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Q + A: Panel Discussion Aug 12

Q + A
Panel Discussion 1
Hosted by GREG BOYED

GREG Our panel this week – Dr Bryce Edwards from Otago University; head of the CTU, Helen Kelly; and Matthew Hooton, a public-affairs consultant and columnist. Welcome to you all. First of all, he’s been in the job three years now – Jim Quinn. What sort of a job, Bryce, is he doing at the head of our rail?

Dr BRYCE EDWARDS – Political Scientist
Oh, as a chief executive of a private business, he’s doing probably a great job, and that’s what he’s supposed to be doing. But this is the problem. We expect KiwiRail to be both a service provider and a business, and it doesn’t fit. It’s like TVNZ. Many people expect it to be a public broadcaster and return lots of dividends to the government. It’s a something that can’t quite fit, and that’s the problem. We don’t expect other, you know, publically owned things like swimming pools or whatever to make a profit, but this is what all parties of left and right are expecting this SOE to be, and it’s can’t be. Rail’s not going to make profits, you know, so he’s in a very difficult situation. He’s having to cut costs. He’s having to do everything on low-cost price thing. There’s always going to be problems with that if you run it like a business.

GREG We’re getting a lot of feedback, apparently, about the Chinese trains and people saying it should have stayed here; they should’ve been built in Dunedin.


GREG It was always going to be a losing one, wasn’t it?

No, and the price that the workshops thought they could do it for was very close to the Chinese in the end when into account the community benefit of having those jobs and the whole social infrastructure of places like Dunedin and the Hutt where they have those workshops. And those trains have been a disaster. Your question – how’s he done? Actually, when are chief executives accountable for these sorts of disasters? My understanding is they’re having to replace all the buckles on the old trains because they don’t fit with the buckles on the new trains. I mean, there’s just disaster after disaster. We’ve got these sleepers rotting all around the place. And, you know, if you did look at the service as a service, you could use it to create employment. You know, employment’s gone up this week. You could use it to build infrastructure that really clears up some of our roading costs in the future. It’s a very very short-sighted approach he’s taking.

MATTHEW HOOTON – Political Consultant
That’s right. I think it’s an extraordinary idea that the New Zealand taxpayer should subsidise this business so that it becomes cheaper for Fonterra to move milk powder around New Zealand or Solid Energy to move coal around New Zealand or importers of wine to—

HELEN What if it creates jobs? What if it trains workers?

MATTHEW Well, for goodness sake, it’s not a service; it’s a business.

HELEN What if it keeps communities running?

MATTHEW Of course it’s a business, and it’s actually an extremely vulnerable business—

GREG Actually, just on the point of jobs here, Helen, this is a number we came across this morning. It’s absolutely astounding. In 1983, New Zealand Rail had 23,000 employees. It’s now got 4000. Possibly some of them may not have been doing much if you can still run it with 4000.

HELEN Well, of course, in those days it was regulated and you couldn’t move stuff by truck, and so you had to have that sort rail infrastructure to move stuff around. We’ve now got a competitive market. People would argue about whether we should have some restrictions on what can go on our roads. The point he made about Gisborne – I mean, the forestry industry in Gisborne is absolutely reliant on that train track being fixed up and moving stuff through. I drove that road the other day to Wairoa from Napier. Forestry trucks – you know, thousands of them bloody coming over that tiny road. Very vulnerable to slips and erosion, that road. And so you actually have to have a long-term view of what the country’s going to do in the future.

MATTHEW This is what people have said—

GREG The Gisborne line, though, is a no-go. That’s it.

MATTHEW Well, this is right. This is what people have said, you know, for a century. Jim Quinn, when he began this job, had a great line. He said he was running the world’s oldest start-up. He understood that he was running a business – being appointed to run a business – that really had no future. It was absolutely absurd that Michael Cullen paid $665 million. It wasn’t worth anything. It had no commercial future. And rail’s always been like this in New Zealand. There’s been a romantic part of it. When rail began in New Zealand in 1870, the forecast population for this country was 50 million, and that’s why we have those enormous train stations in Auckland.

HELEN Yeah, but, Matthew—

MATTHEW Then in the 1900s when they built the enormous Dunedin train station infrastructure, they felt that the New Zealand population would be 15 million. So there’s always been these people who have believed in this wonderful future for rail that actually doesn’t exist in a four million population—

GREG Okay, let’s not— Rail, when all’s said and done, the type of thing we’re talking about is a fairly archaic way of moving things around, isn’t it?

BRYCE It does have social goods that it produces, and that’s why it shouldn’t necessarily be run as a SOE along business lines.

MATTHEW Sorry, what are these social goods, please?

HELEN It’s not archaic. Actually, it’s a efficient—

MATTHEW What are these social goods?

BRYCE Keeping trucks off the roads—

HELEN Yeah, it’s not an archaic service—

BRYCE Employing people.

HELEN It’s a very efficient way of moving—

MATTHEW So all businesses improve— employ people. Again, the idea that for some romantic reason you would employ all these people in this business, you would try and reduce and subsidise the prices to make it cheaper for Fonterra to move dairy products—

HELEN It’s not romantic—

MATTHEW How ridiculous.

HELEN It’s not romantic. It’s efficient, and it’s fast. And the reason that—

MATTHEW Well, it’s not efficient, because it loses money. How can it be efficient if it loses money?

HELEN The reason that it— No.

GREG The elephant in the room here is if you want to go anywhere in Australia – to anywhere in Australia – you can get on a train and eventually get there. Unless you use the ferry, you can’t get from one end of New Zealand to the other on a train, because there’s a big gap of water in the middle, and that’s always going to be the case. And it’s always going to be something rail’s going to have to contend with, isn’t it?

HELEN Yeah, but rail closes the gap. Who closes the gap—?

GREG Well, it doesn’t close the gap. It has use the ferries—

HELEN Yeah, but exactly. If we didn’t have rail ferries, who would be closing that gap? The reality is it’s an effective and efficient way to move freight around this country. If you look at triple bottom lines—

MATTHEW It’s not effective, and it’s not efficient.

HELEN Triple bottom lines, Matthew, instead of just your single bottom line, the reason rail’s in such a disaster is because it was privatised, run down, didn’t work, we needed it—

MATTHEW The reason rail is in a disaster is because the network was built to serve a population of 50 million. When the initial network was built, that was the plan.

HELEN Companies raced in to buy it because they knew it was—

MATTHEW You can’t have—

HELEN They knew it was a—

MATTHEW They believed that Gisborne and Hawke’s Bay would be, you know, two-million-people cities—

GREG Bryce, is there a political mandate to sell this off, though, do you think?

BRYCE Oh, no, it’s not going to be sold, and I don’t—

MATTHEW Who would buy it?

BRYCE I don’t believe it is—

HELEN It’s privatisation by self.

MATTHEW Oh, that is such a silly—

BRYCE It is being run down.

HELEN They’re selling the Hutt workshop—

MATTHEW That is a silly, silly—

HELEN They’re selling the South Island workshops.

GREG The passenger services – if they could sell them, they would. Hard to imagine—

MATTHEW Where’s the privatisation? There’s no buyer for any of these things.

HELEN They’re selling Hillside. They’re selling the passenger lines.

MATTHEW To whom?

HELEN They’re keeping all the responsibility for the infrastructure, which they’re running down. I guarantee in five years’ time there’ll be erosion, there’ll be slips, there’ll be trains not moving. And Jim Quinn says he doesn’t want people being disappointed in five years. We will be disappointed.

GREG So we’re all agreed, though, even if there was someone— if they did want to sell or do want to sell it, there’s no one to actually buy the passenger service?

MATTHEW Of course not.


MATTHEW And it was the people—

HELEN People raced in to buy it when it was for sale.

MATTHEW Toll Holdings, who bought it, they couldn’t believe the turkeys they were dealing with in the Labour Government. They didn’t expect to get a dollar for that company. Instead they were paid 665 million. Imagine the social benefits that could have been delivered—

HELEN Privatisation failure, Matthew. Privatisation failure.

MATTHEW No, nationalisation failure with an idiot finance minister paying 665 million for a company that wasn’t worth anything.

GREG To use a train metaphor, we’re going to pull into the station. I think we all agreed on nothing there.

Q + A
Hosted by GREG BOYED
In response to MMP

GREG Our panel Bryce Edwards, Helen Kelly and Matthew Hooten. 5% looks like it’s probably going to go to 4%.

Dr BRYCE EDWARDS – Political Scientist
No one really knows what’s coming on to this report tomorrow, but everyone’s talking about 4%. I think it’s tinkering. It’s not much different. It’s an arbitrary figure – 5%, 4%. I think Hone Harawira was just making a very good case for getting rid of the threshold. There are no good democratic arguments in favour of having a threshold. It’s a way of— It’s incumbency protection. It’s keeping the parties that are in Parliament there and protecting against new parties coming up. And we haven’t seen any new parties come into Parliament under MMP that haven’t already had an MP, so we need to shake up the party system.

GREG He made a really good point as well, I though, Matthew, you know, using the Bill and Ben example. If people thought there was no threshold, they would vote differently; they would think differently.

MATTHEW HOOTON – Political Consultant
Yeah. Well, it also wouldn’t be the end of the world if there were one or two joke MPs in our Parliament as a result of a 0.8% threshold.

GREG Some could argue there was some there now.

MATTHEW Yeah. But I think there is a coherence to what Hone Harawira was saying – 0.8% makes a certain degree of sense. I think, however, in the end what’s going to be recommended is a 4% threshold and getting rid of the coat-tail issue, and they’ll be the two main aspects of the report.

GREG Helen, do you agree? Coat-tailing gone and 4%?

I think that is going to be the recommendation. I mean, it’s always hard to get a perfect balance, isn’t it? And I think the issue about whether you have a threshold at all really is an important one in terms of stability. I do think there are examples where that doesn’t work, but also whether people can buy themselves a seat. You know, if there’s no threshold, you can just get enough money to get enough publicity to push yourself over the line, so there is an argument that having some threshold requires a collective effort, a community effort to get a party over the line.

GREG All of this, though, you have to say who is going to benefit most, 5% being the best example. You know, it’s going to be great for various parties if it doesn’t, because they’re not going to be able to get in because the threshold is there; we’re going to be able to take them on board. Is it going, Bryce, to be any better for voters? Really, is it going to make much difference?

BRYCE Well, in the last election we had a turnout rate of 69% of eligible voters, so people were turning away from elections in droves. And the party system isn’t exciting them and inspiring them, so I think we should be creating some sort of system where minor parties, new parties might rise up and knock out some of the boring ones, but that’s not happening. So it’s self-interest in terms of what the political parties have been submitting to the Electoral Commission, and tomorrow we find out whether, you know, they’ve been dominated by the parties.

MATTHEW Except there’s not. The irony here is that the National Party has opted for a 5% threshold in its submissions, and the Labour Party has advocated 4%.

BRYCE Well, they might change their mind.

MATTHEW But if you look at their narrow political interests for the next election, it’s National that will gain, in my view, by a reduction to four, and it’s Labour that would gain by keeping it at five, so I wonder if we’ll see the two main parties flipping their positions on that issue.

GREG On the Tory side of the ledger, though, if it stays at 5%, wonderful news for Winston Peters. As far as United Future and ACT go, it couldn’t— you know, going on the last election couldn’t be much worse, could it?

MATTHEW Well, no, and, I mean, Winston Peters, I think his party will get over 5%, so I think he’s in either way, and that could be perhaps something behind his support for 5%.

BRYCE I think so.

MATTHEW The issue is the Conservative Party. The Christian Coalition of Graham Capill got 4.6% in 1996. Christian parties seem to be in that four to five. Now, Colin Craig’s Conservatives got 2.65% with a very short campaign—

HELEN A huge budget funded by him. A personal budget to get himself into Parliament.

MATTHEW Yeah, but it was— I think with more money and more time – more important than the money would be the time – I think he would get 4%. And, of course, that creates, in my view, the most likely outcome of the next election, which is National, Sir Winston Peters as Deputy Prime Minister and the Conservatives Party.

BRYCE Which is why the Government might accept the 4% threshold being advocated tomorrow by the Electoral Commission.

GREG Bryce, going back to a point you made earlier on – actually, it may not have – one of you made earlier on – there has been no new political movement really since the start of the system. You know, off the top of my head, you’d think there’d be a Pacific Island Party.

HELEN Mana. Mana’s new.

BRYCE But they had existing MPs.

GREG They had an existing MP, and they’re along the Maori lines.

HELEN Yeah, but they’re a new party and a new movement.

BRYCE Yeah, but you can’t get into Parliament unless you’ve got an existing MP is the lesson. So new movements can’t come up organically from outside of Parliament, and that’s a great misfortune—

HELEN But they got in through one MP. You said United Future couldn’t get worse. Well, they’ve only got one MP and he won the electorate, so, you know, it’s probably not going to get any better is a better description of what’s happening there.

MATTHEW I don’t think ACT and United Future are really part of the future—

BRYCE They’re dying—

MATTHEW They’re finished.

GREG Let’s talk about the parties voting for the list. This is something we didn’t actually touch on with our politicians before. That needs to change, do you feel?

BRYCE Well, I think we could be surprised tomorrow by the report that it might suggest a shake-up in how the parties invent their lists. In the case of there might be some provision parties, you know, mandatorily making them have elections – internal elections – to decide the lists.

GREG The utopian hope for this is that more people are going to join political parties so they can have a say. Is that realistic, Matthew?

MATTHEW No, not really. I mean, the law requires it to be a democratic process.

BRYCE Which is vague.

MATTHEW In the National Party, there is a very highly democratic process that they begin with their regional conferences and then their national conferences and then the list gets ordered through this highly democratic process. And then in the final meeting of the list-ranking committee, the leader says what he wants.

BRYCE Exactly.

GREG Would this change the unions and the Labour Party – the involvement, the relationship there? Will that change that?

HELEN Well, of course the Labour Party is looking at how it selects its list. I think if you want to get more people voting, you have to actually change the way – the access of people to the voting system. And that includes things like mobile voting electorates, perhaps compulsory voting, which no one’s actually discussed, but, you know, a whole range of opportunities to get more people participating. You know, why can’t we have buses driving around shopping malls and workplaces and things on Election Day with polling booths in them, rather than expecting people to go to them, going through small towns, having a longer time to vote, you know, than the one day? There could be a whole lot of ways to get people to participate.

GREG Okay, we don’t know the exact what we’re going to see tomorrow, but just briefly, Matthew, what do you think will— the Government will go for, will give a green light to on this one tomorrow?

MATTHEW I think they will decide to accept the recommendations of the report. As I said, that will serve their political interests too.

BRYCE We’ll see self-serving all around, I think, from the political parties’ response to this.

HELEN I think they’ll accept the recommendations, yeah.

GREG Right across the board?

HELEN I would say so, yeah, unless there’s something very very unexpected in there that any party that does it will look self-serving, and probably if they’re self-serving recommendations anyway, why not?

MATTHEW It’s actually been quite a good review process. There’s been people— I did a one-minute submission. It’s a good way—

GREG We will leave it there. We’re running— We’ve run out of time, actually. All three of you, thank you very much.

MIKE Yes, I think we do. I mean, I live in Auckland, and I think probably— I’m not certain, but we are the only Pakeha family in the street. We’re surrounded by Chinese, Koreans, and I have to say it’s absolutely the quietest neighbourhood I’ve ever lived in, so there are huge benefits. But I think this actually links up with a topic you’re going to go on to – transport. There’s huge growth happening in Auckland. We’re not building houses fast enough. There’s severe overcrowding. Two elections ago, I went door-knocking in Manurewa, and every second garage was actually occupied, so there’s got to be some policies on that.

SHANE Are we doing enough with all these issues in Auckland here, Raymond?

RAYMOND I don’t think we are, actually. I talked about the lack of political voice for young New Zealanders, even more so for immigrants. And the problem is that Auckland is going to have not only 40% of the total population of New Zealand, but it’s a population which will have a lot of young people and a lot of new migrants. And take housing, for instance, now, some viewers will remember when large swathes of Auckland were developed way back in the ‘50s and ‘60s – Mount Roskill, Hillsborough, Pakuranga, the North Shore and so on. I mean, we have an undersupply of housing right now. This is going to become a critical issue for all these new immigrants and these young people who want to have their first starter home. Employment is another one. So there are lots of big issues that the political elite should be addressing not in 10 years’ time, but begin addressing now.


MIKE There’s a good point around that. Auckland is politically decisive. It was Auckland that gave Helen Clark her third term in government. The provinces are much more stable than Auckland, and Gerry Brownlee continually knocking back even talking about the city rail loop is likely—

SHANE And we’ll go back to Auckland after, I think, we’ve heard from the Mayor. But, Fran, going back to, you know, I think they said 2020, one in five being over the age of 65. Doesn’t that take us back to what we were talking about—

FRAN Well, it comes down—

SHANE before with super?

FRAN Yeah, it comes down to basic arithmetic, and what you have is great wodge of people on the top and not enough taxpayers underneath to pay for it. And I don’t buy for any moment— I mean, the Prime Minister I thought relatively glibly said that essentially the cost of super now would almost double as a portion of GDP over a particular period. Well, that’s actually quite big and when you look at it in big, round numbers. But the other thing about this issue which we’re talking about here about population growth and diversity, I’m in the middle of doing The Herald’s annual Mood of the Boardroom CEO survey, and already there is this huge concern about young people – young skilled people that we have paid to educate in New Zealand and they have been a cost to the taxpayer getting them through university, all of that, and they go somewhere else. And they’re lacking— and they do not see the skilled immigrants coming in necessarily, you know, replacing those people. It’s a much harder mix to work in, and actually managing a diverse multicultural workplace is quite difficult and people are not necessarily up to that yet. And so I think that brings back to the generational issue. We need to look at how we can retain our young here. I think it’s quite scandalous that, okay, we’re growing and the proportion’s going to change, but we’re still losing all these young people offshore.

SHANE It doesn’t make sense, though. As you say, all our people are moving offshore and we’re getting—

FRAN And we move from what was the bicultural paradigm where I think Maoridom in particular felt that they were making headway with Pakeha in that kind of universe, and then suddenly we’re a multicultural country.

SHANE And interestingly, they don’t like immigration.

MIKE Well—

FRAN It’s very—

MIKE that’s perfectly understandable.

FRAN But we’ve got to get the growth from somewhere, and it’s a positive, actually, that in a world where there is going to be a shortage of young people and there are a lot of ageing populations, at least if we’re getting people in, that’s a plus for us.

RAYMOND And ask the Irish about problems with migration. And the other problem we’ve got, of course, is the Christchurch problem, and it is the rebuilding of an entire city almost. And that will take a lot of employment, it will take a lot of our resources, it will take a lot of planning over the next few years. Meanwhile, this monstrosity called Auckland keeps getting bigger and bigger.

SHANE And we’re moving on to Auckland.

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