Chinese Government Will Own Penlink Highway
If the bid by a Chinese construction company goes ahead, the Chinese Government will effectively finance the Penlink highway and own it for the next 25 years.
This is because the group offering to finance and build it is majority owned by the Chinese Government.
We should not allow an overseas government to own a major piece of transport infrastructure and despite comments from Ministers and Auckland Chamber of Commerce head Michael Barnett, the New Zealand Government could easily finance the construction.
In an article in the NZ Herald on February 26th 2012, financial commentator Bernard Hickey wrote “It's time the Reserve Bank of New Zealand started printing money and lending to our government to build houses and infrastructure”. “We've been here before and right now our major trading partners are doing exactly this”.
The findings of an International Monetary Fund report released in August 2012 titled “The Chicago Plan Revisited” fully support funding of that nature.
The report recommends funding direct from the central bank (the government owned Reserve Bank) with no attached interest cost, which could be used for infrastructure development.
Michael Barnett is wrong when he states it doesn’t really matter where the money comes from, because will cost twice as much if the project is financed from overseas.
Tolls would not be necessary If the money comes from the Reserve Bank.
The Public Finance Act (1989) permits the borrowing of funds from the Reserve Bank of NZ on terms favourable to the public interest.