Today nearly two hundred plucky workers from Hillside Engineering in Dunedin joined by dozens of cold, wet but staunch fellow Dunedin-ites stood in the Octagon in a freezing southerly to tell the National Government that we need a strong rail industry.
Kiwi jobs for kiwi workers was the message, along with Can we build trains in Dunedin? Yes we can is the answer. At a competitive price. And in NZ Inc’s interests.
The case has been made. We have the skills and the capability. If we can’t compete on labour costs with the likes of China, we certainly can on quality and whole of life costs. And ability to deliver on time. The case for kiwi content stacks up.
Across New Zealand, people think it’s important that we build here, rather than go overseas. It’s a no brainer. Especially right now. We need to build confidence in our homegrown industry. We need to retain a manufacturing base. It’s at the heart of Dunedin’s economy, let alone important for the rest of NZ.
Why should the profit go elsewhere? At the very least, the bulk of the actual work should be done here even if we don’t hold the contract.
The EOI contains a limp clause about NZ content. It’s not good enough. There are two particular people standing in the way of NZ’s rail engineering industry having a future. Transport Minister Steven Joyce and Kiwirail CEO Jim Quinn. Neither of them believe in rail’s future. Both are trying to talk it down and to cast those who do support it as emotional rail enthusiasts.
Interesting, given the huge resurgence that rail is having elsewhere in the world. Quinn has a job to do. Joyce has a political imperative. The thing about Joyce is that he’s too cold, too clinical and economic rationalists don’t always resonate.
And he’s made a mistake. He slagged off at Kiwi skills. And he hasn’t even bothered to come and have a look at Hillside.
Leaving aside jokes about animal behaviour, if Steven Joyce can’t make it to Dunedin to have a look at Hillside’s ability to manufacture trains, then he’s chicken. It’s obviously not a priority.
Today Labour had five MPs at the rally. Myself, Pete Hodgson and David Parker from Dunedin. Trevor Mallard from Hutt South (where Kiwirail has its Woburn workshops) and Darren Hughes, Labour’s Transport spokesperson. Phil Goff sent his apologies and his support along with a bunch of other Labour MPs.
Labour thinks that Kiwi content should have preference in the tender for the carriages and engines for Auckland’s rail system.
What does the Government think? Is this important or isn’t it?
So Steven, come to Dunedin. Are you chicken or what?
Watch this clip from Local Channel 9 to see footage from today’s rally
I was suprised how cheap they are, Weta Digital has 5, 5..! of the world’s top 500…
The argument supporting importation of goods priced low with cheap China labour is short sighted.
We have a trade imbalance made worse by importing good no matter what the cost in dollars.
The construction of the trains is a fraction of the ongoing life time benefit and return from the trains.
Making them here has so many other bonuses for the train design, ongoing maintenance and parts supply as well as the social and economic benefits of employment and developing infrastructure.
Remember Roger Douglas closed the Post offices around the country with short term narrow thinking, put heaps of individuals on the dole, put many small viable communities into recession all for “ecomomic ” reasons.
Hey Jeremy sorry for the late reply
I wasn’t saying we should import nothing. It’s true that countries can maximise production through comparitive advantages (although that’s kind of outdated since capital can move from one country to the next but still quite relevant IMO) by buying things other countries make cheaper and selling things which we make cheaper and it’s sound’s all nice and wonderful and dandy…
But the reality is we are importing way too much and it’s putting us into debt and putting us out of potential jobs and imports in the form of on-shore services streaming endless profits out of the country which only around a third of which will be reinvested here etc. You are right that a stance against all trade in general is destructive but taking a stance for all trade in general can be just as destructive. Man nearly half of our entire sharemarket is owned by foreigners, you have to find a middle ground and a balance between imports and exports and protectionism, currently we are way off. (And I don’t see any NZ privateers coming up with big new project’s for domestic production any time soon…)
Education/Health Care aren’t necessities of life we just make them out to be, yes that goes unsaid
While the link your making between subsidies and the price of all other goods logically makes sense just remember that the bane of economics is that you just can’t make comparisons like that because there are a ton of other variables involved.
I can just say Oh, if we start building our own cars, the State get’s more money from company tax, that means they can afford tax cut’s in other areas and everyone in the entire economy gets more money. Oh, if we start building our own trains that mean’s profit’s made from the train’s will go into NZ hands which mean’s A. More expenditure in our economy buffing up other buisnesses B. More profit for NZ buisnesses to give NZ workers more wages C. More tax going to the NZ Govt. so opportunity for a tax cut.
And then you say Oh, no we can’t do that, that mean’s Japan will get pissed and we’ll have to make our own T.Vs at a higher price than Japan. (That’s where that chain end’s by the way. We stop importing japanese cars Japan retaliates with televisions how could that endlessly spiral out to all good’s/services in the economy? I doubt we would retaliate to the retaliation there would be no point). Then that becomes a question of numbers rather than logic. Exactly how much money would we gain in these positives and how much would we lose in these negatives. IMO The numbers would come out looking positive on the whole considering how out of balance our imports/exports are already.
Anyway I’ve made this post too long, I hope you reply and keep this convo going I’m enjoying it
@John W, the trains weren’t going to be designed in NZ (as far as I’m aware) and some of the parts were going to be made overseas (engines), Kiwirail will still maintain them and parts were always going to come overseas (I think we might be able to fabricate them in our existing workshops if we get licence to do so)…
Really you didn’t support Douglas closing post offices in towns of 50 people that had 6 people working in the post office or that in ‘89 the Railway Department fired the 4 guys in the Henderson rail yard that changed the signals – even though the signals went electronic in the early 80s..? It was welfare by another name… Change is a good thing and we have to realise as technology speeds up, we need to learn, improve and train for our entire lifetimes and change jobs every couple of years…
@Dylan, so what that we import too much, I don’t personally I save a lot but that is a personal choice just as people borrowing 22c on top of every dollar they earn to buy consumables, if that is people’s choice then so be it, in the long term it will equal out (like what is starting in the USA and UK) because people will start to say, “you know I don’t think these people are going to be able to pay us back – we ain’t lending you any money anymore” and it’ll be painful but people will start saving and paying down debt and the economy will slow but we’ll get through it…
Most of the reason we are so owned by overseas is due to the almost criminal flogging off of SOEs for cents on the dollar in the 80s and 90s but also because Kiwis refuse to invest in NZ in anything but land (except for the wealthy) this means our houses cost 10% – 15% more than they’re worth and large chunks of our industry is owned overseas, exaserbated by the fact we aren’t saving… Again not investing in anything but property is people’s choice…
The government cannot solve the problem of people spending more than they earn (they can in part by making Kiwisaver compulsary – which I strongly support) and they cannot stop people from investing all their money in property (they can reduce it by tax cuts for business investment or by partial floats of SOEs for NZ Prs and citizens – which again I strongly support)…
Private entreprenuers come up with new products all the time here, think the Britton Bike, the Hamilton Jet Boat, Richard Pearse, the Fastest Indian and yes number 8 wire fences, we are very good at inventing products via individual genius but not so good at taking those products and turning them into big industries, we need that to change…
If you study patents you’ll find that most are effectively produced factory style by big companies – NZ is terrible at this too, in particular Telecom, in other countries a company like Telecom with 6,000 employees in an innovative industry doesn’t just supply a telecommunications network, it designs and patents a better communications network… That is part of the reason Telecom is building it’s new “creative, green” headquarters in Auckland to drive this (complete with bean bags I’m sure)…
Also keep in mind that of the millions of patents around the world, 1 in 20 patents a new “widget”, the other 19 out of the 20 is patenting an improved “widget:, again NZ does this but not enough… This “improved widget” provides a very large percentage of the economic growth (about the same as labour growth)…
So yes private enterprise can drive economic growth through domestic production and will e.g.; by us building a secondary forestry industry (i.e. high quality furniture for export instead of exporting logs), when we do have a secondary forestry industry like boat building when can foster a company to build a team dedicated to patenting a better way to build boats via research tax credits and of course we all want the new high tech industries talked about earlier in the thread…
@Jeremy M Harris
The Free Market academia and ideology is largely dead and only lives on in those with blinkered faith.
Or so says Joseph Stieglitz…do you know who he is? forget your under graduate degree in Business Management Economics turns out to completely wrong. Well that is what he won his Nobel Memorial Prize in Economics for, he proved Adam Smiths “invisible hand” to be a lie.
http://www2.gsb.columbia.edu/faculty/jstiglitz/download/2006_Challenge.pdf
@Jeremy
’so what if we import too much’
thanks for ignoring all the points I’ve ever made in my posts man I repeat for the third time or so it loses potential jobs onshore services (a form of imports) streams billions of $ of profits out of the country and it creates a current account balance deficit.
JMH who gives a flying **** about patents.
I don’t care if NZ companies need to license the tech as long as they can get it on good terms.
It is about commercialising tech where we own the means of production and can generate foreign exchange income which stays in NZ to be used for the benefit of our economy and for our citizens.
I think you just pointed out that steps can be taken so that those activities are no longer occurring at problem levels
Get it out of your head that anyone here is trying to recreate the economy of the 1970’s and 1980’s. We are trying to create an advanced, high value economy using lessons and templates which have worked well overseas, that is NOT what Muldoon and Douglas were doing with their own schemes.
You are aware that some of this “equalling out” may take catastrophic forms? Like financial and debt crises, uncontrollable inflation, etc.?
The US Govt owes China US$800 trillion. When is this going to “equal out”? And in the mean time, as the Chinese govt continues to essentially finance American consumers buying and buying and buying, the discrepency introduces huge disortionary effects into their respective economies and political relationships.
Yes but how?!
NZ needs deep sources of capital to provide to these entrepreneurs so that they don’t have to sell their nascent ideas off to foreign ownership. The moment they do that NZ as an economy loses that potentially incredibly lucrative and productive asset. Future earnings from that brilliant kiwi idea go to foreign owners from then on. (Eg. Trademe Fairfax, although in that case Sam Morgan extracted his pound of flesh from the Australians).
And if we keep exporting our currency by spending more on overseas products than we earn (including giving our money to companies with offices here but are actually foreign owned e.g. the Australian banks) we will never retain enough capital onshore to put to productive use for our own people.
Hmmmmm see what i did there. Its all linked
Jeremy
I think you have missed the point on train supply for the NZ market. We have made trains here for a long time, need industry and jobs, have the resources, need to reduce imports – it is a no brainer to use imported rolling stock. Patent arguments do nothing.
More of the same is not going to change out dependence on the importer solution as much importers may see a buck in it for them.
The social impact of Post office closures led to wider economic impact on small towns. I saw the effects of this in many small centres in both Islands. Small centres all had a post office an often a service station and a shop or two. The rural population for many kms around would use this as a service centre. Closing of the Post Office spelt doom and the cards fell leaving empty buildings and farmers traveling long distances for fuel and supplies. School roles dropped and schools closed with children traveling long distances or even boarding out.
Apart from depopulation of rural centres the inefficiency of traveling distance for fuel was never a part of the consideration.
Hundreds of Post Offices were closed and bean counting is not a useful analysis of the outcomes. An narrow ideological sop with devastating social and economic effects.
A visit to Nasbey before and a few years after would give you some idea of what PO closure and after effects can do. A highly disruptive move for the country as a whole.
NZ Rail was trimmed to become an earner then sold. Why would you sell strategic infrastructure that was paying except for ideological reasons to suit the multinational investor market.
The electricity Dept with a well maintained grid was trimmed, maintenance shelved until it showed better economic short term performance then Corporatised. The maintenance backlog is still dogging reliability of the system.
You logic in blaming NZders for not investing when their assets were sold off is noted.
Telecom the big NZ company with NZ investors is now owned by who? Has Telcom been a fair player – well ask around if you have trouble seeing the anticompetitive actions begrudgingly modified under govt threat.
Telecoms “new” approach to its network has a switch box in Auckland and Christchurch and all other exchanges will be closed. There may be revenue in selling off these once publicly owned assets.
The whole county will be serviced by the two centres.
Your phone will be run on power from your house supply saving more money for Telecom.
So if a fault occurs the same management that overviewed the infamous ongoing XT debacle will also have a chance to show their thoroughness and expediency in rectifying the new system.
A harrowing prospect when you consider all calls in the country through Telecom must be routed through Auckland or Christchurch. If one centre faults out then the other takes over. Yeah Right. Green OK
We NZders owned basic infrastructure which was too good for us so our trusted politicians shepherded into multinational hands and our debts climb.
Your comment about the need for change including your job every couple of years seems completely incompatible with building up of expertise. A curious mixture of comments but amount to supporting selling off our silver.
I think we have been there, done that and suffered, lost production by opening markets and you ask for more of the same.
It is a changing world and the model you espouse has not worked for NZ.
It is time for a change.
@Dylan, I get your point but I am saying that if people choice to spend their money on consumables and create the possiblity for debt crises etc, then so be it… We aren’t going to move to a high value economy until a good proportion of our society gets smarter with their money…
@Loota, patents are key to owning the ability to create wealth, so I care a whole lot, a company or country isn’t going to licence a technology to us if we can out compete them…
We move there by R & D credits, low company taxes, a culture of creativity, savings, risk, openness to change, wider section of society investing in businesses…
@Loota
‘ NZ needs deep sources of capital to provide to these entrepreneurs so that they don’t have to sell their nascent ideas off to foreign ownership. ‘
And what is the only body in NZ who has that kind of capital…