Light rail was promoted as a “game changer” – but govt must change gear (and the minister, maybe) to quicken the pace

We wonder if there is any surprise among readers that the  Ardern  government   has  made a hash  of  delivering    another  of its   flagship   policies, Auckland’s light  rail  project.

Ardern  labelled the project  to build  light  rail from  Auckland city to  the airport  a  “game changer”.  And  she  promised  to extend it to  Mt Roskill within four years  of taking office.

This  week   deputy PM  Winston Peters   told  Parliament “exploratory” work has  still to be  completed.

As  Point of Order sees it, those who wonder why the project  is close to  foundering should ask who is in  charge of the  project.  They will find it is  Phil Twyford,  whose  performance  with KiwiBuild  was so disappointing – and became so politically embarrassing – that the PM this year gave ministerial responsibility to someone else.

Twyford retained   Transport, though  Ardern’s  judgement was questionable.

Simply,   the  government’s  excuse  in blaming   failures  on   “nine years  of neglect”  by  the   previous   government is  coming back to haunt ministers  like Twyford.  For if  ministers  in the previous  government  didn’t  do their job,  how  come  the  current  crop  so neglected  the preparation and implementation of a better policy that  they are  failing  even more spectacularly to deliver  what they promised?

Twyford, of course, shuffles off  responsibility for  the  botch-up to the  NZ  Transport  Agency  and the  new  chairman of  the  agency, Sir Brian Roche,  concedes  it  did  “drop  the  ball” —but  where does   this leave  the  principle of  ministerial responsibility?

Opposition  Leader Simon Bridges opened   question time in Parliament  on  Wednesday  by asking the PM when construction  would begin on  light  rail  in Auckland. This  was the  answer he  got  from the  deputy PM  (standing  in for  Ardern)::

Like every person that understands both transport and business, when we have the forward costings organised, all the engineering reports, and all the alternative views are put on the table, then we will make a commercial decision”. 

That doesn’t  sound   like any  time soon.

Here’s  another  exchange  from  Parliament on Wednesday:

Chris  Bishop  ( Opposition—Hutt  South)  : Is it correct that the government is assessing only two bids for the Auckland light rail project—one from the NZTA, and one from NZ Infra—and, if so, is he confident that the Crown will receive value for money from this procurement process?

Twyford: After years of under-investment in our largest city’s transport system and the gridlock that that caused, our government is determined to build the transport networks that a modern international city needs. It’s not correct to characterise the process as containing only two bids. Cabinet has asked the Ministry of Transport (MOT) to run a competitive process between two approaches. One is the proposal from NZ Infra which would see it finance, build, own, and operate the light rail lines, and the other approach, being developed by NZTA.

According to  reports, Treasury has warned the government that getting it wrong could see the cost of the $6bn project balloon like Edinburgh’s light rail, which took six years to build and cost twice its initial estimate.

In August the government said work wouldn’t even start in 2020, as it still had to weigh up who would build and run the scheme, NZTA, its own transport agency – or the NZ Super Fund, which made a surprise, unsolicited offer to build and run the project in April last year.

A   report  by Stuff  contended Twyford was warned by officials the NZ Super Fund bid wasn’t up to scratch. In fact, the initial bid was just six power-point slides.

Twyford now says Cabinet has asked the Ministry of Transport to run a competitive process between  two approaches. One is the proposal from NZ Infra, which would see it finance, build, own, and operate the light rail lines; the other approach being developed by NZTA would include the more conventional public-private partnership (PPP), or design and build models.

Early next year, Cabinet will decide which of these two approaches it prefers.

Clearly   it will be a  slow  march to  end   Auckland’s  gridlock.

Non-stop Air NZ flights to New York reflect changes in the aviation market

What do we make of the Air New Zealand decision to quit the Auckland-Los Angeles-London route?  Nothing much as it simply reflects the changing dynamics of the airline industry.

Gone are the days when Air NZ took the McDonnell Douglas DC-10-30 into the fleet and began flying Los Angeles, then the UK.  Most New Zealanders heading offshore had London as their destination.

To circumvent awkward international air services agreements, Air NZ was obliged to code-share with British Airways on the route to London, which in those days meant Gatwick Airport.

Then  Air NZ bought the Boeing 747-200 and Prime Minister Robert Muldoon over-rode strong Air NZ opposition to require the new 747s to be fitted with Rolls Royce RB211 engines. Continue reading “Non-stop Air NZ flights to New York reflect changes in the aviation market”

Fonterra’s milk price forecast will cheer farmers but govt has given ample cause for grumbling to persist

At  last,  a  break in the  clouds for  NZ’s  dairy farmers :  Fonterra  suppliers  could be looking at a  sharp  lift in income,  as the co-op revises   its  forecast  range for the  milk price   to $6.55-$7.55 kg/MS.And  the signals  are   strong enough to underpin projections the  milk price  will rise to its  highest level  since  2014  when the price  hit $8.40.

This  may  diminish, if not completely  halt, the   grumbling in the cowsheds  at  Fonterra’s  dismal  performance  over the last  couple of  seasons, racking  up  losses and  cutting  its dividend.

Whether  it  will  eliminate  the  animosity towards the government,  which  is  proposing to penalise dairy farmers  over  methane emissions and through its freshwater  policy, is  less certain.

The industry has  felt so targeted  by the  Ardern  government that it has  fuelled  a  rural  revolt,  based on the   belief  the government  is using  economic  tools   to force  farmers to  cut  their  dairy herds, and suffer  income loss. Continue reading “Fonterra’s milk price forecast will cheer farmers but govt has given ample cause for grumbling to persist”

Business confidence is bound to falter when govt and RBNZ have differing economic outlooks

Government  ministers  are adamant  New Zealand’s  economic  fundamentals are solid,   unemployment  is at a  record low,  growth is  faster  than  in Australia,   and  the  surplus in  the government accounts and low debt present  further opportunities to strengthen the economy.

Yet,  across the road  from the Beehive,  the view from the  Reserve  Bank  seems  very different.

In August  the  RBNZ  slashed  the official cash rate to 1%  and talked of the prospect of another rate  cut in November — on  the  basis a lower official cash rate is necessary to continue to meet its employment and inflation objectives.

The  bank  pointed to low business confidence and dampened business investment in 2018 which had remained weak in mid-2019. If sentiment remained low, growth might not increase, it  said,  an anticipated  over the  medium term.

The  RBNZ  also contends  the risks    for  the  NZ  economy  are so great  that in in the interests  of  financial  stability, core capital ratios  for the   country’s  big trading  banks   have to be  raised. Continue reading “Business confidence is bound to falter when govt and RBNZ have differing economic outlooks”

Peters puts the spotlight on Pacific and partnership in policy address to international affairs institute

Since taking office in this Govt, Foreign Minister Winston Peters has applied heft to NZ’s role in the Pacific. Now, 18 months on, he reflects on what has been achieved.

Speaking to the NZ Institute of International Affairs, he said NZ is moving away from the donor-recipient dynamics of the past, and building more mature relationships with Pacific Island countries.

The message that NZ is a partner, and not just a donor, has resonated in the region and enabled frank conversations about shared policy priorities and challenges.

The government has lifted its leadership diplomacy effort, with an increase in high-level engagement, both in terms of travel into the region, and hosting Pacific leaders and ministers here.

Agencies are focused on greater coherence on Pacific issues across all parts of the Government, recognising the close connection between foreign and domestic policy in our Pacific engagement. Continue reading “Peters puts the spotlight on Pacific and partnership in policy address to international affairs institute”

An important conference for NZ First as it braces for the prospect of a painful year ahead

Expect  the  old  campaigner Winston  Peters to be at  his belligerent  best as he   gears  up for another election.  He’s kept his party alive for 27 years  and  he  shows  no sign  of quitting.

The  omens  may be  bleak—polls  this week  showed  his party below  the  5% threshold– but  Peters  insists   NZ  First’s  own polling puts the party  “comfortably  in the  zone”  to do well.  He told   Radio NZ the  party   is getting  “enormous  support” in the provinces  and  he’ll use  the   conference  to  outline a winning  strategy.

As  for  those  political commentators  who say NZ  First  won’t make it back  into Parliament,  they are   “moronic”.

Yet  even  when  Peters  fires   up,  as  he  did  in  that interview,  the  odds   are stacking up against  NZ  First.    He  can brush off the polls, dismiss  leaks of  sensitive party documents  pointing to questionable  internal administrative issues,  and  assert   his  party  is  key to  the  coalition’s   success: yet  NZ First inevitably  will cop  some of the blame generated by adverse headlines  as in  the  NZ  Herald  on  Thursday – “Dire Shortfall in  State Housing”. Continue reading “An important conference for NZ First as it braces for the prospect of a painful year ahead”

Ministers enthuse at their economic prowess but polls suggest the public recognises a failure to tackle poverty

Government  ministers   are  exulting  over  how the  NZ  economy is performing—  and  their  own work  in  making it stronger.

David  Clark,  standing in  for  Grant  Robertson in Parliament on Tuesday, rejoiced at  how  solid the  “underlying  fundamentals of the  NZ economy are”.  He said the government  accounts for the June  year   showed how the coalition  had achieved  “strong financial results,  while also making significant  investments in well-being and infrastructure”.

Robertson,  singing from  the  same   songbook, celebrated NZ’s economic strength and resilience being recognised in a major update on the state of the global economy.

The IMF’s latest World Economic Outlook  shows   NZ’s  growth   forecasts   have held  steady  at  2.5%  in 2019, rising  to 2.7%   next year, against  the 1.7%  for the  rest of  the so-called  “Advanced Economies”. Continue reading “Ministers enthuse at their economic prowess but polls suggest the public recognises a failure to tackle poverty”