Head of Lifestyle Economics at the UK's Institute of Economic Affairs (IEA), a free-market thinktank, has written an excellent piece at The Critic called "On Britain as a capitalist command economy".
The central hypothesis is that the UK is both far removed from being a free-market economy with a small state and light-handed regulation, and from being a state-owned economy run by bureaucratic, politically driven trading departments. It is worth reading in whole!
He describes the conundrum of how to describe the UK economy...
The left call it neoliberal but neoliberals have had no meaningful influence on British governments for thirty years. The right call it socialist but neither the Tories nor Labour have shown much interest in seizing the means of production. Keir Starmer’s government is more left-wing than he wants you to believe, but even if he renationalises the rail and water companies, it will be a nostalgic gesture rather than a heartfelt effort to control the heights of industry. Only on the fringes of the left is there any desire to return to the days when British Airways, Jaguar and Thomas Cook were under “democratic control”.
Arguably New Zealand isn't much different. Of course the Greens, TPM and parts of Labour will say the country is under the oppressive yoke of neo-liberalism, their latest scapegoat "billionaires" and "foreign capital", and of course people like me will rail against the "commie kids" on the left in Parliament, and in local government, but there's little real evidence of NZ embarking on Douglas/Richardson Mk. 2 or becoming the DDR under the last government.
Jim Bolger put the brakes on free-market liberalisation and shrinking of government after the 1993 election, although the direction of travel largely remained the same until 1999 when the Clark Government starting turning things back - notably by passing legislation to cancel the contracts of private ACC employer account providers to return ACC to a state monopoly insurer. Clark followed by renationalising Air NZ and the Railways, setting up a state retail bank (Kiwibank) raising income taxes and vastly expanding the welfare state with "Working for Families". The Key Government did little to change this trajectory, and the Ardern/Hipkins Government doubled down, with significant spending increases (even leaving aside the Covid response), and increasing both the size of the public sector and scale of regulatory intervention in the private sector.
On the face of it, the post-Thatcher settlement has held, but there is nothing Thatcherite about this government, nor the ones that preceded it.
Likewise in NZ. It's not to say the Douglas/Richardson (note it isn't the PMs noted for these reforms) reforms have been unwound. New Zealand isn't returning to rampant protectionism, nor has Labour embarked on vast renationalisation (the Government isn't going to get a national bus company, shipping company, hotel network or life insurance company), but what has happened is an accretion of central command and control. The UK of course has long had it with the Town and Country Planning Act, the single biggest act constraining housing supply and enabling local government to be the greatest NIMBYs in the UK's history. It was passed in 1947! New Zealand has only had the Resource Management Act since 1991 (passed during the height of Ruth Richardson's reforms, but inherited from Labour led by Geoffrey Palmer - which speaks volumes), but it too had kneecapped housing supply, inflated the cost of infrastructure and is only now with a chance of being replaced with something a bit less worse.
Snowdon writes about price caps introduced in the UK on energy, the Starmer Government's ban on "no-fault evictions" of tenants and enabling legal challenges on rent increases.
He highlights the nonsense of the Equality Act in the UK, which is being used to impose "pay equity" claims of the sort Brooke Van Velden has put a stop to, much to the chagrin of retired former politicians.
the Equality Act ... stipulates that men and women should be paid the same salary if they do work of “equal value”. Grotesquely over-interpreted by activist judges, this led to the bankruptcy of Birmingham City Council and 16 months of strikes after it was ruled illegal for (mostly male) dustmen and gravediggers to be awarded bonuses when (mostly female) cleaners and carers were not. ..
In the Next case, it was revealed that the company offered its 25,000 retail staff a chance to work in the warehouse but only seven took up the offer (three of whom walked out within a year). Despite one of the claimants admitting that she didn’t find the prospect of working in a noisy warehouse appealing but would have considered it if she was offered a lot more money, the company still lost.
The process used to determine what was "equal value" is what Snowdon describes as "that looks like something from a Marxist professor’s fever dream to decide the value of an employee’s labour." This diagram is the basis for a bureaucratic central planner's view of how people's pay should be set, which bears zero reference at all to how many people want to do the job for the pay offered. Have you seen a single politician or journalist in New Zealand outline how ridiculous this is? This is exactly the outcome of the philosophy of the capitalist command economy.
Snowdon describes it as essentially the application of activist state seeking to remould capitalism to meet centrally determined goals:
An activist state is systematically coercing the private sector in the pursuit of a range of social engineering goals, all of which are implicitly assumed to be more important than the economy. It is a form of central planning, albeit with a patchwork of different plans rather than one overarching goal.
Following on from my previous post, this is exactly what you can see from the Opportunity Party, whose leader "stepped into the world of... purpose-driven business". The purpose you can be sure is not why people and other businesses risked capital in the business, it's a purpose that is mostly about signalling virtue, and just chips away at its competitiveness, its resources to respond to consumers and competitors (especially in economies that don't have this sort of regulatory impost).
It's commonplace for people to refer to the People's Republic of China as a "communist" country. While it is led by the Communist Party, and has a great deal of central command and control, in many aspects it lets private enterprise run rip and be competitive, especially when exporting and seeking to win against foreign rivals. While it has plenty of state owned enterprises it directs and controls, it is less interventionist in the private sector. You see China actually cares about economic growth and development, because it works.
In the UK and across much of the developed world, governments are far more concerned about social engineering goals. Snowdon notes Net Zero (regardless of cost) which in the UK sees car retailers fined for selling too many cars that people want (petrol or diesel powered) relative to cars fewer people want (EVs). The market doesn't price goods the politicians want people to buy cheaply enough, and the public don't want to pay more for them, so the politicians penalise companies selling people what they want. The Ardern Government did this more softly by taxing the cars people wanted to subsidise the ones the government wanted people to buy. It did it by implementing US style government procurement rules to preference responses to tenders that included Maori enterprises, just because of their ownership, regardless of the value the enterprises offered to taxpayers relative to others.
Supermarkets have already been banned from offering multi-buy price discounts on “less healthy” food and are prohibited from displaying these products in certain parts of their shops. Wes Streeting plans to go even further and start fining supermarkets for selling too many calories.
I don't think New Zealand is quite so bad. A cursory look at economic statistics indicates:
- State spending as a proportion of GDP is 41% in NZ, 44% in the UK
- Tax as a proportion of GDP is 27% in NZ, 35% in the UK
- Public debt as a proportion of GDP is 41% in NZ, 98% in the UK.
It's notable that many of the command and control steps in the UK haven't been followed in NZ, although some of these were stopped with the removal of the Hipkins Government.
However, the approach of regulatory control of the private sector remains at the heart of what the Wellington bureaucracy advances to meet social goals, and it has widespread support in academia. Some elements of the capitalist command economy remain very much in place.
Even with its replacement, the Resource Management Act will still not put private property rights first, and will still mean local government very much is in command.
The electricity industry remains a weird blend of a market economy, with significant state investment, constrained by the planning system, which neither resembles a free market (given how difficult it is to build new generating capacity, and the state majority owning three quarters of the sector), nor a socialist system (as there is not a monopoly state provider). The previous ban on new oil and gas production (which in the current environment seems absurd) was purely an exercise in social engineering and virtue signalling, to show off a commitment to "Net Zero" even though it made virtually no impact on such targets (and no impact on climate change). However it certainly scared off new investment in the sector, fearing a change in government could ban its industry once again.
While supermarket competition is not what some would wish, this is largely due to the planning system, although there remain calls to split up the industry in ways unheard of in other countries, with even the Finance Minister having floated it, and it still being a "live" policy with some political parties. The fact this was even considered by a purportedly centre-right government indicates how far from the 1980s and 1990s NZ has gone.
New Zealand lacks the compulsory centralised pay bargaining seen in Australia, which bears the cost of it because the wealth generated from mining is so significant, the loss in productivity is diluted. However, it was only a change in government in 2023 that stopped it being implemented in NZ.
So I'd say New Zealand isn't quite as far down the path of regulatory sclerosis as the UK, but that is not because of a lack of will to continue down that path. You can see it in Labour, the Greens and the Opportunity Party, as well as within the glance of part of the National Party and NZ First to seek to add "just another" regulation to make business have "purpose" to meet the politicians' goals.
The fascists of the 1930s (actual fascists, not David Seymour) didn't advance communist style nationalisation of the economy because they preferred to use regulation and state control over business and industry to meet their goals. The word is vastly overused by the far-left, but its approach philosophically is not a million miles away from the bureaucratic command and control state regulating capitalism to meet the lofty ambitions of politicians.
One thing is for sure, it sure isn't a free-market capitalist economy.
There are people absolutely loving the price of fuel going up and eager for there to be fossil fuel shortages. It’s getting them terribly agitated, in a quasi-sadistic scolding way. “Told them so” said one, “those car fascists are going to pay” said one politician, “if only there were cycleways, the teachers and nurses would use them to get to work” said an earnest unionist. “It’s ironic that the white supremacist genocidal Zionists are helping up” said keffiyeh wearing angry woman.
It started online of course, chatting together getting all excited. “Shortages will show them we were right all along, public transport is better, that’s why we need to tax people more to make it free” said the urban planner. “The people, well I mean they aren’t really human are they, that own Ford Rangers or RAM are going to feel it bad, and they’ll realise how uncool and hate filled such vehicles are” shouted the Greenpeace staffer. “Child murderers!” cried out the neurodiverse kindness campaigners. “They’re not all ACT or Winston supporting straight white men who don’t have degrees though right?” said the elder gentleman who once marched against apartheid”. “No, but 90% of them are” said the suspicious purple haired non-binary student. The university lecturer noted “Look this will expose the far-right white supremacist Zionist Trumpist terror supporters to the mass of good people who support a powerful exemplar of decolonising resistance”, before the photographer yawned and said “steady on now, we need to be practical if we are to free people from the car addiction they don’t want.
A failed list candidate said “Great, even though the climate destroying far-right scum are in power, it’s election year and can get The People on our side. We can finally show people how wonderful it is to share journeys with others on public transport, or enjoy being with nature in a cycleway”. A sick, sniffing one said “and it doesn’t matter about the Nazi Ranger drivers, all we need is for the Greens to give Labour enough of a boost to kick out Peters and Seymour”.
I might jest, but they really are almost tumescent in their excitement.
This is the chance, the central planners can take more taxes, they can impose new rules, they can spend more of your money and direct the poor “addicted” car users to the more enlightened future of more public transport use, more cycling, more walking and of course freight should go by rail. Not having convinced enough people that abandoning driving was necessary to save the planet, they think they can convince people that it is for their own good to abandon their transport choices.
What do they want? You don’t even need to ask it’s all pretty clear:
•Make driving less attractive. Slower speed limits, remove general traffic lanes, remove parking, tax cars more.
•Tax you more (now or later) to subsidise public transport even more with cheaper fares, despite demand being up and the cost of providing services going up as well.
•Tax you more to subsidise rail freight, because businesses that use it already need a helping hand from… you.
•Tax you more to subsidise people who can afford to buy new cars to buy EVs, and for other people to buy e-bikes.
Lunatic fringe academic Timothy Welch is one of these people . He’s a senior lecturer in urban planning, which of course is something we need much less of. He gets republished by leftwing media because he plays to its unconscious bias, as he really knows little about the commercial side of the transport sector and is keen to selectively quote data as facts to support his own point of view. His claims are mostly value judgment nonsense.
His latest piece of polemic sees him supporting taxing buyers of petrol vehicles to subsidise buyers of EVs (it wasn't long ago he was bemoaning EVs saying "EVs require the same amount of road space and, due to their increased weight, potentially cause more road damage. But EV owners don’t buy petrol, which means they don’t pay excise tax – the same tax that pays for expanding roads". EV's don't cause more road damage, but then after the Government put EVs onto road user charges he bemoans it making EVs "less competitive". More generally he supports making new vehicles more expensive (through the “Clean Car Standard”) which helps ensure the vehicle fleet stays older for longer, but Welch doesn’t like cars at all. He loved that fewer utes and SUVs sold under the Clean Car Standard. He bemoans the car ownership rate of 815 cars per 1000 people “one of the highest in the world”. This should be celebrated that so many can afford a car and have the freedom it provides (urban planners aren't big on this), but he ignores that NZ is larger than the UK with 8% of the population. He claims that every decade there is an oil shock, which isn't really true, but even when it happens that all dies down (remember people like him warned us of Peak Oil? That was until fracking discovered more). The 1979 oil shock one provoked Rob Muldoon to advance Think Big, and every single one of those projects turned out to be a net drain on the economy, because in a few years oil prices dropped right back. Welch doesn’t let that stop his excitement for reducing car ownership. He finishes with this absurdity:
Every bus electrified, every cycleway built, every train funded is a direct reduction in exposure to the next crisis. The question now is whether New Zealanders begin to treat their car dependence not as a lifestyle choice but as a strategic liability.
What utter rot. Unless the bus is taking people out of cars, and unless a cycleway takes enough people out of driving cars to offset its cost of construction, it does nothing to reduce exposure. He advocates fully taxpayer funded public transport, which has been shown in multiple examples (e.g. Tallinn, Estonia) to largely replace walking instead of driving (in Tallinn car use dropped 5%, but walking dropped 40%, and car mode share climbed back up because public transport was overcrowded with people riding it for short trips).
There’s photographer Patrick Reynolds made a name for himself as an urbanist, and has for some years been an activist for the Green-left’s war on private motoring. This is why he was appointed to be board of NZTA in the first term of the Ardern Government, as the Greens strongly advocated for him. He’s positively excited about the crisis on the Green PartyGreater Auckland blog. He says we should think strategically (i.e. don’t just react to the crisis, but think of the “long term”). His next step is to “rapidly reduce demand” and to “ensure an equitable path”. He said we are “structurally addicted” to driving. Curiously he floats the idea of lower speed limits for everyone but EV drivers, which is nonsense of course. Of course he doesn’t talk about aviation or shipping because These are blind spots because, by and large, governments don’t tax you to pay for their infrastructure, vehicles or services, because you’re willing to pay for them yourself (directly or indirectly through freight).
Of course it is now rounded off by the Greens. Chloe Swarbrick has, finally, taken time out shouting for the destruction of Israel and touting Hamas propaganda to demand "free" public transport and a new tax.
This wont excite the car hating mob though. Nothing gets them over the top quite as much as penalising car driving. Cars, the epitome of individual freedom, expensive capital assets that exist purely to sit idle for the owner to use when wanted, to go when and where they want to go. So unlike public transport which is planned (!) and scheduled and directed to be a sharing experience, not so fast, not so direct and not so "selfish".
And No. Unlike the control freaks, I really don't care how you get around, or how goods get around, as long as people pay for it themselves. No modes of transport are "bad" or "good", they just are well suited for different purposes. For as long as this fuel crisis continues, people will respond to the price signals in the ways they want. Some will drive a bit less, some may buy vehicles that use less or no fuel, some will ride public transport, some will bike and some will walk. Most people are quite happy buying their own cars, fares, bikes and shoes, and the way it SHOULD work, is the more people buy of one mode, the more that can be provided.
Funny how the planners don't really think that should be the way isn't it?
UPDATE: Oh look another one, this time from Professor Alistair Woodward, from the University of Auckland's Faculty of Medical and Health Sciences, who RNZ conveniently cited without counter-argument that there should be regulations on people buying vehicles he thinks are bad. The public health lobby's appetite for micro-managing what everyone does, because a small handful engage in bad behaviour has no end.
Apologies, I've been following this whole segment of road for far too long, from growing up being driven through Mt Victoria Tunnel, to some work on the Inner City Bypass 20 odd years ago to living near the tunnel today.
....
The Government’s proposal for a 2nd Mt Victoria Tunnel, 2nd Terrace Tunnel, reconfiguration of the roads around the Basin Reserve and widening of Vivian St is the latest set of proposals to fix the unfinished business of the Wellington Urban Motorway. We will see whether all, some or any of it proceeds, but for the sake of Wellington at least some of it should (specifically the tunnels), because the status quo, notwithstanding the largely evidence free claims of Green Party politicians, is an absurd waste of time and energy in a city of this size.
History
It wouldn’t be hard to write a book about the history behind all of this, which started with then US consultancy firm De Leuw Cather, preparing a “transportation master plan” for Wellington. It considered the option of a waterfront motorway (see Seattle and San Francisco for now demolished versions of this), but preferred what was known as the Foothills Motorway. It follows the existing motorway, with two instead of one Terrace Tunnel (3 lanes each way), with 2 lanes continuing on a motorway going under and over various streets and, initially, demolishing the Basin Reserve for a motorway interchange, before finishing up at a second Mt Victoria Tunnel (2 lanes each way using the existing tunnel). De Leuw Cather also proposed placing the Wellington commuter rail service underground to Courtenay Place, through the reclamation land. Of course that latter proposal wasn’t going anywhere, but the motorway started from Ngauranga (not connected to Ngauranga Gorge, but rather as just an extension of the Hutt Road from the Hutt). In the 1960s and early 1970s, the motorway cut a swathe through Thorndon and Kelburn, with much of a cemetery dug up and interred in a mass grave (don’t think that this was an era of much consecration to Christian religious values). However, the 1974 oil crisis (entirely stemming from the Yom Kippur War) saw a slowing down of the project, with the Muldoon Government ultimately deciding that it (and multiple other road projects) would be terminated at Willis Street, with the segment from Bowen Street south halved in scope. One Terrace Tunnel, one lane southbound, two lanes northbound.
At the time, with the motorway only being SH2 (SH1 still being the Hutt Road from Ngauranga to Aotea Quay, and continuing along the waterfront to the termination point of Jervois Quay and Taranaki Street), this made some sense. It was never congested, and the scale of traffic through Te Aro was easily handled by the Vivian St/Ghuznee Street one way pair.
In 1983 the Ngauranga Interchange changed all that, by around doubling traffic on the motorway, the end of the motorway became a bottleneck, exacerbated by the single lane in the tunnel. Further bottlenecks existed with Ghuznee Street and Buckle Street, with the dog leg route from the Basin Reserve to the motorway being utterly unsuitable for the traffic volumes going through it. This situation persisted for 12 years.
Meanwhile, a scaled back proposal to ease the traffic pressure came from the then National Roads Board. A motorway extension designed as an arterial highway with 70km/h speed standards. The original plan to destroy the Basin Reserve for a motorway interchange (which had been shelved some years previously) was replaced with a highway bridge across the northern boundary of the park. The Terrace and Mt Victoria Tunnels would be linked by a fully grade separated highway going under Willis and Victoria Streets, severing Cuba Street (except for a pedestrian bridge), passing over Taranaki Street before darting under Tory and Sussex Streets. One lane would extend from Mt Victoria Tunnel under Sussex Street to join a second lane from the south. Whereas one lane would exit at the Basin to Cambridge Terrace and Dufferin St, with one lane extending to Mt Victoria Tunnel.
1980 scaled down motorway extension proposal before it got dropped in a trench in 1991
Fully trenched but not covered in this brutalist image that looks like it was designed to kill it
The next decade or so would see the project rise up the regional priority rating, as other projects were built: Upper Hutt Bypass, Mungavin Interchange, Silverstream-Manor Park 4-laning etc, but then the funding system for roads was reformed. The Ministry of Works was abolished, and shortly thereafter, Ruth Richardson slashed funding for roads. At the time, funding was mostly allocated based on a cost/benefit analysis, with 25 year return periods. For around two years funding was not even sufficient to keep up with maintenance, and as the 90s progressed, the Wellington Urban Motorway arterial extension went up in cost and was always borderline for funding. However, it always had a BCR of over 2 when the threshold for funding was 5 or 4.
At the same time the nascent Green Party campaigned vehemently against it. To try to address concerns the project was first redesigned to be trenched the whole way across Te Aro, then put in a cut-and-cover tunnel to the bridge on the north of Basin (called Tunnellink). However, it was clear by the mid 1990s that funding wasn’t likely for over a decade. So a three stage project was advanced. First a simple one-way pairing of Buckle and Vivian Street, followed by what is now known as Karo Drive. Karo Drive literally took around 12 years from its inception to opening, largely because of the opposition to it by the Green Party spreading vast amounts of misinformation. Then Green MP Sue Kedgley always called it a “motorway extension”, and eventually when it got funded by Transfund, and all legal avenues under the RMA to stop it were exhausted, it got built. It was only meant to be a ten year stopgap until the Tunnellink could be built.
However, by then Transit NZ (later to be merged with Transfund and the Land Transport Safety Authority) had largely given up on the idea of a cut and cover tunnel. So the next step was to fix the Basin Reserve, and plus ça change it was stopped by an organised campaign of the Greens and Mt Victoria NIMBYs. This was for a two-lane 50km/h one lane bridge clear of the Basin Reserve, westbound.
2001 - preferred Basin grade separation without Tunnellink
2008 - one of the options for the Basin Bridge
At the tail end of the Key/English Government there was a commitment to a second Mt Victoria Tunnel, but of course that all was stopped under the Ardern Government, as the Greens made sure that the Let’s Get Wellington Moving project would prioritise emission reductions, and put little value on reducing general traffic congestion.
The Ardern/Hipkins Government did support a second tunnel, but it was to close the existing tunnel to motor vehicle traffic, and build a new one with four-lanes, two for buses. In short, no relief for general traffic.
What’s been proposed?
So here we are today with essentially five main elements to upgrading SH1 through Wellington. Once again the Greens are talking about “building a motorway through Wellington” which it absolutely does not do. It doesn’t build one metre more of motorway, but it does widen one section along an existing motorway corridor. The five elements are:
-Second Terrace Tunnel
-Upgrading SH1’s one-way pair through Te Aro
-Basin Reserve reconfiguration
-Second Mt Victoria Tunnel
-Widening eastern approach roads to Mt Victoria Tunnels.
Second Terrace Tunnel: This is sensible, because it will the single biggest measure to remove 20% of traffic from the waterfront route. It is on a smaller scale than the original proposal (will be two-lanes not three southbound and the existing tunnel will only be two-lanes northbound), but should not be controversial. What will constrain it is…
Upgrading SH1 through Te Aro: Reversing forty years of planning, Te Aro will still be blighted by heavy highway traffic pushing through it, by widening Vivian Street (which has been designated on the Wellington District Plan for many years) to three lanes one way. As a stopgap this is satisfactory from a traffic flow point of view. but is hardly a long-term solution. It should have a cut-and-cover tunnel along the line of Karo Drive, which would be expensive and disruptive, but would be transformational for Te Aro. A proper bypass would make a huge difference, but for now with the two tunnels being the major bottlenecks, that idea isn’t progressing. In short, this will be the new bottleneck, exposing the greatest number of pedestrians (and traffic) to delays and emissions. It’s the cheap part of the package, and it will need to be addressed at a later date.
What’s disconcerting is that there is little future proofing to enable a solution to his, especially with this proposal…
Basin Reserve reconfiguration: There is no shortage of options designed to fix this problem, which is essentially the need to separate east-west traffic from north-south traffic, while also allowing it to interchange. The latest proposal partially separates traffic, but it means the same number of traffic light controlled intersections westbound and eastbound on SH1. See below:
No doubt clearing Mt Victoria Tunnel congestion will improve eastbound flows, but it is far from clear that retaining a network of pedestrian controlled traffic lights and keeping SH1 at ground level in front of the Basin Reserve will not create new bottlenecks, and worsen the concentration of traffic/emissions across the northern side of the Basin. The Rugby/Dufferin Street sections outside the schools will be quieter, but be a ratrun for traffic from the city to SH1 west, and from Newtown to SH1 east. The big winner is north-south traffic to and from Newtown towards the city.
No doubt there will be a net improvement, but it is clear from the proportion of benefits of the total package that this is where not much will be gained. What’s particularly concerning is that it doesn’t look like it provides for future proofing building a parallel eastbound pair of lanes to take traffic from Vivian Street and over to the second Mt Victoria Tunnel. I understand the reluctance to elevate SH1 near the Basin, but it could be done by elevating Sussex Street over SH1 and building an artificial hill to carry the road with significant mitigation of the visual and noise impacts of a bridge. This is a mess. The new Green Link looks like it is preserving an option, or maybe it is preventing it.
Second Mt Victoria Tunnel: This is like past proposals and is entirely suitable as a solution to this problem. It is a shame that westbound its capacity will be constrained by unnecessary intersections at the Basin.
Widening eastern approach roads: Four-laning Ruahine St and Wellington Rd (six lanes at points) has long been the right approach, but the design of intersections seems bizarre indeed. Grade separating at Hataitai Park (to a new road where houses currently exist) seems over the top. The removal of Taurima St access to Mt Victoria Tunnel needs a solution, as does access to Hataitai Park, but why is this intersection getting such lavish treatment, but Wellington Rd/Ruahine St (which enables access from Newtown to the airport, from Hataitai to Newtown, and for access to southern Newtown to and from SH1 bypassing the bottleneck in front of the Hospital) is curtailed to simple slip lanes in one direction only? The latter should be a full scale intersection. Previous plans simply had an elaborate intersection at Goa Street, although there is some merit in having grade separation, it seems odd that a low traffic intersection gets it, but not the much heavier traffic ones at Kilbirnie Crescent and Evans Bay Parade (although imagine the outcry if that were proposed).
There are lots of minor details in this section which make access between Kilbirnie, SH1 and Hataitai worse, presumably to save money from more comprehensive wider intersections. Much of this looks worse for residents. In particular, anyone driving from Newtown to the airport will weirdly have to drive through Kilbirnie’s CBD (but not in the other direction). Anyone driving from Hataitai to Newtown will either have to go through Mt Victoria Tunnel to ratrun past the stands at the Basin Reserve, or go into Kilbirnie and ratrun up Duncan Tce. (a narrow street with poor visibility at the top).
This is all details though in intersection design, which I expect locals to have their views on. The Greens are claiming a big increase in traffic in Moxham Avenue will occur, but that’s mostly a shift from Taurima Street and the existing intersection on Ruahine Street.
Thinking more widely
There is talk of tolling the route, although no details have been presented, it is difficult to envisage it not simply being at the tunnels. On its own this would have merit if the whole proposal enabled free flow traffic all the way. It doesn’t. Paying a toll to drive through the Terrace Tunnel to end up at Vivian Street isn’t a compelling proposition, and would divert local traffic from the tunnel to The Terrace. Likewise paying to use Mt Victoria Tunnel to reach a pair of traffic light controlled junctions by the Basin Reserve. A full scale freeflow bypass would be another proposition, offering a high value fast trip, but that isn’t what is proposed.
On the other hand, a central Wellington congestion pricing scheme within the boundaries of SH1, which helps pay for this, would have much more merit as it would reduce traffic towards the city at peak times, and enable better flow of traffic around it. An AM peak inbound, PM peak outbound price for driving in and out of Wellington on weekdays would have some merit.
Much has been raised about the BCRs of the project, but although I put some value on economic analysis, when it comes to tunnels, the return period for them is much longer than any conventional highway or bridge. Tunnels last almost forever once dug, and only need moderate upgrades throughout their existence. So I treat the two tunnels as very long term investments in addressing the resilience of the city’s transport network, and enabling a future full scale bypass of the city.
Claims from the likes of the Greens that “car tunnels” (a deliberate misinformation campaign to diminish the role of freight and buses) will just induce more traffic are largely nonsense, especially if congestion pricing is introduced in parallel. There is no more capacity that will be build north of Ngauranga Interchange, so more traffic cannot be attracted from that direction, and with much of the traffic on the route bypassing the city, little of that is going to be attracted from public transport to driving. Modern cities have good bypasses, Wellington has lacked it for decades.
So I’m in favour of the tunnels, in favour of the widening east of Mt Victoria Tunnel (with some caveats), but the upgrade through Te Aro is cheap and nasty, and needs to make provision for something better once the two tunnels are built. It will be obvious the city needs a proper bypass. The Basin Reserve proposal is messy and poor value. It’s unclear why north-south traffic going in a four-lane trench is better than being on a four-lane bridge over the east-west traffic, and why so many light controlled intersections should be kept. It should be reconsidered.
And for the opponents...
"A City for People" is, of course, a Green Party oriented activist site (they always claim to be non-partisan, even though the members are largely not) ideologically and philosophically aligned to the other Green oriented activist ginger groups (which have a lot of interchangeable members) like Generation Zero, Parents for Climate Aotearoa, Cycle Wellington, Women in Urbanism, Renters United and the Sustainability Trust.
The propaganda inference is that if you don't support their policies, you don't want a "city for people". It's a shade of the People's Republics, which imply if you oppose them, you're opposed to The People. While I have some support for their campaign to enable more intensification, this isn't a group in favour of more freedom and less government. It is not in favour of people who want to drive, or people who ship goods or deliver goods.
It claims "A whole generation of people are being forced out from the city spending hours every day in traffic jams". While I have lot of sympathy about housing prices, the idea that people in Wellington are spending "hours every day in traffic jams" is nonsense.
It states:
The cost of this project is truly bananas. Per kilometre it’s the most expensive roading project in the entire country. It’s $2.9-3.8 billion (with a B - looks like this).
And it’s all about a relatively small aspect of Wellington’s transport problems: private-car congestion at selected times.
It makes no attempt to fix what will make the most difference to people (and LGWM’s origin story): the bus-network that’s already at capacity and hamstrung by being stuck in general traffic.
Even just for general traffic congestion, this project is jumping to a platinum-plated mega project solution before we’ve tried all the other things first.
It could do irreparable harm to Wellington, just as we’re starting the transition to being a real city.
It IS expensive, but tunnels are. I'd note that the Let's Get Wellington Moving project to build a single tram line to Island Bay and a second Mt Victoria Tunnel that added no new road capacity (but freed up the existing tunnel entirely for cycling and walking, and added lanes for buses) was $7.4 billion. That would have delivered a tram to Island Bay that would have been no faster than current bus services, and only modest relief to traffic congestion at the Basin Reserve.
The claim that the proposal is just about addressing "private car congestion" is misinformation, and minimises a situation that exists most of the day during weekdays and much of the weekends. It also affects bus congestion from the eastern and southern suburbs at the Basin and Kilbirnie Crescent. It isn't just cars, it's also trucks (the Greens pretend freight doesn't matter), taxis and rideshare services, besides the majority of trips undertaken in Wellington are by car, either as drivers or passengers.
It WILL fix bus network capacity issues, especially at the Basin Reserve, Kent Terrace and from the Eastern Suburbs, as traffic will flow much more freely, and take 20% of traffic off of the waterfront route. It's wilful blindness to pretend otherwise (because these people think any new road capacity is malign).
The claim it is a "platinum plated mega project solution" before "we've tried all the other things first" is pejorative nonsense, especially from people who were happy to spend double that, mostly on a tunnel and tram line. The only option that might help somewhat is road pricing, but the advocacy for that is muted. There is no realistic chance of significant modal shift for trips that bypass the city, because they have a diverse range of origins and destinations. Likewise, without an additional tunnel to the eastern suburbs, there will not be modal shift from there as buses cannot flow freely. It's fair to object to spending a lot on transport infrastructure, but not when you're solutions are more expensive and require significantly more taxpayer cost over time to subsidise their operations.
The claim it could do "irreparable harm" to Wellington is pejorative hyperbole. The land for the second tunnels is hardly significant, part of it is within the motorway corridor in any case.
Finally, their claims about the proposals are weak:
It aims to “fix” traffic congestion by building a bigger road in the centre. Never, not ever, has this worked.
If you look at the numbers for how LGWM’s package was going to “fix traffic”, it wasn’t the very expensive road-building that was going to do the heavy lifting: it was congestion charging (digital infrastructure and some gantries) and the second spine for public transport (paint, signage, timetabling). And the costs for civil construction (which this expansion project is all about) have rocketed since then.
There are lots of flaws with the logic: smooth, faster-flowing traffic through the city centre while also somehow not worsening severance in Te Aro, and while also allowing lots of cars to turn on and off it…
Its Cost-Benefit Ratio is already low (even with the extra-low discount rate now allowed to be used) and the Inner City Bypass was found to have been probably not worth the money spent on it (we lose more than we gain from having it) so it’s highly likely this will be worse given its far greater costs. The opportunity cost of this public money is dismaying.
First bullet is wrong. It is not a bigger road in the centre at all, and yes building new roads has fixed congestion in many cases, especially in smaller cities. Many cities have inner bypasses that work, such as Oslo, Berne and Bergen, and they DO relieve congestion. The first motorway in New Zealand, the Johnsonville-Tawa segment, remains adequate for traffic at most times and there is NO proposal to widen it. It's time that the oft-claimed "every new road induces traffic until it fills up" is tempered by reality that this is only true in some cases.
Yes, congestion charging will have a big impact on traffic, which is also being enabled by this government. The second spine for public transport wont work effectively without a better bypass to take through traffic off the waterfront (and any good congestion charging scheme enables traffic to bypass it because public transport does not do well serving most demand that does not start or terminate in the central city). Furthermore, just converting lanes on the waterfront to bus lanes will make congestion worse, which backs up to buses elsewhere in the network.
The third bullet has a point. Not building a proper bypass under Te Aro will worsen the severance due to SH1, but the Greens spent years campaigning against a cut and cover tunnel under Te Aro to fix this. Nothing will magically fix this problem, short of kneecapping the economy and demand for travel.
Yes it is a low value project, but it underestimates the real lifecycle benefits of tunnels (which last for much longer than any appraisal period). It is fair to argue about the opportunity cost of the money, but then I don't think the people pushing this want people to pay lower taxes and spend the money themselves! The Greens opposed the project when it had BCRs of 2-5 in the 1990s, with a much higher discount rate and 25 year appraisal period. It is difficult to believe that if it had a BCR of 5 or 10 the opposition would change, it is a blanket opposition to any new road capacity regardless of whether it is priced or not.
The whole wording of the opposition is childish and sneering towards people's choices. The language that sneers at ""popping down to Moore Wilsons” and “going to pick the kids up cos it’s raining”" is misanthropic. So what if people want to do that, as long as they pay at peak times. Most people can't live within walking or cycling distances of where they want to go.
These groups stopped Wellington getting a proper bypass in the 1990s and beyond, and the blight of having at at-grade SH1 through Te Aro is because of this philosophy.
Could it be better? Yes. Should there be pricing? Yes. Should it mean the tunnels shouldn't proceed? No.
This is half serious, half humourous, because let’s face it, a majority probably wont vote, and a fair number will vote for MORE council, MORE spending, MORE stopping people doing things they don’t like and MORE making people do things they want. A fair number of people look at candidates who use clichés like “sustainable”, “equitable” and “inclusive”, and go “oh yes more of that”.
NZ isn’t like the UK, where local elections happen every year (different councils) and most candidates are party political. Those elections are used by voters to send signals about central government, which is frankly nuts. There is next to no value in voting for candidates because you like the National-led government or you hate it, because by-and-large, it wont make much difference at all. Sure there are Labour, ACT and Greens candidates, which is useful if you know you like or don’t like the party, but unlike Parliament most people who are party aligned don’t caucus together or vote identically.
In short, judge them as individuals more than their labels.
For my sins, I’m in Eastern Ward, so I’ll run through the Mayor, the City Council Eastern Ward, the Regional Council Wellington Ward and finally the Maori Ward vote.
MAYOR
Let’s not elect Andrew Little. The failed unionist popinjay who is looking for a sinecure in the twilight of his political career doesn’t deserve to be Mayor of Wellington. He’ll be better than the nice but dim Tory Whanau, but so would most Councillors. He wont list making Ramallah a sister city as an “achievement”, but part of his campaign is about “making public transport cheaper” which is literally nothing to do with Wellington City Council. It is a Regional Council responsibility. So he’s a pontificating poseur. Wellington has a dearth of significant private businesses located in the CBD, and is suffering the closure of retail and hospitality as the city slowly decays. A man who’s spent his life fighting employers and private enterprise and oversaw the irrelevance of unions he came to lead is not the person to revitalise Wellington. The fact he led student unions, including of course opposing voluntary membership of student unions should consign him to the dustbin of history along with the Berlin Wall. Rank him second to last.
I’m ranking Josh Harford of the Aotearoa New Zealand Silly Hat Party first. He is one of the smartest people standing for Mayor, and his vision for optimism is a good one. Sure some might say he is a joke candidate (and he is far cleverer, more subversive and interesting that the nihilistic William Pennywize, and there are enough unfunny clowns about), and you might say I am chosing him because I know him (although he's not the only candidate I know). In all seriousness, if he got elected it would uplift the optimism and publicity for Wellington more than any other candidates combined. Imagine the headlines if Wellington elected a young man with a sense of humour, sense of drive, sound academic record and proven willingness to work well with people across political spectrums. Leftie journalists will highlight his ethnic minority heritage, which he does not and which does him credit. He is his own man, and really will revitalise the city.
Now we all know he isn’t sure thing, so who to rank after Harford? There are three other groups of candidates. Lefties, righties and the ones you will laugh at.
Alex Baker is the Green candidate without being branded “Green” and talks in slogans. His priorities are “affordability” (which means rates, rents, house prices and transport costs – but it’s unclear how he can keep all of these down), “jobs” and “sustainability”. He wants land value rates, which on its own is worth considering, but he also wants to “complete the Golden Mile” (which will slow down bus services by eliminating the ability of buses to pass) and focus on bike and bus lanes to get the city “moving”, although there is no evidence this will make any material difference. His focus on climate change action isn’t credible to control spending or promote business. His ambitions suggest he will spend more money. Rank him last.
Scott Caldwell is to left and on X is known as the Scoot Foundation. He’s pretty smart, keen on more intensive development and is a housing abundance supporter. That’s good in itself. He’s dreaming if he thinks central government will pay more rates, he’s also dreaming to push an underground rail link through reclaimed land. However, having someone so pro-housing construction and antithetical to heritage protection is worth supporting over others. Rank him above Little.
Diane Calvert is a safe pair of hands and eyes on Council. She supports fiscal prudence and her Wellington Plan has a lot of merit. She wants to speed up consenting, focus on core services and maintaining assets and downscale the upgrade to Courtenay Place, and abandon the ludicrous Harbour Quays bus corridor proposal (which will worsen traffic and weaken the Golden Mile bus core). Sure, she’s no libertarian, no free-market liberal, but she’d be far more friendly towards revitalising the decaying private sector than Little. Rank her second or third.
Ray Chung’s entire campaign has been overshadowed by his ill-considered comments, from some time ago, about Tory Whanau. He's said a lot of things that get judged poorly in 2025, but the chap is 75. He’s committed to zero rates increases, which is ambitious, but a good goal, along with eliminating non-core activities. It’s difficult to disagree with that. Leftwing journalist from the Spinoff (!) Joel McManus did a hitjob on him which is hard to completely look past, and indicates he is unlikely to be the best choice for Mayor. He’s a useful Councillor as an antagonist to wasteful leftwing virtue signallers, but as Mayor he should be ranked below the better ones on the right. I’d put him above Little of course, but below Calvert and Tiefenbacher.
Rob Goulden has been around forever, but having been banned from Taxpayer Union events, it’s indicative that he too angry and combative. Arguably he’s on the right, but it’s not clear what he really wants and that’s not worth giving time to. There’s a lack of detail around prioritisation, cutting spending and scrutinising expenditure. I’d put him above Little, but only just.
Kelvin Hastie is another leftwing candidate whose weaknesses include being an arts promoter and venue operator, indicating he is likely to spend more on the arts. He talks of “sustainable growth” (any growth would be nice), and is committed to “affordable housing” without saying how. The Spinoff claims he wants to sell council housing to first home buyers, and supports the long-tunnel under Te Aro proposal (which isn’t happening and Council wouldn’t fund anyway). He has no chance, but rank him above Little.
Donald McDonald is well known because nobody really understands what he is promoting, bless him. Still he seems harmless enough.
William Pennywize isn’t funny.
Joan Shi seems fairly sound, focusing on core infrastructure and a business friendly environment, but also talk about “affordable public transport” (not up to the City Council). If she had a chance, I’d rank her reasonably, and certainly above Little, Goulden and Hastie, but not much depth here.
Karl Tiefenbacher has a solid record as an entrepreneur, and clearly has a chance as a centre-right candidate against Little. His support for faster consenting for housing, more scrutiny on the quality of cycle lane spending and constraining spending (and he understand the role of the City Council) makes him a strong contender. I’d rank him a strong third after Harford and Calvert.
CITY COUNCIL EASTERN WARD
Three councillors need to be elected here. Five are reasonable choices.
Ken Ah Kuoi: His name is dotted all over the ward, and is keen on fiscal prudence and focusing on “core services”, being part of the Independent Together team which is loosely affiliated. Fluent in Samoan as well. I’d rank him highly.
Alex Baker: See above. Don’t rank the Green in drag.
Chris Calvi-Freeman: He’s a bit of a leftie, but he knows transport policy well as a transport planner. He’d be an asset in Council and is pushing for the 2nd Mt Victoria Tunnel to have good facilities for al modes, which should not be controversial. He’s no ideologue on these matters, although his views on other subjects are less known. I’d rank him highly.
Trish Given: She’s a lot of a leftie. Promoting homes for all (how?), wants to future-proof the city against climate change (how?) and talks about a “fairer” city (which usually is coding for higher rates and more spending). Her website indicates she wants a very active council, so she’ll support much higher rates and spending. Don’t rank her.
Rob Goulden: See above. You might prefer him over the green/left, but that’s it.
Luke Kuggeleijn: The sole ACT candidate is a young man keen on avoiding wasteful spending, like the Golden Mile project. Standing for ACT in this ward full of lefties is brave in itself, so rank him highly, he’ll need it, and if he wins he'll be a breath of fresh air to shake this Council up into being more efficient and smaller.
Michelle McGuire: As with Ah Kuoi, she is with Independent Together with the focus on core spending and rates control. She has a private sector background. I’d rank her fairly highly.
Thomas G.P. Morgan: He has had nearly 30 years’ interest in local government, he uses his profile to talk about more… bus shelters. He has a lot of ideas, but I’m unsure that’s what is needed. I’m not ranking him highly.
Sam O’Brien: The Labour candidate is an urban planner, which is reason enough to rank him very lowly. He wants an affordable, accessible, resilient city, but clearly he wants to direct people’s property and businesses. He has a good chance of getting elected so rank him very low.
Jonny Osborne: A public servant standing for the Greens is enough to rank him the lowest. Like Andrew Little, he thinks he is standing for the regional council calling for “cheaper and reliable” public transport which is mostly regional not city council business. He’ll want more council and higher rates. Rank last.
Karl Tiefenbacher: See above, he’s worth a shot. Rank highly. He'll be an asset in Council.
WELLINGTON REGIONAL COUNCIL - WELLINGTON CONSTITUENCY
Five councillors to be elected here. It’s slim pickings. I can only get enthused about two, another three I might hold my nose and choose just to stop the hardened socialists.
Sarah Free: Was a Green City Councillor, now standing as an independent for the regional council. She’s not the worst option, being obviously a leftie she’ll back rates increases and more council spending and control. However, I’d rank her above the actual Green and Labour candidates. Middling ranking.
Glenda Hughes: She was a regional councillor before losing last time, and is trying again. Centre-right (former Nat), fiscally conservative, former cop and media minder, she’s safer with ratepayers’ money than the lefties. She should be one of the top five.
Alice Claire Hurdle: ACT’s candidate is the only one clearly offering a change of direction. Wanting less red tape on farms and businesses, and cost effective transport solutions, she will be valuable in constraining the ever expansionist regional council. Rank her first.
Tom James: This Labour candidate has as his top priority “faster, cheaper and more reliable” public transport, which is going to mean higher rates. For him “tackling climate change needs to be at the heart of our council’s work”, not core infrastructure or addressing key local issues. This makes him likely to hike rates, restrict development and virtue signal. Rank very lowly.
Tom Kay: Green in drag. He cares about our communities and environment, wants us safe from the impacts of climate change, with “cheaper, faster” buses. He will focus on protecting and restoring streams, rivers and wetlands, and reducing emissions. We don’t need an environmental scientist making the regional council a greater drag on development, and hiking rates. Rank lowly.
Mark Kelynack: It’s unclear really what he believes in, except much better public transport including a passenger reward scheme it seems. He seems practical, and the lack of ambition for the regional council doing more deserves a better ranking than the lefties. Maybe deserves to be in the top five.
Belinda McFadgen: Her career has been on environmental policymaking, science and law. She wants climate resilience, cost effective solutions and improving waterways. So she says she is evidence based, without the rhetoric of the lefties. She’s in the middling group, maybe above Sarah Free.
Henry Peach: Worst of the Green candidates, just say no.
Daran Ponter: The Regional Council chair and Labour candidate, he’s the Andrew Little of the regional council. This former public servant who was involved in the expansion of local government powers with the “power of general competence” wants more regional council rates, power and control. It’s telling that the second thing he lists is “lifting driver wages”, as if that delivers outcomes for bus customers or ratepayers. He’s a socialist who wants to end competitive tendering for public transport, lowering farebox recovery for public transport, and restoring wetlands. He is part of the problem of a regional council that is inflating rates and its role. Rank him very low.
Yadana Saw: Better of the Green candidates, but like all of the candidates (except Hurdle and Woolf) she is committed to hiking rates to increase pay above market rates at the council, and like Ponter talks of increasing public ownership of public transport, for ideological reasons (including the 18 new trains 90% funded by taxpayers through a central government she opposes). Just say no to her too.
Simon Woolf: By regional council standards he’s centre-right, but he’s really a centrist and quite sensible. Going to be much less keen on rates rises and ideological based expansion of the regional council’s functions. Rank him number two.
MAORI WARDS
Just say no. The last Maori ward city councillor won with only 872 votes. The lowest winning general ward city councillor had 2841 votes. It’s disproportionately unfair for there to be one councillor with so few votes having the same power as those with over three times as many. That’s without the more fundamental argument that it’s wrong to divide the electorate by ethnic identity, and treat that single councillor as the authentic voice of Maori in the city. Politicians talk about reducing division and working collaboratively. In a liberal democracy, voters are represented by whoever is elected by their constituents, including those who many voters disagree with. STV enables preferences to get the most preferred candidates elected. Maori voters included, and their preferences will be as varied as any other voters.
I remember the time before what socialists call the “neo-liberal” era which “sold out” the country to “rampant capitalism”. Sure I was at school, at the time when people and businesses had to plan weeks ahead to get the Post Office to install a phone line (no mobile phones then, as the Post Office hadn’t deemed that to be appropriate until 1987, even though Australia had had a limited carphone mobile service from 1981 and the UK had launched mobile telephony in 1985).
It was an era when the 100% state owned Air NZ had to get Cabinet approval to buy new airliners, and was made to buy Rolls Royce engines for its Boeing 747s, because it was thought it might improve trade prospects more generally, even though the airline had the spares and the staff training for General Electric engines (and the Board had recommended such aircraft). Such is the ways of nationalised industries.
It was also an era when phones calls beyond your local calling area (which in Wellington did not include Kapiti) cost tens of cents a minute, so a ten minute call (remember no SMS or email) to Auckland might cost several dollars. Phone calls internationally cost dollars a minute, so twice a year my grandmother would talk to her sister in Scotland, for birthdays, for around 10 minutes. Those calls cost $30-$40, and it wasn’t because of technology, it was because the Post Office used money from phone calls to cross subsidise its unprofitable postal monopoly. Then there was the Post Office Savings Bank, a government bank that at a time of double digit inflation had children’s “savings” accounts paying 2% interest. Effectively a scheme for the state to steal savings from children, but hey it wasn’t privatised nor “foreign-owned” (strange how supposedly “anti-racist” socialists are so agitated about foreigners when they own businesses they use), so it was great - the socialists got kids' money to spend on "the People" (which is of course what they always say).
Wellingtonians 40 plus might remember the Wellington domestic terminal, later the Air NZ domestic terminal, which on a windy wet day would leak, with the lino floor flooded, being drafty with not enough seats for people waiting for flights. Until (foreign and local capitalist owned) Ansett NZ was allowed to fly domestically, all jet flights were boarded through steps in the wintery Wellington windy rain. The Government and Wellington City Council argued over decades about who should pay for a new one. They would also remember Wellington City Transport, which was 100% owned by the City Council and subsidised by ratepayers, so that on Sunday evenings hardly any buses ran at all, all of the routes terminated in the city centre (needed more buses and drivers for that, and the Tramways Union would hold the city to ransom if it didn’t get what it wanted). New buses required the Council to order them, and as a result the fleet would be on its last legs before new vehicles would get ordered. 30 year old diesel buses would be operating (the economic life of a diesel bus is around 15 years) and of course Wellington’s trolley bus infrastructure would be patched up for decades.
None of this is reflected on by Max Rashbrooke in the Spinoff. He wrote a piece last week that followed on from the rather awkward set of comments between David Seymour, Chris Luxon and Nicola Willis which indicated various interest in looking at further privatisation, but unfortunately Rashbrooke didn’t demonstrate a great deal of depth in thinking. Most of it was parroting the claims and slogans of former union economist Bill Rosenberg, and high level papers written overseas by leftwing researchers.
I couldn't resist, it was so full of nonsense, it deserves a response:
-“Privatised TranzRail had an appalling safety record, its staff dying at work at eight times the national average. And while cutting maintenance to a level Rosenberg labelled “abysmal”” What was the safety record before privatisation, before SOE status, before corporatisation (before there was safety regulation of rail)? Rosenberg, a former CTU economist bases the maintenance level on “what”? Bear in mind that in 1984 Booz Allen reported on how the rail network had been over-maintained in places, but also how
-“Fay Richwhite and their fellow owners took out at least $370m in profits from a firm for which they had paid just $328m”. Dividends over a 12 year period, but of course taxpayers have never taken a dividend from Kiwirail or NZRC, ever. Socialists need to decide if the state owning trading enterprises is to make money from them for “the People”, or for them to be moneypits for the “Public Good”, but that isn’t clear. Truth is most are primarily commercial but they might want certain services delivered at taxpayer expense, but this doesn’t require entire operations to be operated Soviet style.
-“Helen Clark’s Labour government was then forced to repurchase the railways, creating KiwiRail as we now know it. The whole episode cost the state around $4bn, according to then business commentator Brian Gaynor”. Nobody was forced to repurchase it, in fact there were three transactions from buying the Auckland track for $81m (Treasury valued it at $20m), buying the network and then buying the whole business. If nothing had happened, it still would exist, it just would have seen a series of lines close that carry little traffic, and the state has poured much more into Kiwirail since. For what end though?
-“Profits flowing offshore to wealthy interests rather than ordinary New Zealanders” What profits? Kiwirail has never generated a dividend, and besides “ordinary New Zealanders” wouldn’t get it, it would go to the Minister of Finance to wash in with other spending.
-“The maddest examples have come when monopolies – water, rail – have been sold to private firms, even though competition is the only thing that makes markets work” Rail isn’t a monopoly, and in NZ water hasn’t been privatised (and corporatisation was opposed by economists like Rosenberg in the 1990s, see the resistance of the Alliance to the creation of Watercare Services, and demonstrates the utter failure of the socialist model of democratic control of the provision of services.
-“A private monopoly is the worst of both worlds: no competition-based incentives to improve, and no public-good ethos pushing the organisation to look out for citizens’ interests”. Do tell us about this public-good ethos, the one that saw the Post Office take weeks to install phone lines, that gouged consumers for toll calls, that saw rampant theft of freight on the railways as a monopoly government department (it had a statutory monopoly until 1983 on long haul freight), the Post Office Savings Bank that gave kids 2% interest on savings accounts when inflation was in double digits. Please!
-“in the UK, privatised railways have been such a disaster – massively increasing costs with no corresponding rise in quality”. If you think rail travel in the UK is no different in quality today compared to the era of British Rail you need help. By any measure, frequency, number of routes, reliability, speed and capacity, and indeed patronage (which has grown to record level turning round decades of patronage decline), it is a remarkable transformation. Yes subsidies have spiralled as well, but it’s overly simplistic to think the UK has a private rail system now, as Network Rail effectively renationalised the network over 20 years ago, and most services are franchised (with the franchisees either paying to operate services on routes that are commercially viable, or pay to operate those that are not). Furthermore, rail freight volumes have increased 80% since 1983, hardly a failure if a key goal is to shift more freight off of congested roads. Socialists (mainly the unions that can’t shut down the entire system with a strike anymore) say privatisation didn’t cause the rise in patronage, but if privatisation “harmed” services, wouldn’t people have just abandoned rail in favour of buses and driving? Well of course they didn’t. The system has been highly flawed, that’s for sure, mainly because it is highly politicised and Train Operating Companies have been poorly incentivised to control costs (because their main client isn’t their customers but the state), but that’s an argument for less state control, not renationalisation. As usual, it's much more complex than simple slogans
-"Even worse has been the privatisation of British water services, whereby firms have extracted tens of billions of pounds in shareholder dividends, hiked water fees and discharged large amounts of effluent into local waterways." Yet DIA’s own report on the Three Waters reforms noted the performance of English water companies exceeded that of any in New Zealand, and Scottish Water. A huge amount of investment has gone into renewing water infrastructure in England, in fact OfWat requires it, and regulates water user fees. New Zealand HAS the model the UK had before privatisation and it’s an abject failure. NZ has local democratic control of the water and waste water system, and it is falling apart in many centres. It doesn’t generate dividends, it charges people based on the value of their property, not what they use, and effluent gets discharged into waterways regularly. We have socialist water and it doesn’t work.
-"Privatised bus companies, the OECD concluded, are cheaper than public ones only because they cut wages." This is simply false. The OECD did not conclude that, the link is to a report on a roundtable discussion involving case studies in four countries, three in Europe, plus the USA (which has few privatised urban bus services). It is not an official report from the OECD. EVEN then it said that private operators can be more innovative than public ones. The idea you can compare the performance of the Yellow Bus Company in Auckland in the 90s (let alone the ARA), or Wellington City Transport in the 1980s to their equivalents today is extraordinary. When bus services were moved into the contracting model, there were savings of around 15-20% which enabled more routes and frequencies to be offered, but it did stop the Tramways Union from being able to shut down an entire bus network when it didn’t get what it wanted.
-"Even when three of them were fully state-owned, the “gentailers” that supply our electricity were able to operate rather like a cartel, generating excess profits and freezing out potential competitors." Wait what? So it ISN’T state ownership you oppose, it is running trading enterprises as “enterprises”. So you don’t want the state to make dividends from its businesses? Well we did the socialist model before, for decades. It saw massive investment in generating capacity (politicians liked power stations then), but let the local distribution network fall apart (politicians don’t like charging people for what they use), a bit like water. Were they operating as a cartel? Well shouldn’t the Commerce Commission be dealing with that, in which case, maybe this claim of it being a cartel (which is serious), is actually not true? Maybe if they were all fully private, they could be properly subject to scrutiny because politicians wouldn’t be worried about loss of dividends. In fact there may be a case for structural separation of generation from retail, but that's about ownership. Not a lot of coherence in the issue here is there?
-US healthcare – not voucher-based, admittedly, but the nearest thing the developed world has to a private health system – is a catastrophe. It’s not the nearest thing the developed world has to a private health system, as there are umpteen other examples. Nobody, literally nobody advocating for more market-oriented healthcare thinks the over-regulated, highly subsidised US model (Medicare and Medicaid are uncapped liabilities to US taxpayers) is a model for anyone to follow, but it doesn’t stop socialists from the Anglosphere blanking out Switzerland, France, Singapore or the Netherlands. Australia’s system is a mixed model, but that doesn’t fit the narrative.
After all of this selective agitprop (yes education vouchers “fail” but let’s not mention Sweden which to this day maintains one of the most open market education systems in the world, but that doesn’t fit either), we get the philosophy:
There is a basic philosophical issue: public services – health, education – are things people deserve as of right, as a basic entitlement of citizenship. They are not the equivalent of buying, say, another item of clothing, and treating them as mere consumer goods risks degrading their deep importance.
Hold on, most of this article focuses on railways, then water, and talks about electricity, then ends with health and education. Is the claim that the state has to provide everything that is a “basic entitlement of citizenship”? Should the state own all housing? Should the farms be state owned and all food supplied by state shops (after all food is MORE important than health and education, because most can last months or years without health and education, nobody can last more than weeks without food)? The sneering comment that “treating them as mere consumer goods” says a lot about attitudes, that when the public are allowed to choose it is “degrading”. Really?
If, as is often the case, privatisation means charging for something once paid out of taxes, it is likely to have a harmful effect on poorer households. Why? Because poorer households use the most electricity, rail freight or water? Of course they don’t, but is the argument here that everything people need should be free at the point of use, but that half the population should pay taxes so the others don’t? We can see what “free” water has done to demand for it, and the infrastructure. We see it with roads everyday where consumers aren’t exposed directly to the costs of what they use, with the result of queuing. Public health systems are all about queuing after all, socialists seem to think that is fair, as long as the workers get paid well, the workers not in those systems should be grateful “is isn’t ‘Merica”!
You see the problem is, the common people are stupid and ignorant, whereas public servants, producer unions (especially those run by people paid much more than the average wage) and politicians are enlightened, capable and benevolent…
People don’t generally know what healthcare they need; in education, research suggests “competition” between schools is often driven either by parents making calls based on external factors like uniforms, or by prejudiced views about keeping their kids away from certain other children.
Well just give them what you think they deserve, parents are incompetent clearly. The state should probably feed kids too (already started with that). Parents must make lots of bad calls too, so maybe the state should buy groceries, buy clothes, maybe run activities for the children to keep fit and socialise, maybe ensure they don’t have “prejudiced views”, maybe build a sense of community. Maybe we can call them Brigades, give them uniforms. Maybe they can help identify grownups who express “hateful and harmful” views. You can see where this attitude that parents know least can head, but it is exactly the arrogance of people who think because some parents make poor choices, none should be allowed to.
I could go on, there is a misconstruing of how Telecom performed in the 1990s (which from a consumer point of view saw prices plummet across almost all services, essentially enabling people to communicate across the country and internationally affordably for the first time).
The only interesting part of the article is the claim that if only the public could be “involved” in the decision-making of state owned organisations they could be more responsive. This is quaint but delusional. Most people have the time to work, look after their families and then spend quality time enjoying themselves. A small, but vocal minority get involved in activism and inevitably those who will shout the most and get involved the most will be those with spare time or motivation, either because of their political ideology or in many cases simply having time because they are retired or not working. The citing of the “successful German model” for electricity companies is laughable given some of the highest electricity prices for consumers in the EU. If that's success I'd stick with the status quo thank you very much.
It ends with this “We could also entrust frontline public servants with more responsibility, putting them in charge of locating efficiencies and potential innovations” Sure, because public servants are well known to be at the frontline of identifying the most efficient ways of doing things, and innovating with technology and service delivery, that’s why they have jobs they rarely can lose, and don’t get paid based on performance. It's naive at best.
I get that socialists hate private enterprise at worst or are highly sceptical of it. What I don’t get are the absolutely contorted contradictions of, on the one hand hating private enterprise making a lot of money from former state enterprises, and then not wanting the state to make money from them (but rather for taxpayers to subsidise them, for no clear aim other than to make sure people don’t pay for what they use). I absolutely don’t understand how intelligent people who purport to be interested in public policy outcomes parrot agitprop slogans from trade unions. What is the point of the state owning Kiwirail? Is it to get more freight on rail and off of roads? If so, is that the best way to do it? None of this is clear. What is the point of the state owning a power company? To make it cheaper for some consumers? To reduce emissions (which will make it more expensive for someone)? Nobody knows.
Socialists have successfully scaremongered about privatisation in NZ for decades. This scaremongering stopped water getting reformed in the 1990s outside Auckland, and has stopped serious reform of ACC, and making the electricity market more competitive (by the state not having a stake in generation and retail). It’s largely banal slogans pushed by Marxists with a strong vibe of xenophobia, and it deserves to remain back in the 1990s with the Alliance.
POSTSCRIPT: By the way, I am not in favour of privatising prisons. The state has a core function to protect law and order, and to protect citizens from the initiation of violence by individuals and state. Politicians and public servants should be held accountable for the success and failure of managing them, and with the monopoly of the legal power to incarcerate people being quite unique, passing that responsibility to a business - regardless of efficiency - dilutes that accountability.
