George Wood urges caution on Auckland rail

While the outgoing Chair of the ARC, Mike Lee, plays politics (he is an Alliance member from way back) in demanding the government cough up money for lavish rail plans that haven't even had any serious investigation done, George Wood talks some commonsense in the NZ Herald. The basic questions that rail enthusiasts, like the ARC, evade and avoid, because they have a grand vision of changing Auckland.

Wood is concerned about accurate costings and whether all these projects are good value for money, he notes "The Northern Busway Project was a good case in point. The final costs were considerably greater (nearly double) than the initial early estimations.". The record of rail project in the US shows on average public transport projects finish 20% above budget.

"A few decades ago the majority of employment was in the Auckland Central Business District. People now find their place of work is in the outer suburbs where they live, or they travel to other parts of the region.

In the case of North Shore City, in excess of 60 per cent of workers do not have to leave that city to find work. These days the majority of the Auckland region's workers never have to travel into the Auckland CBD."

He's right, but the planners still think of Auckland in the 1950s or want to go back to it. Only 11.7% of jobs in Auckland are in the CBD. So you might ask why spending over a billion dollars to service those jobs is worthwhile, particularly when half the people in those jobs don't live anywhere near a railway station or line. Half as many jobs are in Mt Wellington and Penrose, but the planners have no interest in commuters going there.

"In the next three years the operational subsidies provided by ratepayers will amount to $43.3 million. The remaining 60 per cent of this three-year operational cost, which amounts to $108.2 million, comes from petrol taxes and road user charges paid by Auckland's motorists."

So $36 million a year in subsidies, for around 8 million trips a year. So that means every trip carries a $4 subsidy. You might think it would be better if fare payers could pay that, but even if they did, it wouldn't start to cover the capital costs.

"Once the new rolling stock is purchased someone, and again it will probably be the ratepayers and motorists, will then have to pay for the depreciation of this equipment. This will amount to around $12 million a year" Oh and you're forced to pay for the rolling stock new as well of course.

"In 2001 ... we were told that 25 million passengers would be using the metro rail network by 2015. We are still a long way off this figure. The Auckland Regional Transport Authority has now revised its target down to 17 million passenger trips by 2016. This is still a huge increase when last year's annual figure was 7.9 million."

In other words, the massively inflated targets for patronage aren't being met, so the targets get revised and history is rewritten. What does that remind you of?

"Buses operating in the region carry six times the number of passengers carried by our trains. Buses are a far more cost-effective means of providing transport services to all our communities."

Indeed he is right. Buses carry around 43 million trips a year, (2007/2008) compared to around 8 million on rail. Some bus services are unsubsidised, but the annual subsidy total in Auckland for buses is around $93 million, so around $2.16 per trip. Cheaper than rail certainly, and it would be cheaper still if the ARC hadn't poured so much into contracting over commercial routes, and decimating profitable bus routes with the competing rail services. Subsidies were only $45 million in 2005, with similar levels of patronage, so the ARC geniuses have more than doubled subsidies with no net increase in patronage. Given the big increases to and from the North Shore with the new busway, this means significant declines on the Isthmus. This was before the recession.

So while George Wood is largely right, I wouldn't take the ARC or the new Supercity as the great model in fiscal prudence in looking after public transport in Auckland. I most certainly wouldn't think Mike Lee has any good record in knowing how to spend ratepayers' money. It's about time Auckland and central government took stock before pouring more money into Auckland's public transport networks.

Attacking bankers or how to chase away an industry

Gordon Brown has promised to crack down on bankers' pay and bonuses, as he attempts to cynically grab support from traditional Labour supporters by playing the envy card.

He says:

"It will mean an end to automatic bank bonuses year after year. It will mean an end to immediate payouts for top management. Any bonuses will be deferred over time so they can be clawed back if they are warranted by long term performance"

He lies that such salaries were to blame for the financial crisis, ignoring the loose credit from the Bank of England over many years, and the kneejerk willingness to bail out all banks with taxpayers' money, rewarding the foolish, whilst the prudent retain them as competition.

Allister Heath in City AM puts it well "pay's role was merely tangential during the current boom and bust – and for that matter, in all previous bubbles.

The main drivers were the ridiculously low interest rate policy pursued for years by a Fed obsessed with preventing all recessions; the crippling East-West imbalances in savings and investment flows ....; global rules which promoted low capital reserves for banks, with many loopholes; and a giant intellectual error which thought that bubbles were impossible, that house prices would never fall and that statistical models had allowed bankers and regulators to control risk completely."

furthermore "All the restrictions on bonuses being dreamt up by the Fed or G20 would have done nothing to stop the bubble. We would have had sub-prime and CDOs. Life is not that easy; what a shame nobody wants to know."

So the UK will be the first Western economy to directly regulate the salaries in the banking sector, a measure that will simply chase away the financial sector from the UK. Already it is reported that there is a drift east

"HSBC's CEO Mike Geoghegan will now be based in Hong Kong rather than Canary Wharf. This is bad news for London: the world's centre of gravity is moving East. But the real tragedy, judging from his latest anti-City rant yesterday, is that Gordon Brown wants to accelerate this power shift. Our loss will be Asia's gain – but that's the madness of populist politics for you.".

Of course, following that, the envy merchants of the left are pushing for more self destructive policies, with Idiot Savant cheering on Slovenia's crazy new 90% tax rate on salaries and bonuses in the government assisted banking sector. Sounds like a great opportunity for lawyers to find loopholes, be simpler if the banks were left to fail though wouldn't it?

While bankers should be accountable for failure, what makes politicians accountable when they destroy vast quantities of wealth in a moment? Like Gordon Brown did in selling half of the UK's gold reserves in 1997 when gold was at a 20 year low.

Why should anyone trust this man with their money?

Kiwirail's illiterate and foolish fanatics

The NZ Herald report that the government expects Kiwirail to be financially self sustaining is a relief rather than a joy. It's the bare minimum I should hope for.

Meanwhile, the Labour Party, which destroyed $330 million of taxpayers wealth by buying this ailing business, after already letting it off the hook for not paying all track access charges that were owed, is desperately wanting you to pay more of your money to subsidise the freight movements of businesses. Labour can't give a single good reason why the users of rail freight deserve privileged treatment, and besides which, farmers are NOT dependent on Kiwirail. Fertiliser can go by road, and the milk that goes by rail is for Fonterra.

The economically illiterate lobby group "Campaign for Better Transport", which is largely aligned to the Green Party in terms of policies, goes further.

It is a relentless assault on the English language, that combines illiteracy of the language and punctuation with economic illiteracy and a strong hint of paranoid conspiracy theories. It is so damned ignorant that it is no surprise it isn't taken seriously by transport policy makers. I know, since I used to be one.

For starters, who can take seriously the following failures at English:

"Steven Joyce has come out swinging today against Kiwirail, as he says it will loose $1 million per day." Loose what??

"the Campaign For Better Transport (CBT) is questioning the Ministers figures" How many Ministers?

"Recently Joyce said KiwiRail was worth around $360 million dollars which we all know is unbelieveable" Unbelieveable? No, this preteen English standard is unbelievable.

"If I was a business owner I certainly would not put Steven Joyce incharge of quotations, Reeves said." incharge? Another new word. Comma missing too.

"In recent months is has become clear" is what?

"some unusal right wing groups have been producing reports with unusal facts and figures against Kiwirail" unusal? How creative, another new unusual word.

"yet it moves over 15% of the countries freight" What are all the countries?

"the nations rail network" Again, what are the other nations?

"The Campaign For Better Transport would like the Minister of Transport like" Like, whatever?

Poor Jon Reeves, he obviously did so badly at English at school (and CBT doesn't do spell checking) but wait, there's more. He can't even get his facts right.

He claims it is "ridiculous" to value Kiwirail at $360 million. Why? Because he puts forward the ludicrous implication that it be valued at replacement cost. As if anyone would pay replacement cost for it. As if Telecom, or any power lines company could be sold at replacement cost. Jon, it is called a "sunk cost". Money has been put into Kiwirail's assets that can never be recovered. You're no market analyst or businessman. By implication, Toll Rail was stupid to sell it at such a low cost and the sharemarket so badly wrong at undervaluing it, except for one point. It is worth $360 million because that's the value it might generate either in net revenues over time, and by implication, if sold on the open market.

Oh the Kaimai Tunnel? It is 8.879 km long, not 9.5 km long. Doesn't take much to check that fact, but then you're as good with facts as you are with spelling and grammar.

You wouldn't put Steven Joyce in charge of quotations if you were a business owner? Well he was a business owner, he was a millionaire at age 38 thanks to a business he set up at age 21. I don't think he really could give a damn what you think about his business acumen. Do you?

You claim that unusal (sic) right wing groups have been producing unusal (sic) facts and figures against Kiwirail. Who are these? What evidence do you have that the trucking lobby has been "working hard" on him, when he rejected their call to abolish road user charges?

You say "The Minister is throwing $8.8 billion dollars at roads so trucks can take away rail freight business", which is a complete non sequitur. The money for roads came from road users, who pay for road maintenance and capital expenditure, and besides, most roads don't compete with railways. Besides it isn't $8.8 billion a year yet you then say "giving Kiwirail only $90 million per year yet it moves over 15% of the countries freight"(sic). The money Kiwirail gets does NOT come from rail users, but from taxpayers. The link is illogical. Coastal shipping moves a fair proportion of freight but gets no subsidy, so what?

I might suggest that besides getting some literate spokespeople, the CBT might start having even a paucity of knowledge about economics and how the transport system is funded and financed, and throw away the paranoid conspiracy theories.

A better approach would be to read this article by Luke Malpass from the Centre for Independent Studies where he says:

"the present Government has only one policy option - the reform, rationalisation and resale of KiwiRail. The difficult reality is that many of the unprofitable lines must be closed while the Government prepares to sell off separate parts of rail to interested parties in the private sector. The rail system needs to shrink substantially to become viable in the long term. Only then will taxpayers be insulated from further political expediency and foolishness.

Without such bold action, rail is going to continue to be a drag on the economy and a constant cost for taxpayers, who have already spent a billion dollars on the business in the past year."

As one sex offender finally is caught...

Like Not PC, I'm not really giving a damn about Roman Polanski finally getting caught. His achievements do not exonerate the predatory and violent treatment of a vulnerable young girl. These reports PC posted tell enough.

However, I am more concerned about this story, thanks also to Not PC. It essentially is the criminalisation of dozens upon dozens of teenage boys in the USA, for having sex, consensual factually (if not legally) with their girlfriend. The age difference is insignificant, but they are not only criminals, but registered sex offenders for life, with their names, faces, addresses constantly updated. In effect, they now have a life sentence of being unable to gain employment, or even find somewhere to live without harassment.

This is the consequence of a draconian blind war on sex crimes. The result is that the biggest victim isn't the girlfriend, but the "offender" who has, by and large, offended the precious feelings of the callous puritans.

It is a result Iran and the Taliban would sympathise about. It is a result warmly embraced by the Republicans and the Democrats.

Oh and in case you think New Zealand is immune from this, remember the hysteria from compassionate conservatives when Labour tried to amend the law to stop silly prosecutions of teenagers for fooling around with each other? Of course it couldn't do it.

Are you licensed to look after your neighbour's children?

For you see, in Britain, you might be breaking the law if you aren't.

According to The Times, Two Police officers regularly looked after each others' kids while they were on shift work. A perfectly normal voluntary arrangement between parents, for mutual benefit, and the benefit of the kids who have parents willing to work odd hours, to help raise the family.

You might think the state would simply let this be, or indeed private citizens would think nothing of it. No.

You see in Britain, there is an insipid culture that frankly would not have looked out of place in the former German Democratic Republic (that's "communist east Germany" for the confused). A neighbour noticed this arrangement and tipped off, Ofsted. Ofsted? The Office for Standards in Education, Children's Services and Skills. It has existed since 2007, and of course how did Britain cope without it?

You see if you look after children, who you are not related to, for more than two hours, for "reward", you must have a licence. You need to have First Aid training, training in childcare (amazing how parents can manage without this!) and be checked as to whether you have a criminal record. Reward in this case was the reciprocal provision of the service. However, money, baking a cake or giving a lift would also be a reward.

Yes, you read right. You cannot look after someone else's children for reward without a licence.

So the vile Stasi agent style neighbour having contacted Ofsted resulted in an inspector coming to visit to ask questions.

THIS is New Labour, this is the Nanny State going yet another step into intruding into the private arrangements of citizens. It follows on from the law that requires anyone who regularly deals informally with children, whether visiting a school or giving lifts to kids to sports clubs, to be vetted not just for crimes, but suspicions by private citizens that someone is a bit weird. It should send shivers up and down the spines of most people. It has shades of the Orwellian vision Dr. Cindy Kiro shared with the Green Party, had for New Zealand families.

At what point do people stand up and say no. When parents have a door knock every year to interview little Sam and Sarah, asking them if they ever get hit, ever see daddy's penis, ever hear anything racist from mummy and daddy, ever see them put recyclable items in with the rubbish, ever see any books that confuse them, ever get scared of mummy and daddy, what they eat and drink, whether they exercise much, etc etc?

Meanwhile, do people think it's ok for the state to licence almost every arrangements parents have with other adults involving their kids?

New Labour’s Britain, with full consent by the Tories and Liberal Democrats, doesn’t trust parents to make judgments about who should look after their kids, but apparently you’re all meant to trust the state.

So when a registered, state approved person next rapes a kid, will the parents be able to sue Nanny State for failing to protect them? No, of course not. It is more intrusion, and no more responsibility.

Those providing childcare should not rely on the state to approve its workers. No. Parents should ask childcare centres to demonstrate they do criminal vetting of their staff, and provide references. Most parents will only entrust their kids to centres who prove their safety and care for the kids. To make this a state regulated activity is in effect to nationalise it. It says to parents, don’t worry, the state has vetted everyone, they are trained, they are ok.

It says to parents, don’t you make your own judgment, the state knows better, and more disturbingly, it says that the state has the right to interfere in any private arrangements you make with others. In short, you can’t be trusted. Everyone’s a suspect until proven innocent. What sort of country does that make it then?