Red Alert

Archive for the ‘infrastructure’ Category

Hey Steven Joyce – wanna see a real Road of National Significance?

Posted by on November 14th, 2012

This is the road to the Parliament in Nay Pyi Taw (Naypyidaw), the purpose-built new capital of Burma. It is 20 lanes wide – 10 each way and you could land a 747 on it – perhaps its original purpose? Except that it is a little undulating. And it clearly fixes congestion – there is no traffic! Or is that due to the fact that you need permission to visit Nya Pyi Taw? Whatever the situation, this is clearly a road of national significance. I think Steven Joyce lacks ambition for NZ……

National Promotes Divide and Rule – One Size Fits All for Christchurch

Posted by on September 28th, 2012

The National Government appears to have adopted the age old tactic of divide and rule in Christchurch. Proposing sweeping education reforms of schools closures and merge options totally contradict the message that the Government will ‘consult with’ and ‘listen to’ the community. Yeah Right!

Unless you live in Christchurch it is very hard to comprehend the daily stress families cope with to carry on in a ‘new normal’ scenario. Many continue to wait for insurance claims to be confirmed, rebuild projects to commence, and for some greater certainty about job security. This is just a surface snapshot as there is so much more happening in peoples lives.

Instead of listening and working with the community constructively, the Minister of Education bowls her way though with an inefficient consultation process, questionable data and shallow analysis of submissions to justify broad sweeping changes. This is a trend that should worry any community.

There is no coherence to the network provision of education from early childhood options, through to schooling and tertiary pathways. This is a problem. The rebuild in Christchurch will be done over a number of years, if done well, the city will be an attractive place for business, to live, raise a famility and pursue tertiary education offerings. It doesn’t seem like the Minister has her eye on the future. Her short-sighted cost saving approach will lead to an educaiton network that is ill-equipped for 21st century learning or the prospect of coping with an influx of people prepared to rebuild and possibly live in the city.

What is particularly disturbing is the Economic Recovery Plan for Christchurch has not been revealed. It doesn’t make any sense to address the education issues without having a clear picture of the economic growth potential of Christchurch.

More cause for concern all the way around! The good people of Christchurch deserve more than political window dressing and opportunistic point scoring. Childrens futures hang in the balance. They need a well thought through system of education network provision.

Things can be done differently. The community want to be engaged in 21st solutions for the city rebuild. Parents want greater assurance that their aspiration to have a world class education for their child is not thwarted by the Government using the earthquake as an excuse to save money. Children in Christchurch deserve more – how different will the final proposal for Christchurch schools really be? Your thoughts?

Kiwirail blocks new work for Hillside and Hutt workshops

Posted by on August 24th, 2012

Click on the image to enlarge. Here is the link

Rail expert speaks out

Posted by on August 18th, 2012

Today the Otago Daily Times’ Allison Rudd has an important story where a former Kiwirail senior engineer has spoken out about the mistakes and failures of the decisions to purchase the cheapest locomotives and rolling stock and the impact it will have on New Zealand rail for decades.

It’s time more people spoke out. And it’s time that the board of Kiwirail and the Ministers that have directed their deeply flawed policies becomes accountable to New Zealanders.

KiwiRail bought 1970s technology when it bought new locomotives from China, but now has an opportunity to put matters right, one of its former long-serving senior engineers says.

It was “baffling” KiwiRail had ordered the type of locomotives it did, Randall Prestidge, who worked for KiwiRail for more than 34 years and headed the fleet performance team until he took voluntary redundancy last year, said yesterday.

“These locomotives [are] very similar to DX locomotive technology of the 1970s,” Mr Prestidge said.

… he said KiwiRail should make sure it did not buy the same technology again.

“They are thinking old and small and not thinking into the new century.”

He said he had tried to discuss his views with KiwiRail but “no-one wanted to listen” and he had decided to go public.

“I didn’t want to be disloyal to KiwiRail. I didn’t want to bag them in public. I wanted to help.

“I’m saying they . . . must change their ways. But I know in my heart they are not going to.”


Posted by on June 7th, 2012

Sticking up for your city

Posted by on April 22nd, 2012

It’s one of the main jobs of any member of parliament to stick up for your patch. You are elected by a constituency and they want and expect you to defend them and promote their rights. I don’t think constituents expect to get a better deal than anyone else in the grand scheme of things, but they don’t want to be treated with contempt and disrespect.

I don’t think it’s any surprise to anyone that I’ve come out fighting over the extraordinary, but probably predictable decision by Kiwirail to put the Hillside workshops up for sale. In Saturday’s Otago Daily Times I was quite forthright in expressing my views. I used some rather unladylike language and had to ring my mum the day before to warn her.

I stand by what I said. I think the government (and Kiwirail) have pissed on Dunedin. I think many Dunedin-ites agree. Saturday’s ODT editorial seems to agree too though in more polite terms.

I think that the only way we’re going to sort things is for Dunedin people to take control ourselves. And to have a future Labour government backing rail.

I’ll do my best to help find a buyer for Hillside. I’ll continue to take the fight to parliament and I’ll remain a thorn in the side of this government and the local National List MP Michael Woodhouse who has seriously let down the people of Dunedin in the pursuit of his own career. I’ll advocate for the need for and the importance of this industry to remain in public hands, and indeed to just bloody remain in our country.

When I took this job on I understood that there are times when sticking up for your city is more important than towing toeing a party line that you don’t agree with and which is going to hurt your city. It’s a judgement to be rarely exercised. Sometimes the greater good is more important than a local issue. But every MP should have the right and the responsibility to stand up for their city. This was one of those times. Woodhouse didn’t even think about it.

He blocked a select committee hearing on the petition signed last year by nearly 14,000 people (mostly from Dunedin) calling on the government to save the Hillside and Woburn (Hutt) workshops. He has never been held accountable for refusing to allow the people of Dunedin, the Hillside workers and their union to have a say before a parliamentary committee. He should be.

His government is negligent, disingenuous and downright liars about their responsibilities for Kiwirail and its decision and their knowledge of those decisions. As my colleague David Parker has said; if the KiwiRail board had made the same announcement without telling a Labour government, the board would have been sacked. It is just nonsense and untrue for shareholding Ministers to say they didn’t know Kiwirail’s direction and decisions. And it is very clear that they don’t oppose Kiwirail’s decision to sell Hillside.

There’s more at stake than the nearly 130 jobs, the loss of wages, taxes, skills and the more than 137 year history of a competent and valued rail manufacturing plant to the city of Dunedin. There are more than 70 engineering businesses clustered around Hillside. It’s the backbone of our city. It’s becoming more high tech. It’s a hugely important part of our local and regional economy.

This government doesn’t give a stuff. They allowed (and encouraged) it to be run down and now it’s being sold because Kiwirail says it’s not viable. Kiwirail deliberately made it unviable.

I ask you this. How is that that contracts have been handed to the Chinese to build rail wagons that are dubious in quality, when those same wagons could have been built here? They may have cost a bit more, but the workmanship would have been assured, the maintenance would have been less and have been more easily accomplished, and the people who built the wagons would have been earning decent wages and paying taxes in the New Zealand economy.

Kiwirail, and the government, has blocked any independent scrutiny of the dodgy process in awarding those contracts to China North Rail and the quality issues associated with the Chinese wagons. It’s time for some sunlight on both.

It is not false economy to manufacture in your own country. It’s our productive economy. I’d stand up for manufacturing jobs any day against paying for more pokie machines that create immeasurable social harm and are part of a mates deal to an organisation that will profit, might create a few more service economy jobs, but is unlikely add much more real value to our economy.

And I reckon that’s worth sticking up for.

A nation of makers #4

Posted by on September 24th, 2011

Yesterday, US President Barack Obama spoke from the Brent Spence bridge over the Ohio River about the vital connection between jobs and infrastructure repair.

The Brent Spence bridge has been rated functionally obsolete and unsafe, it carries nearly twice the traffic it was designed to handle, and earlier this year, chunks of concrete fell from its upper level.2 And it isn’t the only essential piece of infrastructure that’s falling apart.

It’s shameful that our bridges are literally crumbling while construction workers are unable to find employment. America’s infrastructure needs work, and Americans need jobs.

The solution is obvious: Put people back to work repairing our bridges, dams, highways, schools, and the rest of our failing infrastructure.

We’re putting pressure on Congress to pass a jobs plan that does just that. But we need to make the problem visible. That’s why the American Dream movement is setting out to find and photograph the jobs that need doing—and we need your help.

I received this email early this morning from MoveOn, a political network which is driving progressive change in the US.

Tell Congress: America has jobs that need doing

We don’t have anything like that here. But we do have skills shortages, we have infrastructure that needs repairing, rethinking and renewing, while the national Government spends billions on new highways.

We have a government that is actively dumping existing skills sets (rail) . A govt that is not investing enough in apprenticeships. That doesn’t have a plan to create jobs.

Labour would not dump our rail engineering skills. We’d foster them. We will invest in apprentices trainig for our young people. We do have a plan to grow jobs in strategic industries.

Let’s do what Moveon is doing in the US and show the government what needs doing.

Can you take a picture of a job that needs doing in your community? It could be a bridge, dam, road, school,  or any other piece of our infrastructure that needs repair, rethinking. Email it to me

A nation of makers #3

Posted by on September 24th, 2011

DFT 7295 (that’s the loco) hauls two of KiwiRail’s new AK class passenger cars and a rebuilt viewing car on their delivery run from Dunedin to Christchurch this week . The AK class passenger cars were built by KiwiRail’s own Hillside Engineering plant in Dunedin. These two cars will be used for staff training, before being used on long distance services. These are the first two of 17.

This is what Kiwis can do. Build stuff. Quality stuff. We should be proud of this.

Instead the National Govt is sending work overseas that could be done here. As a result Kiwis are losing their jobs, settling for lesser jobs or heading to Australia.

Why can’t we do it here?  Even if it costs a bit more  (by Chinese standards) the standards are demonstrably higher, we keep the skills inside NZ, we pay wages, they pay tax. It’s better for the country.

Labour would get the work done here. The Hillside and Woburn rail workshops have huge potential. Not just for rail.

I know Kiwirail has been approached by other Kiwi companies keen to get other manufacturing and fabricating work done here. I also understand that Kiwirail’s head office isn’t too keen on actively purusing these ideas.

Why is that? Have they been told to run the workshops down. Surplus to requirements? If so this is a national scandal.

Three years ago the nation was full of hope about Kiwirail’s potential. Today the name has been tarnished and associated with a political push to grind down a proud and productive manufacturing industry and skill base.

Hat tip (for the video clip): Julian Blanchard, Labour’s candidate for Rangitata

Smart Transport- Day Two

Posted by on August 20th, 2011

Posting from day two of the Labour/ Green co-hosted Smart Transport event in Wellington. Focus today is on groups working regionally or nationally on specific campaign issues.

Couple of stand out issues. Almost everyone has noted the difficulty they have had engaging with Steven Joyce on issues. Anyone who has observed his response to any suggestion of alternatives to roading projects will not be surprised by that. But secondly, so much of what is being discussed here is about providing people with genuine choice when the government is instead focused on entrenching the use of cars, and ignoring that it is becoming less and less affordable (not to mention the environmental, urban design, and quality of life issues.) Case in point- the CBD rail link!

And a final word to one group in particular- Rob George from the campaign for better transport in Hamilton is who driving a huge campaign for Waikato trains. Hard slog, but you wouldn’t find a more passionate campaigner. Now he just needs some political will behind him…..

Govt bypasses huge West Auckland town centre

Posted by on August 9th, 2011

We haven’t learned how to do big urban development projects very well in New Zealand. We lack property developers committed to good urban design. We lack the capital markets to fund big projects. Neither central government nor most councils have learned how to unleash the creative potential of the private sector when it comes to big urban developments.

Solving these problems has become more urgent now we have a unified Auckland that aspires to building a world class city. Which is why the circumstances around the new Westgate development in Auckland’s north-west are particularly unfortunate. Two government agencies, Transport Agency NZ and Transpower, have been obstructing a new town centre development tipped to generate 10,000 jobs and increase the country’s GDP by $2 bn a year by 2051.

The development borders on the Te Atatu electorate where I am based. Those jobs and the impressive planned new town centre, will be a huge benefit not only to the people of Massey but all of the West.

I am amazed how NZTA has refused to build motorway ramps to service the northern end of the new town centre even though the Council has offered to pay for them. NZTA is stuck in the mindset that the new Hobsonville motorway and extension to Kumeu opened with fanfare on the weekend is fundamentally a bypass to allow people from the north to get to the airport more quickly, and bugger the idea that it should support the huge new commercial hub being built at Westgate.

Transpower has also been a nightmare for the development to deal with. The high voltage power cable obviously has to be underground but they have sheeted home the full cost to the development, causing numerous delays while refusing to sign a contract that gives certainty. Meanwhile the cost has gone from $5 m to around $20 m.

The developer NZRPG are the only NZ-owned  firm who do these big retail developments. They have spent more than five years putting together the plans in conjunction with the Council, not just plonking a new mall out there but designing a town centre based on good urban design principles. They have put $228 m of their own money into it. The least the Government could do is act supportive.

That is why I have written to John Key asking him to intervene and tell NZTA and Transpower to pull their heads in. After all, it is in his electorate.

In Question Time today Steven Joyce said NZTA was in talks with the developer and progress was being made on the question of the ramps. About bloody time after five years of obstruction.

John Key and Steven Joyce: Are you blind or something?

Posted by on July 20th, 2011

Two new developments in countries which are committed to investing in their own local rail industries. Read these extracts carefully, because it shows governments that understand the importance of the local industry. Why doesn’t ours?

In Australia last week:

The rail industry is gearing up for a richer, fairer and greener future, driven by strategies that will be informed by a recent report into the industry’s current state of play.

Launching the report Railway Manufacturing Industry – A Profile of the Rail Manufacturing Industry in Australia, Innovation Minister Senator Kim Carr said understanding the size, scale and structure of the rail industry was essential if the Government was to develop successful strategies to secure the industry’s future.

“The report, prepared by ACIL Tasman, shows that in 2008-09, the rail manufacturing industry comprised more than 330 firms, employed more than 15,000 Australians, generated $4.2 billion annual revenue and added $1.6 billion to the Australian economy annually,” Senator Carr said.

“This demonstrates just how substantial the national contribution of the Australian railway manufacturing industry is in terms of investment, jobs, skills and innovation. It is a diverse sector, with a wide-range of skill sets across Australia, particularly in regional areas.

In South Africa in April:

Addressing a well-attended meeting in Gauteng on 5 April, transport minister Sibusiso Ndebele announced an impressive programme to procure new rolling stock for the Passenger Rail Agency of South Africa (Prasa). To be rolled out over 18 years, the declared aim is to reposition rail as the “backbone” of public transport.

A feasibility study is in hand; the results are to be submitted for cabinet approval as soon as it is complete.

Prasa CEO Tshepo Lucky Montana emphasised that the R25 billion provided by the state in recent years merely “stabilised” the business – in decline due to years of under-investment and neglect. But Ndebele stressed that the government does not have the sort of money needed – in excess of R90 billion: “Therefore, a significant and sustained commitment from local and international financiers will be required to complete the rolling stock renewal programme.”

The proposed upgrade cannot be postponed, Montana warned. Without it, the railway could “collapse” in less than 10 years.

According to the minister, the government is committed to striking a “delicate balance” between the trains it needs and
the commercial interests of financiers and rolling stock manufacturers. The procurement process is seen as hinging on the injection of private finance ahead of March 2012, when work is to begin on selecting a preferred bidder – to be announced by August and confirmed in September. This is in the hands of an interdepartmental task team drawn from the Departments of Transport, Trade and Industry and Public Enterprises, as well as the National Treasury,

The meeting on 5 April was set up to gauge the interest of local and foreign manufacturers and financiers in the proposed rolling stock acquisition plans.

According to Prasa’s Piet Sobola, it is hoped to have the first of 6,600 new coaches to be in use during 2015, followed by deliveries continuing until 2030. Of these, 4,600 will comprise commuter rolling stock for Metrorail. The remaining 2,000 will be for Shosholoza Meyl’s intercity fleet.

A 65% minimum level of local content is to be a precondition. The market engagement process will seek to gauge the technology and financing options available “within South African ownership and infrastructure constraints”.

The NZ Rail Maritime Transport Union’s Wayne Butson said that the successful tender for Auckland’s Electric Multiple Units is due to be announced within weeks, and the RMTU would be watching very closely to see whether KiwiRail honoured the local involvement pledge it made during the tender process.

I have an inkling there will be a few crumbs tossed towards local NZ  procurement to shut us all up.

I doubt it’ll be targeted at Dunedin’s rail workshops though. And I doubt it will show a serious commitment to the local rail industry

Hat tip: RMTU

Not news

Posted by on July 5th, 2011

The National Party did a bit of prep work on their great infrastructure announcement yesterday. The morning papers had the preview story, so the press secretaries must have been doing their jobs well in the weekend. The big announcement came last night, and well, it was not really an announcement at all as summed up by the NBR story

Bill English has admitted the government infrastructure plan released today does not contain detail on any infrastructure project that had not already been announced over the past 2-3 years.

That’s right this is actually a non-news story. The article goes on to say how there was little in the way of specifics or detail in the announcement. I am getting more and more feedback from all parts of the political spectrum of real concern that the National Party has no plan to lift the NZ economy out of its current state. This non-news announcement just adds to that.

the leader of the national party sends even more kiwi jobs to China

Posted by on June 24th, 2011

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
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.

Why Key needs to get offshore advice on broadband

Posted by on April 21st, 2011

I’ve known Bruce Parkes for years. Straightshooter. Like him. Always knew where he came from. Believed Telecom should use it’s superior market position to slow competitors entry.

But with the High Court judgement quoted below showing how he illegally tilted the playing field in Telecom’s favour he can not be the principal policy advisor on a plan which abolishes regulatory oversight of Telecom’s broadband. It gives them a blank cheque to overcharge much of the country for a decade.

Even before the court decision the sector was revolting. This revelation means that there needs to be a quick expert inquiry into both the decision to favour Telecom and the process that resulted in a very unusual decision.

Because of the vested interests involved the expert(s) will have to come from offshore.

The judgement said interalia:-

The senior Telecom executive named by High Court judge Rodney Hansen in his judgment penalising the telco for historic breaches to Commerce Act, is now a senior civil servant with oversight of the government’s broadband investments.

Bruce Parkes is currently Deputy Secretary at the Ministry of Economic Development for the Energy and Communications Branch. Among his responsibilities, according to his profile on the MED website, are ICT policy and the Ultra Fast Broadband plan. “In conjunction with Crown Fibre Holdings, this group will continue to implement work on the ultra-fast broadband policy, with the immediate aim of settling initial negotiations with potential providers,” reads the profile.

The truckies are stirring

Posted by on April 15th, 2011

Three years ago, leading into the 2008 election campaign, truckies staged a national strike, blocking the roads in protest at the then Minister of Transport’s announcement of an increase in road user charges.

It was Road Transport Forum (RTF) driven and many trucking operators put their employee drivers on the road that day to boost the numbers, which is a bit like a union paying union members to strike. It was timed well, and had an effect.  Transport Minister Annette King set up a road user charges review group which reported back in 2009.

Now parliament is considering a Road User Charges Bill that has got the truckies up in arms again because it proposes to change the definition of licence weight from nominated gross weight to a definition based on the maximum permissible on-road weight. 

The truckies are saying that this could mean increases in RUC charges for around 70% of the industry, forcing unproductive changes that could have impacts on safety, on damage to our roads, and financial consequences for SMEs. Basically, the big trucks will get off lightly, while the smaller trucks will pay more. 

In a fascinating turn of events, truckies have told the government that they are organising to protest again and this time around they will be better organised than in 2008. One operator has set up a website which is worth a look.

There’s a split in the industry. Many are supportive of the New Zealand’s unique road user charging system, which is now attracting international interest as virtually every modern economy develops and trials technology to implement similar direct charging for heavy vehicles. 

There’s some really smart modern operators in New Zealand now taking up the opportunity new technology offers to buy road user charges on-line and maximise efficiency. 

Then you have the RTF, who continue to insist that road user charges should be paid through fuel excise and who appear to treat modern technology with suspicion. 

Never thought I would be so interested in trucks.

It’s a dog

Posted by on March 23rd, 2011

Why should we have to wait until 2019 to get ultrafast broadband on fibre?

While in the meantime, we get to pay more for our copper-based services, which won’t improve during that time?

The Bill that Steven Joyce is rushing through parliament will see a price hike of at least five dollars a month on the average phone and broadband bill for many consumers. The effect of his new law is to re-average prices for the current copper based broadband services which means the price of broadband delivered over copper will increase in urban areas by more than 20 percent.

And, it will stifle competition in the copper market, while the vast majority of Kiwis will not be able to access fibre for up to a decade.

As if Kiwis didn’t have enough to worry about with hikes in food, electricity and petrol prices, they now face artificially increased prices for their broadband and phone while the Government presses through with its ill-advised telco laws and hands enormous powers to the Communications Minister as well as to New Zealand’s biggest telco, Telecom.

And, if I read Juha Saarinen right in the NZ Herald today, when we do get fibre, it may very well be much less than what the government said we’d get. Juha somehow got hold of Crown Fibre Holding’s wholesale pricings for fibre.

He said:

Despite the government’s promise that New Zealanders will receive at least 100Mpbs downloads and 50Mbps uploads on the fibre-optic network that will cost tax payers $1.5 billion, the price book shows that the entry-level service runs at more modest 30Mbps downstream and 10Mbps upstream.

Today’s broadband over the country’s ageing copper phone network provides up to 15Mbps downloads and 800kbps uploads.

So Steven Joyce says we’ll all get ultrafast broadband in our homes. By the end of 2019. He says we’ll get 100Mpbs. But it looks as though we’ll get 30Mbps. He says he doesn’t care what the industry thinks, he only cares about consumers.

And yet those consumers will have to pay more for their existing copper based broadband. Possibly until the end of 2019.

Even David Farrar on Kiwiblog thinks it’s questionable. He doesn’t say it’s a dog. But I reckon he thinks it.

How can we progress as a country if we can’t get broadband right? The only organisation supporting the Government’s new laws are Telecom. I wonder why that is?

They’d be wise to have a bit of a rethink on their position.

At some point Steven Joyce might realise he’s the only one in the room.

The Great Broadband Sell-off

Posted by on March 18th, 2011

Yesterday’s FEC hearings on the Telco Amendment Bill were remarkable.

By the end of the day it was starkly obvious that the Bill hands a gold-plated license-to-kill to Telecom under the guise of ‘structural separation’.  No-one, not even Govt members, could deny that.

Don’t take my word for it: check out the Commerce Commission submission, or (bipartisan) Internet New Zealand’s, or Vector’s, or TelstraClear’s – all here.

The Bill seeks to lock in a “regulatory holiday” by preventing the Commerce Commission from exercising its current oversight for 10 YEARS.  NO other country in the world has done that, and it would be illegal in Europe. It may be in breach of NZ’s WTO obligations here.

Despite that Telecom had the gall to ask for longer! And to weaken the purpose clause of the Telco Act to boot! Have they lost their PR mind? Do they want to channel the ghost of abuses past?

Fair trading “equivalence of inputs” rules between the network owner (Telecom) and wholesale competitors would be watered down so much as to be unenforceable.  Arms-length trading rules currently in Telecom’s Operational Separation Undertakings become “optional”.

And so on.  It’s so patently obvious it is not even worth repeating all the examples.

No wonder Steven Joyce wanted the hearings over in indecent haste.

The result of this great leap backwards to the 1990’s will be much higher prices and less choice for consumers for a decade.  YOU will pay for this sleazy deal.

So WHY has the National Government done this?

Roger Douglas summed it up – it is a “legislative subsidy”: National is ‘selling the law”.

In plain speaking, National in the last election over-promised ultra-fast broadband to 75% of Kiwis for $1.5 billion.  But rather than being a clean subsidy there were massive strings attached, requiring a commercial return through the hopelessly conflicted Crown Fibre Holdings.    The numbers just did not add up.

Hence no rollout for 2½ years, and Steven Joyce is worried about his reputation.

But instead of fronting the problem honestly and getting the whole industry to be part of the solution while building a vibrant competitive market, National has done a side-deal with the incumbent telco that leaves everyone else worse off and the market beggared beyond belief.

That will set back innovation, chill investment and deliver less broadband at higher prices than necessary for a decade to come.

As if Kiwis aren’t facing enough price rises without paying too much for their broadband as well.

Telco Hearings Set for Stoush

Posted by on March 15th, 2011

Clare Curran did a great post on Steven Joyce’s abuse of the parliamentary process with the Telecommuniations Amendment Bill. 

The FEC is meeting Wednesday and potentially Thursday this week to try to ram through all the submissions in one week!  

Paul Brislen, CEO of the Telecommunications Users Assocaiation, was rigthly outraged.

Clare and I put out this release today.  We believe this Bill will take the telecommunications industry back to the bad old days of the 1990s, when market dominance was the norm and the consumer got screwed.

The government’s proposed 10-year regulatory holiday is a complete crock.  The Commerce Commission would be prevented from doing its job of ensuring fair access for competitors, while ensuring investment works in the long term interests of end users. 

Those gains were hard won in the last decade.  The industry does not need a leap backwards.

The design of the proposed structural separation of Telecom is uncertain and implies real risks.

The weak, vague and ill-defined form of “equivalence” in the Bill provides little reassurance to retail competitors and consumers.

Crown Fibre holdings is deeply conflicted as both market player and front line regulator.

Ironically, this could all chill investment in a market NZ desperately needs as it seeks to become a hig-value, knowledge economy.

That doesn’t mean Telecom should not be allowed to structurally separate.  Done properly, that could be a win-win.

But it does mean the legislative processs should be careful and thorough, as billions of dollars of taxpayers funds and private equity are at stake. 

Why is the government so determined to ram the Bill through and pto try to stifle legitimate parliamentary scrutiny?

Could it be that their $1.5 billion with a commercial rate of return is insufficient to stimulate the broadband rollout the government promised in its slogans – and that the only way to square the circle is for the poor, dumb consumer to pay too much for a decade to come?

Could it be that after dithering for two and a half years, Steven Joyce is just plain desperate to make something – anything happen, even at the cost of serious damage to the industry’s future?

The Debt Deception

Posted by on March 8th, 2011

As this is my first blog post since the quake, can I preface my comments by acknowledging the devastating loss suffered by too many Cantabrians and their families, of ther lives and homes shattered, and our shared determination to everything necessary to support their rebuilding and renewal.

In this immediate post-quake period we are all exercising restraint – both in the quantity and tone of poitical comment.  But the debt question has in fact been brought into starker relief by the quake, so I am moved to observe the following.   

Before the quake, National would have you believe that New Zealand had a huge international debt problem, and that the solution to that was for the Government to compress spending and services to pay down this debt. 

It was always a half truth: 90% of that debt is private debt and only 10% of it is public (government) debt.

The second deception was that this high debt was “Labour’s fault”.   The facts are that in 2008 net debt (including NZ Super Fund assets) were in surplus to the tune of 4.7% of GDP.   Virtually no government in the western world saw the collapse coming in advance, but at the least the former Labour Government had the books in strong shape.

Post quake, we are all confronted by huge costs. Families have lost loved ones.  Homes and businesses destroyed will take time to rebuild and renew.  Infrastructure is hugely dislocated.  Much of the CBD will have to come down.  Hopefully there will be proper consultation and an eye to the heritage that makes Christchurch unique.

The financial costs are also huge – in Treasury’s February Indicators, around  $12 billion (later estimates put it around $15 billion),  of which some $5 will fall to the Crown because it is not covered by EQC, its reinsurers or private insurance.  Around a further $5 billion in lost Crown revenue will occur due to the reduced tax take from decimated business activity and personal earnings in Christchurch.  (I will blog further on the “growth gap” shortly).

So, to use the PM’s very round numbers – there is $10 billion for the public to find over the next four years or so. 

Some of that can legitimately be redirected from other investments – for example the “holiday highway” north of Auckland – to help fund Canterbury roading costs.

Mssrs Key and English believe the rest can be borrowed – that is, placed on the international debt pile – and say that is now acceptable becasue it is a “one off”.   They are so far dismissing suggestions of any additional support for Canterbury through the tax system.  (Raising the EQC Levy only restores its capacity to deal with future disasters, rather than this one).

Why then was the international debt pile so huge that reducing it by slashing Government spending and prolonging the recession was necessary a month ago, but borrowing the lot is no problem now?

Forgive me, but could it be that the answer is not economic but political?  Could it be that reducing government expenditure pre-quake was the price of Budget 2009 and 2010’s – largely upper income – tax cuts; and that even Canterbury’s needs have been trumped by the need to protect National’s traditional voter base from even a temporary reduction in these tax breaks?

I feel unclean even thinking that.  But the question has to be asked: why not expect the whole community to share part of the cost through the revenue system?  Even the NZ Herald agrees with that.

We aren’t a corporation Mr Key, we’re a country

Posted by on February 9th, 2011

People need to know that they can trust their elected representatives to have their best interests at heart, and to have a plan.

A plan that’s not using the tired old strategies from the past, but some new ideas, some innovative solutions that build confidence in our local industries and create jobs for the future.

John Key’s vision, expressed in his speech to parliament yesterday, was dull. It had no substance. There’s no other way to put it. He’s out of touch with real New Zealanders who are struggling to cope with skyrocketing power, petrol and grocery bills.

And he doesn’t have any new ideas. The ideas he’s had are questionable as to whether they can be delivered and whether he’s committed to delivering them. There was no economic growth plan set out in his speech yesterday.

It’s a wasted opportunity.

I’m Labour’s communciations and IT spokesperson. Obviously I believe in and want to advocate for this industry. Not many people know what it actually is.

Consider this (Info from NZICT):

You might be surprised to learn that the ICT industry in this country contributes $20- billion a year to our economy. It’s worth $5 b in exports a year. Second only to the dairy sector. It employs around 40,000 people.

And it invests on average around 9% of revenue in research and development.

The top 100 NZ ICT companies accounted for 10% of goods and services exports in 2009.

It has scalability to lead economic growth.

ICT attracts $2 billion of govt procurement, 7% of all procurement spending.

ICT is on the precipice of vast opportunities with the urban and rural broadband initiaitives.

These are the industries of the future. An ICT manager attracts an average wage of $90,000. But finding skilled workers is the industry’s biggest challenge.

Read the speech I gave yesterday. You may not agree with all of it, but doesn’t it make you ask some questions about the energy, commitment and dare I say “vision” that is lacking right now.

Here’s the video link