Wednesday, 17 December 2014

Megaships and the future of New Zealand's ports

Larger container ships are on their way. As I've written here before, one of the biggest impediments to New Zealand exporters is the cost of shipping our products to their markets -and the government's goal under the Business Growth Agenda of increasing the proportion of Exports to GDP to 40% by 2025 (we're currently sitting at 26%). According to NZIER  At the moment the median size of container ships visiting New Zealand is 3,000 TEU (Total Equivalent Units). This is set to change rapidly with ships from 2017 to enter international service able to carry up to 8,000 TEU. Because 99.5% of New Zealand's exports are shipped, this is of critical importance.
New Zealand's freight task. Source: Ministry of Transport

This has major implications for our seaports and land transport in New Zealand. On the one hand it means that the cost of transport for New Zealand's exports should decrease as economies of scale are met. But larger ships also have significant costs - particularly resolving bottlenecks in the road, rail and coastal shipping networks.

Recently the Ministry of Transport has released the "Future Freight Scenarios Study". The report, written by consulting firm Deloitte, looks at ten different scenarios for New Zealand's seaports. The scenarios are based on a "hub and spoke" approach to seaports.
  1. Status quo: 10 container ports around New Zealand in Auckland, Tauranga, Napier, Taranaki, Wellington, Nelson, Christchurch, Timaru, Otago and Bluff.
  2. Five hub ports - Auckland, Tauranga, Napier, Lyttelton and Otago. Others cease international trade from 2017, becoming "feeder" ports.
  3. Four hub ports (two per island) - Auckland, Tauranga in the North and Lyttelton and Otago in the south. All others become "feeder" ports.
  4. Three hub ports - Auckland, Tauranga and Lyttelton, all others become "feeder" ports.
  5. Three hub ports - Auckland, Tauranga and Otago, all others become "feeder" ports.
  6. Two hub ports - Auckland and Lyttelton
  7. Two hub ports - Tauranga and Lyttelton
  8. Two hub ports - Auckland and Otago
  9. Two hub ports - Tauranga and Otago
  10. One hub port - Tauranga
The report concludes that the status quo is unlikely to continue with larger ships visiting fewer ports in New Zealand into the future. This creates significant investment requirements in the hub ports. Each scenario is assessed based on the Benefit-Cost Ratio (BCR) methodology. Of the non-status quo scenarios, only scenario 2 has a positive BCR of 0.19 over 30 years with a 6% discount rate. In other words, the other scenarios all have negative economic impacts - the costs outweigh the economic benefits.

Thursday, 4 December 2014

Amalgamation: report has landed, get your submissions in!

The Local Government Commission has reported back with its draft proposal for local government in Wellington (useful factsheet here).

Unsurprisingly they've proposed a "super-city" super council for the whole of the current Wellington Region, replacing the Masterton, Carterton, South Wairarapa, Upper Hutt, Hutt City, Kapiti District, Porirua, Wellington City and Wellington Regional councils with a single unitary body.

This body will consist of 21 councillors from across the region. Local Boards, as in Auckland, form part of the "Greater Wellington Council". They are "integrated" with and "work alongside" the governing body.

I am not in favour of a Wellington region super-city. As I said yesterday I think the case for one is weak, and the challenges Wellington faces as a region can be resolved through cross-council organisations.

The next step will be the commission taking submissions - more details on how you can make a submission are below. After that, the hearings on the proposal, the Commission will decide whether to issue a final proposal. If the Commission issues a final proposal, the region can demand a poll. A poll will be held if ten percent of electors in any affected council area sign a petition. The signatures must be gathered within sixty working days of the release of the final proposal. The poll would be held across the entire Wellington region and is binding.

You can make a submission by downloading the form here (Word document), and send it to:

submissions@lgc.govt.nz

or posted to:

Local Government Commission,
PO Box 5362 ,
Wellington 6145.

Submissions close 4pm Monday 2 March 2015, so get yours in now!

Wednesday, 3 December 2014

Amalgamation: a very weak case

The Local Government Commission's report on council amalgamation in Wellington is due out tomorrow. Porirua Mayor and amalgamation advocate Nick Leggett has written an op-ed in today's Dominion Post which in my view shows how weak the case for amalgamation is. 

The issues of transport could easily be managed by cross-council organisatons, without undermining local democracy. We have already achieved major gains through shared services in areas such as water reticulation (through Capacity Infrastructure, which is owned by the main territorial authorities in the metropolitan Wellington region).

I'll be waiting for the report(s) tomorrow.

Tuesday, 25 November 2014

The Mighty Totara: The Life and Times of Norman Kirk

A Mighty Totara
During the whole selection/election campaigns there were a number of books that came out which I'm now catching up on - apart from Dirty Politics (of course) at the top of the list was The Mighty Totara: The Life and Times of Norman Kirk by David Grant. I've just finished the book and I'm very impressed.

Coming from a fairly Labour oriented family on my fathers' side I know how venerated and fondly remembered Kirk is. Grant has gone beyond the veneration and myths and given a well balanced account of Kirk's life. Grant gives a fair assessment of the nature of New Zealand politics and doesn't stoop to simple charactarisations of anyone - including the Opposition, even noting the fact that Kirk was the only Labour leader Rob Muldoon said he respected, because of the poverty they both experienced growing up.

The overview of Kirk's life is very well set out and very well researched. The extensive references and footnotes (which are interesting reading themselves) are indicative of this.

Having said this though, a number of points about the book did disappoint me. The first was the fact that Grant left a lot of material about Kirk's private life - specifically his "unhappy marriage" - right up until the end. It is almost as if Grant is embarrassed to have it in the book. It is a shame that the impact of his frenetic workrate is only discussed whenever his health issues are mentioned.

The second point is broader, and my main criticism of the book. I've always been fascinated to know why it was Kirk took up the cause of an independent identity for New Zealand, accepting the geopolitical reality we were faced with in the early 70s with our relationship to the 'mother country'. (Fortunately Grant does note correctly that his view wasn't unique to Kirk, who worked in a bipartisan way while in opposition with Jack Marshall, who himself understood the implications of Britain's EEC membership). To my mind this was his greatest legacy, and certainly the longest lasting.

Kirk was someone who left school at age 12 to find work, and as Grant clearly sets out was always suspicious of anyone with a formal education. So it could not have been a philosophical position for him, but a practical one. There are some cues on this - in Margaret Hayward's book Diary of the Kirk Years (Hayward was Kirks private secretary) it's recalled that Kirk referred to the portraits of the Queen and Prince Phillip in the Prime Minister's office disparagingly and had them removed. Another book of Kirk's quotes mentions the need for New Zealand to re-orient away from trading with Britain towards Asia. I would've liked to have read more about why Kirk specifically took up this cause.

It was not as if - as Grant sets out - Kirk took a great interest in economics. It because clear in The Mighty Totara that this was a critical weakness for his government. Grant appears to lay the blame for Labour's defeat in 1975 largely on the economy. This was a product of Kirk's refusal to listen to his Minister of Finance, Bill Rowling, on the need to take actions to combat galloping inflation (one interesting tid-bit was that Rowling wanted to float the New Zealand Dollar after the end of the Bretton Woods system, something Kirk was dead against). Declining exports (due to our dependence on Britain) and oil shocks didn't help, and Kirk's governments responses (carless days, more public spending) were certainly the orthodox responses - which were of course carried on by the incoming government in 1975.


I'd actually go so far as to say you could make this book into a TV mini-series (New Zealand's answer to The Kennedys perhaps?). In tracking Kirk's life from his tough upbringing to his early start in the workforce, his hobbies (including shooting pigeons at parliament from his office!) and the development of his political career without leaving out the warts makes for compelling reading. I throughly recommend Grant's book to anyone interested in New Zealand politics and history.

Next up is Richard Seddon: King of God's Own by Tom Brooking.

Monday, 24 November 2014

Re-writing founding myths

Bryce Edwards has a good round-up in the National Business Review of the various opinion posts and pieces on the Waitangi Tribunal's report last week from the Te Paparahi o Te Raki Inquiry dealing with sovereignty (chocolate fish for best blog post title goes to No Right Turn for "There was no cession in New Zealand".)

It turns out though that the hysteria I had predicted (and predicated my post on) didn't eventuate. The usual suspects - Dr Paul Moon, Muriel Newman, et al, took issue with the report. But in the main we haven't seen the sort of backlash of, say, 2004. This is a good thing, as it shows perhaps we've either matured as a country, or the Tribunal's ruling was a confirmation of what was known for a while (although the Prime Minister's comments do seem to contradict this!).

The question though, is where to from here? As Morgan Godfery points the report means:
The Crown should – whether out of constitutional, political or emotional necessity – prove its de jure sovereignty.
This is an issue that has been traversed by academics such as Jock Brookfield (especially his book Waitangi and Indigenous Rights), which I suggested to Morgan as an authority on this subject.

In my view it means the acceptance of a different, and maybe uncomfortable for some, founding myth of New Zealand.