Sunday, August 03, 2008

National looks to Muldoon and Pork

John Key announced yesterday National's "infrastructure policy" something which, in the past, has never really existed. I'm absolutely appalled. Two statements describe what this policy is a mix of:
- Think Big;
- Porkbarrel spending.

So what's so wrong with it? Well let's see what John Key said:

"This deficit spans from our roading network through to our energy supply. Nor is it a problem limited to central government. Over the next decade, local government will face an infrastructure deficit of some $30 billion."

Well ok, he recognises there is a problem, although he doesn't really explain why (after all Labour's spending record amounts on roads at the moment), and doesn't explain why it is a government problem. This is the start of his error.

"our infrastructure policy will be comprehensive and bold. This will require leadership. National will appoint a Minister of Infrastructure to reshape, co-ordinate and then oversee the Government’s infrastructure objectives. It will be spelt out in our National Infrastructure Plan."

Rob Muldoon will be proud, Bill Birch will wonder if anything has been learnt. OK, so...

"This 20-year plan will be developed in conjunction with local government. It will set a clear direction for vital national infrastructure investment, including top priority projects. The plan will set out the intended local and central government infrastructure investment in roads, public transport, electricity, telecommunications, and water."

20 years!! Now this WILL be fun, predicting what is needed in the next 20 years. Let's give some examples of how THAT has been screwed up in the past:
- Wellington's Overseas Passenger Terminal, for ships, opened in the late 1960s for passenger liner traffic a few years before they all ceased;
- The Post Office rewiring Wellington's northern suburbs telecommunications networks for triple twisted copper wire, non standard, because it was the "new state of the art" idea in the 1970s. However it was completely incompatible with xDSL for high speed internet service, of course nobody knew of the internet in the 1970s;
- The Post Office/Telecom instituting card phones in the late 1980s that proved to be Y2K non-compliant;
- The Railways Department opening large shunting yards in the 1960s and buying new shunting locomotives in the 1980s, when freight trains were moving towards direct point to point services, not shunting individual sets of wagons between trains;
- The Railways Department introducing the Silverstar overnight luxury sleeper trains for the Wellington to Auckland run in 1971, three years after NAC had introduced Boeing 737s, putting the final nail in the coffin for long distance rail as a transport for business travellers;
- The Railways Department electrifying the North Island Main Trunk railway at the same time as the government allowed trucks to haul freight further than 150km, taking away the capacity pressure from the line, and at the same time as US consultants advised that far more would be gained by restructuring the operations of the railway to be more efficient;
- The government subsidising a new Wellington-Lyttelton ferry in the 1970s, as the Railways introduced a fourth Picton Ferry and NAC bought more Boeing 737s;
- Wellington hospital getting a multi-million dollar electricity generation plant in the 1970s with 2.5x the capacity of the requirements of Wellington Hospital which cost more to run and maintain than buying power from the national grid, and more than having backup generators;
- Invercargill City Council paying for international arrival and departure facilities, even though there have been no scheduled services from a foreign country to and from Invercargill, ever.

Let alone, what government department predicted the internet? What government department predicted international air travel would literally "take off"? What government department predicted mobile phones would start supplanting landlines? Don't worry, John Key and the National Party know the future - like they knew it in the late 1970s and early 1980s, when a fortune of "infrastructure investments" had their debt written off.

Anyway...

"Changes like the growing price of oil and the need for public transport and roading networks that reflect that. Changes like growing connectivity between countries and people and the need for telecommunications networks that make the most of this."

Actually John, oil dropped in the last few weeks, so well done. Do tell how you can plan public transport and roads to meet this, in fact one of the biggest "public transport" industries is the airline sector, have you predicted what ones will fail and what will succeed John? Oh and do tell what's wrong with NZ's international telecommunications links, since they have been growing in capacity for ages without government involvement- actually Southern Cross Cable happened when the Nats weren't in power.

"our National Infrastructure Plan will include up to $1.5 billion in Crown investment for an ultra-fast broadband network connecting 75% of New Zealanders. And that’s why we will double the Broadband Challenge Fund and refocus it on rural communities"

Crown = money taken from taxpayers John. Don't hid that. You'll focus on rural communities, because of course, it's not enough they are already required to be cross subsidised by urban telecommunications users. Yes, but I hope urban property owners can get big land plots and their parking free of charge in exchange for this bit of pork. Yes, the pork has begun.

"Our National Infrastructure Plan will also include a new category of state highway. We will call these Roads of National Significance. These Roads of National Significance will be singled out as essential roads that require priority treatment. This would include, for example, State Highway 1, the essential backbone of New Zealand’s roading network."

What an appalling idea. This is pork in the worst possible form. State Highway 1 is an essential backbone apparently. So those segments of SH1 where traffic volumes are a tenth of those of SH16 in Auckland or a quarter of SH2 linking Wellington and the Hutt, or a third of SH29 linking Tauranga and Hamilton, are more important than those roads. Forget efficiency, safety and congestion reduction, name the pork barrel road and goldplate it, right John? So presumably Wellington can get a second Mt Victoria Tunnel because that's the "Road of National Significance", but forget widening Dominion Road in Auckland. Presumably SH1 from Invercargill to Bluff is more important than SH2 east of Auckland which has an appalling accident rate.

Forget rating road spending on the basis of objective criteria and getting value for money, getting quality spending like you harp on about with local government. No, name a road one of "national significance" and the money can be diverted to tart it up in any way you can think of. Meanwhile the roads which actually ARE congested, or actually DO have an appalling accident rate, are neglected, but John Key might have opened the new four-lane section of the Desert Road, or the unnecessarily exhorbitant Huntly Bypass or Transmission gully motorway.

Then he avoids fixing the RMA...

"National’s new Priority Consenting process will streamline consents for major national infrastructure. These will not go through the local council but instead will be called in and determined nationally."

Ah get it? So YOU wont get relief from local authorities and the RMA eroding your private property rights, but the state will in building its big grandiose projects. Rob Muldoon tried the very same thing of course.

He wants to borrow from you too...

"First, we will introduce infrastructure bonds. Secondly, we will make greater use of public-private partnerships. These new financing and asset management techniques will open up infrastructure to a wide range of financial investors. This will include Kiwi mums and dads through their super funds and Kiwisaver accounts."

Or he could just privatise the three remaining power companies, resell the railways, sell Air NZ, require councils to commercialise and privatise water, commercialise and privatise the state highways. None of this is unknown around the world, but no. John Key is scared of privatisation, even though his party did it in electricity with no ill effects, even though it has been a success in addressing infrastructure backlogs in the UK with water. He's gutless, unable to make the argument - but willing to be the 21st century's Rob Muldoon.

John, if you want to go on about financing techniques used elsewhere, all the countries you list have embraced privatisation and haven't turned back. In the USA whole highways have effectively been privatised, with the government leasing the roads to private concerns for 99 year periods.

However National ISN'T embracing the future, it is calling for a fortune of taxpayers' money to be used to subsidise the telecommunications sector. That's socialism. It is calling for 20 year plans for central and local government infrastructure. That's Muldoonism. It is calling for infrastructure bonds, like Michael Cullen. That's Labour "me tooism". It is calling for private public partnerships, that MIGHT work in a handful of cases but best works when government gets almost entirely out of the way. It is calling for politically designating roads as "important" implying money spent on those roads is more important than money on others, even if others have worst congestion or safety problems, even if others return more bang for the buck in investment. That's pork barrel funding.

National's infrastructure policy is looking back, back to the age of Rob Muldoon and central planning, with taxpayers paying for a selection of follies and winners. It looks like the sort of pork barrel promises seen in US politics, when "strategic importance" overrides reason and analysis. Most of all it pushes out the private sector. It tells power, gas and telecommunications companies that they should avoid taking risks, the government will do it for them, and it keeps transport stagnated in the politically driven supply side government planning of the past. What's most disgusting is that when National was in power in the 1990s, it rejected most of this nonsense for good reason - now it's trying to buy your votes with your future taxes, and those of your kids.

Don't be fooled. This is virtually indistinguishable from Labour.

1 comment:

Mark.V. said...

"First, we will introduce infrastructure bonds. Secondly, we will make greater use of public-private partnerships. These new financing and asset management techniques will open up infrastructure to a wide range of financial investors. This will include Kiwi mums and dads through their super funds and Kiwisaver accounts."

Yikes, just what we need, forced investment of our retirement savings in investments that don't actually generate a commercial return. Didn't Muldoon do something similar, require financial institutions to invest in government bonds that provided a less than market rate return?

Spending money on, for e.g. a road doesn't make it an investment. It is only an investment if it generates an income.