Very interesting that the leader of the national party and Steven Joyce have left it to a Chinese website to announce that they have on our behalf purchased another 20 locomotives that should have been built at Hillside and Woburn. No tender. And the first 20 over a year late from the same Chinese source.
Maybe it was because Kiwirail were at the same time firing staff in Dunedin and the Hutt Valley.
Because it is Kiwirail not Chinarail it is time the economic benefits of these purchases (jobs created, skills developed, tax paid, benefits avoided) rather than just the accounting costs are taken into account.
KIWIRAIL Purchase Additional 20 sets of “MADE IN CHINA CNR” Diesel-electric Locomotives
Source?Author?Date?2011-06-17
On June 2, CNR Import & Export Corp. Ltd of CHINA CNR Corp. Ltd. Singed another contract for 20 diesel-electric locomotives with KIWIRAIL New Zealand. The partner PPD company in New Zealand of CNR Import & Export Corp. Ltd has been strongly supporting this contract. This is KIWIRAIL to the CNR purchase after first 20 locomotives in 2009.
Pity the Labour Party wasn’t thinking about that three decades ago nor, as a matter of fact, last decade.
Aren’t you on record in Hansard saying that it is not right for the shareholding minister to intervene in the operational running of a SoE? Or is it different when you guys are in power?
Great idea Trev, why didn’t it occur to me before that New Zealand should specialise in the production of rail carts and China should specialise in the dairy industry? I believe it’s called the theory of reverse comparative advantage.
Yes the minister for transport should intervene illegally so that labour don’t have to dig their own dirt. As a poster above pointed out, reverse competitive advantage makes so much sense.
@Edwin
Are you sure China is specialising? Seems to me that they’re making everything that they can. They make computers (Just look in your PC) and other electronic gear, They’ve recently told Russia that they no longer want to buy fighter jets off them because they’ve reverse engineered the ones that they had already bought and they make their own nuclear subs too. They have a space program that they’ve bootstrapped up from their own research.
In fact, I can’t think of a single thing that China doesn’t produce. They do buy a lot of dairy products from us, true, but they still produce their own.
Contrary to what idiotic economists say, countries shouldn’t be specialising. It’s actually far cheaper and better for them to produce everything that they need themselves.
@Draco T Bastard You know what? You could take that idea even further and have each individual producing all the goods and services they need themselves. It would be far cheaper and better for everyone!
I’m sorry, I forgot that all countries have equal resources and can employ them with equal efficiency. My mistake. I’ve obviously been tricked by those “idiotic economists”.
Hi Mr Mallard you stated when you were acting Minister of Finance in 2006 and Air NZ was sending some engineering services overseas that “The Minister cannot interfere with the operational side of the Business”, what has changed with Kiwi Rail? What has made you “flip flop” on this>????
Edwin, NZ actually makes better quality railway wagons than China. But the issue here is that another big contract, worth some $75m of taxpayer money, has just gone to CNR China without any competitive tendering process. You’ll note in the Chinese press release that PPD in NZ “negotiated” the deal. I’m sure you remember PPD – Sammy Wong worked for them.
Well the Tory trolls are out. This is a major transaction and should in any case be subject to a much better procurement policy.
And in case anyone hasn’t noticed unemployment has doubled in NZ and skilled workers are leaving the country.
So we can continue NACT pureness or use government procurement as an economic tool.
And arnie big difference is that we never owned 100% of Air NZ
Does anyone here know how to swear in Chinese?
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@Edwin – there is some machine that prints out stuff in plastic, it can also make another machine like itself. I can’t remember what it’s called.
@Draco 5.49 – agreed,
@Geoff If NZ rail wagons are such high quality then the industry should be able to continue by itself without needing government intervention to survive. Additionally any problems with the tendering process could be solved by privatising KiwiRail as there would then be a strong incentive for the firm to buy the best quality inputs. By bringing in the Sammy Wong argument you illustrate a point quite nicely. It is far better that these organisations are free from any such political interference (even though I highly doubt that was why the contract was awarded).
@Trevor The fact that Air NZ is not 100% government owned hasn’t stopped Labour from calling for increased interference. In fact Maryan Street suggested the government “could even divert or appropriate an Air New Zealand plane out of London” to get New Zealanders out of Egypt.
The global economy isn’t simply a zero-sum game where the best strategy is to screw over other nations to improve your own position. When free-trade is allowed to exist and trade is based upon efficiency rather than any arbitrary protectionist favouritism, then every nation is better off.
@Spud I’m failing to see the relevance of 3D printers, even if they are incredibly cool. They’re interesting but certainly aren’t suited towards production on a macro-level. Additionally I would have thought you would detest the very idea: capital replacing labour to increase efficiency.
@Draco Yes, China is specialising. It is clear that it focuses strongly on the production of certain categories of goods and services. In their case that is cheaper manufactured products. China is, as a large country able to specialise in a large number of goods but that is wholly consistent with the theory of comparative advantage. In such a varied country, different parts will naturally have different resources available. Specialisation does and should naturally occur at every level of the economy from the individual to the firm to regions and so on.
Bit of difference between your cases Edwin. Take the rest of the night to think things through.
Well let’s just stick with rail shall we. A contract for $210 million awarded during the last term of Trevor’s government, to a Korean company to be built overseas. These units were bought by Greater Wellington Regional Council, so being under public ownership then the same sort of imperatives would be foremost. In fact a government subsidy was given to GW Transport with virtually no strings attached, and apparently nothing that would have required preference for New Zealand manufacture.
” that another big contract, worth some $75m of taxpayer money, has just gone to CNR China without any competitive tendering process”
Are you sure there weren’t options with the original contract, which might have specified a better price for subsequent tranches.
No it couldn’t because no one person can learn everything. At an individual level specialisation works but not at a societal level. This is the mistake that macro-economics has made – they simply took micro-economics (specialisation) and write it large (ie, economists are idiots).
Generally speaking, all countries can. It’s got nothing to do with size but knowing what resources the country has and using them within the limits set by the environment and what can be recycled. Which means a population cap BTW.
They have the necessary resources to maintain themselves if they live within the natural limits of that country. BTW, China doesn’t have enough resources to make what it produces. It has to import most of them. It’s only real resource is its people and it can’t maintain them either.
Bollocks, not everyone wants to be a farmer and so, if you specialise in farming, you end up with a lot of people leaving and even more not really connected to society as they just don’t fit. You also miss out on the development of society that the diversity of not specialising brings resulting in the society stagnating rather than being a vibrant centre of change and development.
BTW, I consider most of our present “economy” to be nothing other than make work and not in any way economical at all as it invariably uses up resources we can’t afford to have used up. Most of the consumer/retail service sector, quite simply, should not exist. Neither should the finance sector, We can’t afford that at all – takes far too much out of the economy.
And, at the end of the day, we must live within the natural limits of our country. We aren’t doing that ATM as the pollution of our streams and rivers from over farming shows. We need to cut down on the amount of farms we have until they produce only what we need. This will allow the natural ecosystems to regenerate themselves, but then what would we export to buy the computers we use, or cars etc? Of course, we don’t have to export anything as we can make the computers/cars etc here from our own resources. Again, we only look at making what we need and in such a way so as to stay within the natural limits.
@Spud
3D Printing is actually getting really good now. Can’t remember the exact one but I know the one you mean. It couldn’t print the metal parts or the electronics but that last won’t be too far away as I know that some people have been working on getting them to print electronics. That will be a major breakthrough when it happens. It’ll revolutionise the electronics industry as anyone with a computer would be able to print out whatever they want.
@swampy – maybe there should have been conditions attached but from memory unemployment was about half what it is now, there was a skilled worker shortage and we didn’t own Kiwirail. How about having an original thought rather than parroting National Party research lines three days after Joyce uses them in the house.
@Edwin “You could take that idea even further and have each individual producing all the goods and services they need themselves. It would be far cheaper and better for everyone!”
I meant that this is what the creators of these machines want. It’s a double edged sword for sure!
@Draco – so cool
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“And in case anyone hasn’t noticed unemployment has doubled in NZ and skilled workers are leaving the country.” and not a mention from Labour regarding how we were sold the RWC as a goldmine and now we with medium level on unemployment now this ..
http://www.immigration.govt.nz/migrant/stream/visit/rugby/
You pollys are pathetic seeking only points scoring opportunities and not what is best for this country.
Am I inferring from you Trev that we should move towards a “Command Economy” ?
@Herodotus. Not sure what you are inferring. I’m not implying.
Trev if you want govt input into such decisions as an e.g. the rail stock, Ak Airport, land ownership controls etc. Does that not then naturally evolve to a command economy? If not then those outside govt are unsure as to the rules that may or maynot apply depending who is in power. We revert bake to Muldoon time, when some with contacts to govt had an unnatural advantage e.g. Importation licenses (I know that this was before your time), or the rumour regarding Bastian Pt with who was given the unofficial nod that they would be selling/purchasing the land.
Or is it your understanding that govts would pick and choose e.g. Sensation Yatchs (Mr Erceg) that unfortunately with all the subsidies from the MED still went down in a sreamingheap.
1) Business, and society in general should expect some different rules and different policies with different political parties taking power. That’s sort of the point of having different political parties.
2) Governments doing their job well will spell out the rules very clearly and will not change them often. Is that good enough for you?
Why should it?
There are many different forms of capitalism, the neoliberal free market kind where corporations rule and government is expected to take a passive permanent back seat and not make life inconvenient for the big wheeler dealers is not really that great a one.