John Key MP
National Party Leader

5 May 2008

Labour heads down wrong track for future

National Party Leader John Key says at a time when householders are struggling to pay the weekly bills, Helen Clark’s decision to spend the thick end of a billion dollars to buy back the rail rolling stock does not make any sense.

“Labour is providing a profitable Australian corporate with a big dividend from growth that struggling families and households were due years ago. The light at the end of the tax cut tunnel now looks a lot like it’s a train.

“At a time when skilled Kiwis are leaving in droves, when interest rates, groceries and fuel costs are forcing families further into debt, simply buying back a rail company won’t fix any of that.

“The Labour Government has its priorities wrong. This is the time to be easing the burden on households, not buying the trains off an efficient operator, when there were other ways to maintain services.”

When Toll bought the rolling stock five years ago, its original bid valued Tranzrail at $231 million. Labour is now paying $665 million, and will have to spend hundreds of millions more on rolling stock upgrades which have been planned but delayed due to track access wrangling.

“Labour has paid way over the odds in what is a backward looking investment that will do nothing to improve New Zealand’s productivity.”

Mr Key says National will be stuck with the railways because nobody else will be willing to stump up with the sort of money Labour has just paid.

“Our view would have to be that we would be making the best of a bad situation. The rolling stock would remain state-owned for at least the first term of a National-led Government which is consistent with our SOE policy.

“The reality anyway is that given the very high price, no one would be foolish enough to pay what the taxpayer is about to sink into rail.

“What we really have here is a desperate Labour Government throwing huge amounts of taxpayers’ money around in a desperate attempt to get any sort of bounce in the polls.”

ENDS

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