you prove that there are better alternate investments rather than blowing crap from your fingers.

    Have a look at the government debt reduction over the last 9 years. Then figure out the interest payments projected forward if the principal wasn’t paid.

    Now find me an alternate investment that pays me more then paying back that 70’s and 80’s debt at the same or better level of risk. Start at 1999, and use a NPV calculation for alternate projects.

    The key word here is risk. Every project you look at will carry a higher level of risk on the level of return. So you discount the risk levels.

    If you actually had sufficent nous to do this, then you’d find that the best investment NZ could make was to kill that debt and its interest burden. Hell I can remember a time when the annual interest only was the biggest single cost in the government budget.

  28. “It’s not just the difference between sixteen dollars now from labour and twenty dollars now from National: it’s sixteen dollars total from Labour in three years (if they don’t reverse their tax cuts) and fifty dollars total from National in three years; sixteen dollars from Labour in five years or a hundred dollars from National in five years.”

    Skeptic. If the Nat’s tax cuts this time are only $20 vs Labour’s $16, they will be humiliated – they have to cut $20 more than Labour has and whwere would they find the money for that?

    And could you show me where we could cut the $15.6 billion a year in five years’ time that you are talking about when you say $100 a week tax cuts? That’s a quarter of government spending.

    Also, bear in mind that half of people pay less than $100 a week in tax now.

  29. Skeptic 29

    You seem to have forgotten Steve the rationale that your beloved Labour Party is using for justifying tax cuts now: that they are suddenly “structurally affordable”. This is the same structural surplus that has come about through tax bracket creep. An additional three billion dollars every year for the past eight years.

    A national government only has to hold the line on government spending, not spending any additional money without reprioritising existing, and it can return an additional $3 billion a year, every year, to taxpayers. That will get you $15 billion effective annual tax reductions by 2015.

    lprent: I didn’t say debt reduction was a bad thing. It was Ruth Richardson in 1991 who brought the lid down on ballooning government debt, incurred during Muldoon and throughout the fourth labour government of which your adored Helen Clark was deputy prime minister. Crown debt was at crisis levels by 1990. It was manageable and at prudent levels by 1999. But you’re confusing debt to pay for operating expenses as was incurred throughout the 1980s and prudent debt for infrastructure.

    There’s no reason why the government should pay for all roads, which will last for thirty years, out of current surpluses. That is economic madness. It places all the cost burden on the current taxpayers. Investment in infrastructure can be paid for in a number of ways: through surpluses, through crown debt, through private sector investment, or through a mix of all three. National’s broadband initiative is a case in point: if National blew $1.5 billion from the operating balance on its broadband initiative in one year, then it would have $1.5 billion less to deliver in tax cuts in one year. But it won’t because it’s a capital item. The debt servicing cost for that level of debt is $120 million. That’s about a quarter of our annual aid budget, and will deliver far more to New Zealand’s economy than pumping half a billion dollars to the Russian mafia who own that country’s forests, just to make us feel better about being greener than everybody else.

  30. Matthew Pilott 30

    Hey sceptic, I have a really good idea. Now that there’s a bit of a technical recession going on, why don’t we dig out a National party policy of benefit cuts – that will really help out. A sea-change election for the right would need to be at least two generations removed from that inept display.

    You really seem to believe what you write, which is interesting, given you seem to follow the same failed tory policies of the 90’s and want to restrict spending now that the economy is tight, thinking that this is the worst time possible for tax cuts.

    Funny that the right is economically inept and thinks that the only reason we have tax cuts coming up is expediency and that the government doesn’t believe in them (which is a stupid statement in of itself. Do they not believe they exist from an epistemological standpoint? Not think they are effective? Effective at doing what? All the tories can do is frame a debate around meaningless and empty thought-bubbles. A leaf out of Key’s book.) as opposed to realising that it can make good economic policy at such a time.

    An example of bubble-headed debate: “National believes in lower taxes. Labour doesn’t.

    Lower than what, Skeptic? Now? So what then? That could be 1%. Maybe another half a percent? Will that be better? Lower than the US? What then? Lower than Somalia? They have a tiny Government. Small government good, big government bad? Lower than Dubai? And might there be a reason for lower taxes in some countries, some repercussions? Na, screw that, I’m just going to make an empty statement because being a National supporter, I’m all for sound bites.

    Skeptic, if Key had come out and said that he would do a quarter of what you valiantly claim on his behalf I would understand. Disagree, but understand. Yet National would raise taxes now if that’s what it took for them to get power – instead of worrying about Labour reducing taxes when it’s prudent, I’d worry about National’s wholesale subsumption of left policy for pure expediency. Why you think these hollow people can believe in anything is beyond reason.

  31. Joker 31

    Matthew,

    I really got the feeling that you were crying as you wrote that.

    Unfortunately in reasoning terms you come across as the blogging equivalent of a suicide bomber.

  32. Skeptic 32

    Matthew if National is merely subsuming left policy then you’ve got nothing to worry about.

    Oh, wait, except that’s not what is happening. National’s broad policy goals are dramatically different from Labour’s, which you know, and I know. You’d just love to see National lay it all out on the table now and try and ram its policy prescription through in one term. Except National knows that it’s got at least three or four terms of government ahead to improve New Zealand. That’s plenty of time to get rid of the socialist rot, whittling back the waste in government and creating an environment where New Zealanders can keep more of what they earn.

  33. Skeptic.. bracket creep is not $3 billion a year. For that to be true, wages would need to be rising at an astronomic rate. It’s been only a few billion in total over 8 years. You’re thinking of the total nominal increase in revenue each year, which comes from inflation and more people working for higher wages.

    Moreover, the Budget spends the bracket creep up until 2011.

    Also, you say the government should borrow for capital spending, guess what it already is. The revenue the government will be taking in ove the next four years will only cover operating spending, capital will be borrowed for. That was clearly explained in the budget coverage.

    There is no surplus in the Budget through to 2011, so where is the extra money for National’s $3 billion tax cuts going to come from? Let alone your fanciful $15.6 billion a year cuts.

  34. lprent 34

    Skeptic: You say infrastructure, and I say “Think Big”. That was the infrastructure passed to my generation to pay for.

    If you want roads now – then pay for them now or within a short period. There is nothing that indicates they will be of much interest to the kids 20 years asway. They have a high likelyhood of becoming as much of a white elephant as the the gas to gasoline project.

    That kind of stupid “pass the payment to the children” ideas needs to go through a bloody good risk analysis. Preferably with a supreme court judge acting as a veto casting vote for the grandchilren.

    I didn’t like the white elephant infrastructure projects that got foisted on my to pay for. I can’t see any reason to foist them on other kids when they hit adulthood.

  35. T-rex 35

    Lynn – This is reminding me of the platform that Homer ran on for waste superintendent: “Can’t someone else do it?”

    Why internalise costs when you could instead pass them onto someone else! That’d be CRAAAAAZZZZyyyyy

  36. Skeptic 36

    That’s right, lprent. Every motorway built in New Zealand in the last fifty years has become a white elephant. Why, just this morning at rush hour I was the only person driving down the Northern motorway to work. It occurred to me then and there how much the government has been blowing money away building roads that nobody uses.

  37. Joker 37

    The Clyde Dam was a waste of time as well. Thats 400 MW that we don’t need at the moment.

  38. Skeptic 38

    In fact, every power station built in New Zealand has been a waste of money. So too was the construction of the national grid, all paid for through government borrowing money to pay for it. Oh, and the telecommunications network? That wasn’t paid for from existing surpluses.

    In fact, lprent, your argument is so overwhelmingly brilliant and obvious it’s astonishing that debt isn’t outlawed for every government, business, and individual on the planet. From now on, people should only be allowed to buy houses with cash, and not rely on mortgages to allow them to gradually pay off the debt during the lifetime of their use.

  39. lprent 39

    Sure there are projects that have paybacks with low risks. Hydro power generation is like that. That would be something that could be passed forward.

    Motorways at this point would appear to have a high risk factor, unless you can tell me now what the fuel source and price for personal transport will be in 20-30 years? You don’t know, I don’t know. Why pass the risk down the generations.

    Rail upgrades? Now that is a far better risk because we have known alternative technologies. Hell if we had to we could go back to wood burning.

    What you children(??) fail to look at it is risk as a assessment system. It is the core of all market systems from fiancial instruments to engineering an aircraft. The risker something is the higher the return you should reasonable expect to earn from it.

    If you cannot quantify the risk – then it is incredibly risky and has to have a incredible rate of return on investment. If you follow that pronciple you can avoid being taken to the cleaners by slippery snake oil salesmen

  40. lprent: “There is nothing that indicates they will be of much interest to the kids 20 years asway.”

    Really ? Have a look at GM’s range of hybrid SUV’s. Do you really think that car manufacturers are going to let their businesses go down the toilet ?

  41. Matthew Pilott 41

    joker, I wasn’t crying, and I’m not sure how you got that. Did you, like, read it reallyreallyfast? We’re not all quite as emotional as you, y’know, but if you think that was the equivalent of a ‘suicide bomber’ then you’re really green aren’t you? You must stick to the nice blogs – good for you (stay away from kiwiblog, it might make an emo like you want to hurt yourself).

    Can’t help but notice there wasn’t even one real rant or swear word in there, but if all those questions I asked hurt your head then maybe you’ve come to the wrong place, maybe a blog isn’t the best place for you sensitive types. You should go and talk about boys you like or Paris Hilton on bookface & bebo instead (don’t forget to have an adult supervising, if you’re under 16!).

    Anyway if you want to attack my reasoning as opposed to being a patronising little $#!^ you’re going to have to do better than toss around a few empty comments, or you’ll make Key’s blank grin look like Churchill’s glare.

    Skeptic:
    National’s broad policy goals are dramatically different from Labour’s, which you know, and I know

    No. You assume, and I get worried. Given their broad and erratic changes of direction over the last few years I honestly don’t know why you would support them, unless you really like a cheap soundbite in place of policy. You have a lot of faith in a party that shows sweet f-all faith in the electorate to support its ideas. Why is that, do you think? Why do you think it would need over a decade for National to start to be honest with the electorate about what they want to achieve?

    That’s plenty of time to get rid of the socialist rot, whittling back the waste in government and creating an environment where New Zealanders can keep more of what they earn.

    Don’t you mean that’s plenty of time to make some nice speeches, lay out a few warm fuzzy platitudes, and then implement some policy that will be socially disasterous and be ousted after one term, at best?

  42. Skeptic 42

    Sounds like a very good reason, lprent, to allow private investment in roads. Let them take the risk. If you’re so concerned that people won’t be using roads in 30 years (about as absurd as you can get), then you’re actually coming up with bullshit arguments. Not that I’m surprised.

    So you’re certain that rail is an ideal form of transport that will remain over the next 30 years, but alternatives such as shipping, roading, and air won’t. And since you’re gambling that other alternative fuels won’t be available, or that oil will run out in the next thirty years, you’re actually gambling huge amounts of taxpayers money to get yourself a train set.

    Fibre communications, however, are very risky, aren’t they? The chances of them being in use in thirty years is very low, isn’t it? I love it how you seem to ignore the biggest actual think big and overcapital investment by government in the last hundred years–the new zealand railways system–and come up with a spurious argument for buying it back.

  43. lprent 43

    Bryan:

    Are they in production now? Can I buy one now? What price are they now?
    What price will their fuel be in 20 years?

    Basically if you cannot point to something being available now then there is a major risk associated with using it for planning.

    As an example let us assume that one too the confident prediction of the widepread availability of fusion energy from the mid-1960’s into account for planning. We wouldn’t have built any hydro plants would have we? Fusion would be incredibly cheap by the mid-90’s on the mythical 30 year ‘engineering’ timeframe.

    captcha: Eyebright con
    Haven’t heard to that one – just the “get the children to pay for it” con.

  44. lprent 44

    Skeptic: I’m a great believer in paying for things using minimal credit. Organise to pay for things in as short a time as possible.

    That is how the auckland northern motorway has been financed. Yes there is a debt component, but it will be paid quite fast. In other words is being paid for the people who are driving now via their taxes.

    The PPP stuff I don’t find particularly interesting. In virtually every case study I’ve seen, the risk is stripped from the investment and pushed into the public rather than the private side. That appears to be the only way the the public can get a private partner in taht type of investment.

    Look at the saga of the new motorway tunnels in sydney. Hey the traffic is lower than expected and the public winds up paying for the risk.

  45. Skeptic 45

    Oh, I get it, Matthew. You’re referring to National Party flip-flops. Maybe you didn’t get the missal from the ninth floor. Flip-flops are an embarrassing expression for Labour to use nowadays. You know. It just reminds voters of everything from closing the gaps, to getting to the top half of the OECD, to not cutting taxes, to the knowledge wave, to the fart tax, to the sustainability economy, to the carbon credit that turned to carbon deficit, to “Phillip Field is guilty of nothing more than being helpful” to the “Labour would not support banning smacking, of course not, it would be unnatural”.

    See anybody can play that game. National’s playing the long game now and it’s pissing Labour off because they’ve got nothing to counter it with. National’s looking towards four or five terms to implement its policy programme. Labour would love to scare the pants off the voters by telling them they’re going to see massive, sweeping, immediate and brutal change. But that’s not going to happen.

  46. Joker 46

    Matthew,

    Not 100% sure what you were going on about but I think you were trying to imply that I was a 16 year old girl…anyway good come back.

  47. Skeptic 47

    Nice cherry-picking, lprent. You might want to have a look at the whole of private sector involvement in roading projects across Sydney. $2 billion of investment, of which 75% has come from the private sector, building the road link around Sydney. It’s been so overwhelmingly successful that even the Australian Labor Party is heralding it.

    http://www.alp.org.au/media/0407/spetran120.php

  48. lprent 48

    Skeptic:

    National’s looking towards four or five terms to implement its policy programme.

    What programme? A couple of notes jotted down on a napkin? That is what their broad band policy looks like. No detail, no costing – no policy. Also the whole idea is daft – what are they planning on using the bandwidth for? JK’s Bebo site?

    Personally I’d be surprised if national can hold it together long enough to make it to November. Just the thought of John Key coming up against Helen is enough to make me chortle with anticipation. Bubble boy meets a real politician.

  49. lprent 49

    Skeptic: The link is interesting. What would be more interesting is an analysis of the projected vs actual toll revenues.

    That was a curious ommission from that speech – if it was hitting projections then you’d normally see it trumpeted. There wasn’t a word about the financial viability.

    T0 my skeptical MBA eye, that said it was probably a financial disaster. Do not invest until you have a better idea about what is going on. In other words your conclusions were not skeptical, they were sucker bait material.

    You should really operate like your name rather than being a gullible fool.

  50. Skeptic 50

    For a tech geek, lprent, you don’t seem to have much faith in technology.

    In case it has escaped you, New Zealand is at the bottom of the world. No country is more distant from its major trading partners as New Zealand is. If New Zealand is going to make major leaps up the OECD ladder (you know, the kind that Helen Clark talked a lot about in 2000, but stopped a few years later when we started going backwards), and make big gains in productivity, then we’re going to have to stop just talking about transforming the economy, and actually do it. If your beloved Labour Party is going to lump us with hugely increased transport costs, then we need to make sure our transport modes are much more efficient. We need better roads. We need much better communications. If we’re lumped with vast carbon credit obligations to pay to Russian mafia oligarchs who own the Russian timber industry, then we need to trade more effectively. If we’re going to achieve the 100 technology companies exporting $100 million each, which this government started talking about a few years ago, then we need decent communications infrastructure.

    And that means we have broadband that will do much more than just look at John Key’s bebo or facebook sites (which are overwhelmingly more popular, by the way, than Helen Clark’s). We need to be able to tele-commute to our offices. We need to teleconference with the rest of the world. We need a base of decent financial services capable of trading across global markets.

    But keep talking up your train set ideas. It’s made those rich pricks in Australia even richer.

  51. Skeptic 51

    What a strange comment, lprent. Your skeptical MBA eye? The speech was about getting $1.5 billion of private sector investment in the roading network. It was successful. It achieved the investment. It doesn’t matter what the toll revenues were. The private sector investors took the risk. You claimed previously that private sector investors aren’t willing to take those risks. That is absurd.

    Private sector invests in infrastructure all the time. You may not be aware, but the New Zealand government just recently allowed chinese investors to purchase an electricity lines company. A canadian company just recently spent an enormous amount of money trying to invest in Auckland airport. They were prepared to take the infrastructure risk. Roading is no different. Contact Energy has been operating a quarter of New Zealand’s generation capacity for the last ten years.

    Yes, private companies can go bust. But a good public-private sector partnership doesn’t involve the public sector assuming all the risk. That’s a function of contract. What risk does the Government assume when it allows a chinese company to invest in New Zealand’s electricity network? That’s right. Absolutely zero. What are the consequences of that company failing to achieve an economic return on their investment? Either they lose money, sell it, or go bust. It doesn’t mean the electricity network disappears. Nor has there been a case in human history in which a private investor in roading, which has assumed investment risk has gone bust, and that road has suddenly disappeared.

    Despite your pompous, ignorant, and fact-based “skeptical MBA” denials, private sector investment in Australia’s roading network has been overwhelmingly successful. It has meant a much more rapid development of Australia’s roading infrastructure and developed substantial increases in economic productivity. Funny that.

  52. lprent 52

    skeptic:

    From what I understand of the arrangements for these PPP’s, the state carries the risk of toll revenues not being up to projections. This was the case in at least a couple of the secret coedrils that have subsequently been revealed.

    So the presumption would have to be that this is the case with all of the PPP’s done on the Sydney systems.

    Now if you can show conclusively that is not the case, then I may revise my opinion. But at present every PPP I’ve looked at from the boston fiasco to sydney has pushed most of the risk onto the public sector for toll projection shortfalls.

  53. Draco TB 53

    Brian Easton mentions that National will have a hell of a time finding any waste to cut due to Labour decreasing government spending (relative to GDP) since 1999.

  54. r0b 54

    National’s playing the long game now

    Puhlease. National are sitting just as still as they can, unable to believe their good fortune, and waiting for the apple to fall off the tree into their laps.

    and it’s pissing Labour off because they’ve got nothing to counter it with.

    Nothing but a 9 year record of good government and solid progress for NZ. If that isn’t enough to win the next election, it is at least a damn fine platform on which to lose it!

  55. Draco TB 55

    . What risk does the Government assume when it allows a chinese company to invest in New Zealand’s electricity network? That’s right. Absolutely zero. What are the consequences of that company failing to achieve an economic return on their investment? Either they lose money, sell it, or go bust. It doesn’t mean the electricity network disappears.

    Actually, if the company goes bust it’s entirely possible that the electricity network would effectively disappear because it would likely be is such a state of disrepair that repairing and replacing it would cost about the same. We take the risk that the electricity network will be allowed to run down, our productivity that’s dependent upon that network will decrease and that we will then have to cough up to replace it. Sounds like a hell of a lot more risk than zero.

  56. Seems clear now that the National will be privatising / contracting out to the private sector many jobs currently done by the Public Service. This creates a constellation of financially dependent clients who can be relied up on to make big donations to the party they gave them the contracts. It’s what the Republicans have done in the US.

    It ends up costing MORE money than the publicly funded model, but the political dividend for the party doling out the patronage is big enough to make it well worthwhile. If you run big deficits, blame it on tough times and let the low and middle income taxpayers carry the load. You want them to HATE their government so they will vote to make it even smaller….and undercut their interests even more….and hate the government even more.

    This is why US Republicans treat low-income and middle-income voters like trash. They WANT them to hate their government so they will support making it weaker….and the robber barons can then REALLY go to town.

    Paul Krugman opened my eyes to this tactic and it exlpains a LOT of what didn’t seem to make any sense.

  57. Anita 57

    Re: Bracket creep/fiscal drag

    Can someone please explain why this is a bad thing that needs to be made up for?

    I get a pay rise, so I get paid more, so I have more take home pay and I pay more tax. Because I pay more tax the government can keep providing the same services (which have started to cost more) or maybe even provide more services (like more elective surgery). Because I have more take home pay I am happy that I am paid more.

    I know that I’m going to be paying a high proportion of my pay in tax, but that is the point of a progressive tax system, and I’m ok with that.

    So, why should I be bent out of shape about fiscal drag? Why does a tax cut not count when it “only makes up for bracket creep”?

  58. r0b 58

    SW – Got a link to the particular piece by Krugman?

  59. lprent 59

    For a tech geek, lprent, you don’t seem to have much faith in technology.

    Correct. The programmers law is that “Murphy was an optimist”. He said that if something could go wrong it would. As a programmer I know it will go wrong regardless of it it was possible or not. It is just a question of if I find where the gotcha is before a customer does.

    There are very few technologically perfect systems, and virtually none in development phases. You continually get done by gotcha’s even on well understood systems. There are virtually no certainties until you’ve finished and shipped. That is why development is so much fun.

    I’ve been writing software for decades and selling exported and online systems. Development is completely different to simply owning or running things (any idiot could do that). It doesn’t matter if it is roads or software – the risk levels are utterly different. Anyone who does it for a living will tell you that. Please don’t confuse it with ownership like the wellington power example with any kind of development. That hardly qualifies as taking any risk at all.

    Telecommuting – I did it for 7 years. You can do it with minimal bandwidth using VPN’s, RDP, IM and a standard voice line. You certainly don’t need mega bandwidth. I started with 256/128 ADSL and moved up to 8000/800 with no major improvement in performamce. I was shifting gigabytes per month. If you were working with film you’d want more but otherwise ADSL is all you need. As it is I move about 40-50GB to and from home each month for various things. The 500MB each day for the backups of TheStandard are a major contributor.

    We do require more bandwidth – but on the international links not the local. That is why Nationals plan is stupid. There is no international component in it.

    I’ve said it before – you really need to learn more about risk handling. You simply don’t have the experience to pontificate.

  60. lprent 60

    Ok I stand corrected by Draco on the risk in the wellington vector sale. Looks like that they have brought a risk.

  61. randal 61

    the nats will find plenty of cash to waste on their mates! dont worry about that!

  62. Matthew Pilott 62

    Thanks Joker, perhaps I was implying that you had the blogging capacity of one. One who doesn’t care about politics in the slightest. Just a waste of time, in the end, making comments like that. And I notice you didn’t have a serious bash afterwards…

    Skeptic, I wasn’t talking about flip-flops, I was talking about core changes in ideology. I know it’s easier to trivialise something by referring to specific policy areas that haven’t worked, or aren’t percieved to have worked. Fair comments on some of those points, btw, Labour aren’t perfect, nor claim to be.

    I was primarily talking about National adopting things such as WfF, Kiwisaver, S59, a Nuclear Free policy. These aren’t like Labour failing to bring us into the top half of the OECD – I’m sure they’d still love to, it jut hasn’t happened. But National hasn’t ‘failed’ to have one of those things happen, they have reversed ideology that would have found them repugnant. An entirely different concept.

    National reversing fundamental ideological areas isn’t playing the same game, unfortunately. Once again you speak of National’s long game and ‘small target’ strategy. Unles you can prove to me that you’re a party insider and privy to information no one else is, I’m going to asume you’re guessing and in the dark like everyone apart from Natonal’s front bench (y’know, even their backbenchers seem to have no inkling of this great plan you place so much faith in).

    Think of an example like the $50 rape & murder levy policy – is there evidence in there of a Grand Strategy, or a party that will say what it needs to, but shows little evidence of having thought through what it must say to win.

    I pick the latter. You pick the former.

    Apart from National’s featherweight bulletpoint policies, and the various pathetic “policy statements”, there’s little to back me up. But there’s nothing at all to back you up.

  63. Matthew Pilott 63

    Lynn – I think Draco was saying the opposite – wouldn’t there be a possibility of asset stripping via under-investment? I.e new company doesn’t look after the lines and the govt has to bail consumers out when things go to pieces, while the company walks away with a pile? Worst case Evil Corporation scenario I know, but I gather it’s happened in NZ’s history before…

    So we’ve bought a risk, not the company.

    Anita, I guess the argument would be that it increases the tax take by default, and puts a greater proportion of people into a higher tax bracket. If the workforce increases their pay at a rate greater than inflation, the government would increase its tax take at a greater rate as well. That’s the argument anyway, as best I can think of it. I’m sure someone who has a real problem with the concept could elucidate more effectively than I.

  64. Draco TB 64

    I was pointing out that by selling the power network we have taken on quite a bit of risk rather than the zero that Skeptic said that we’d taken on. It need not be by the Evil Corporation scenario although that is certainly a possibility. The one I was thinking of was the Company Collapse scenario where the company goes through an extended collapse and in its efforts to maintain liquidity it keeps reducing maintenance on the lines. When it finally does go bust all that we’re left with is low resistance corrosion for a network.

    Under a state owned system with a reasonable mandate this is less likely to happen. It would also be cheaper and more efficient than privatisation.

  65. lprent 65

    Draco and Matthew: Yeah that is the ultimate problem with privately owned utility companies. If private enterprise abandons the system after asset and income stripping, then often there is no choice but for the state to take it up and repair it. Greatest good for the greatest number.

    The enervated rail network comes to mind. As well as being more efficient for long distance bulk transport, it is a strategic asset because of the uncertainty of the land transport in the next few decades. Also as a basis of a mass transit systems. Risk management again.

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