Tuesday, 14 July 2015

Trotter jumps the shark

Chris Trotter's latest column really jumps the shark. It's a pitiful attempt at reclaiming the moral high ground Labour had thought it stood on until Sunday.

Take the central claim Trotter is making, that China has replaced Britain as our "imperial" power. Labour, in its clumsy attempt at directing the narrative on housing affordability to blaming foreign buyers the Chinese, is simply reflecting on this.

You just cannot seriously argue that China now occupies the same place for New Zealand economically as Britain did up until 1972. That is autarkist nonsense that doesn't stand up to analysis.

For starters New Zealand's exports to the UK were a massive proportion of our economy, right up until the 1960s - where they averaged around the 55% mark. They've now fallen so low Statistics NZ count them as part of the EU. For this past year, China accounted for 23% of exports and 17% of imports. While growth has been strong it's highly unlikely to continue at the pace it has, with growth tapering off this year to May.

Then there's foreign investment. Despite what you might think watching or reading the news, the biggest foreign investors in New Zealand are still Australia, the United States and the UK, in that order.

Monday, 13 July 2015


For my generation and many others, housing affordability is a major issue. It's an issue that is multi-faceted and like anything, no one change can bring the market more into line with people's ability to buy a home. As someone who believes in a property owning democracy I see it as vital to the functioning of our system of government that we all have a tūrangawaewae- a place to stand.

I'm genuinely frustrated by the oppositions' attempt to reduce this issue to the foreign buyers facet, as if a ban on foreign buyers is all that's needed to fix the problem. Putting aside how difficult it will be to enforce such a ban (just look at New South Wales experience) it's the easy way out. And I really do wonder if Labour would be pushing for the ban if data from 2013 (showing that possibly the greatest number of foreign buyers are from the UK) is correct.

Friday, 10 July 2015

A new track for KiwiRail II

In the document dump from the Treasury this week comes the revelation that they advised the government to shut down all or part of KiwiRail's network and services. The government wisely rejected this advice. Once again, this emphasises that the way we've structured rail transport in New Zealand is not working.

Here's the way things work at the moment:

  • New Zealand Railways Corporation, now a statutory corporation, owns the land underneath the railway lines and a lot of other land leased to KiwiRail's customers. This is to keep the value of the land off KiwiRail's books.
  • KiwiRail, which is a 100% State-owned enterprise. KiwiRail owns all the railway infrastructure network, locomotives, wagons, workshops, ferries, signalling and control systems to run the rail network. While freight and ferries are the mainstay of KiwiRail's business, KiwiRail has two business units running passenger services as well - Tranz Metro in Wellington and KiwiRail Scenic Journeys for the remaining (three) long-distance passenger services. Tranz Metro receives subsidies from the Greater Wellington Regional Council (GWRC) which also owns a lot of its rolling stock.
  • TransDev, which runs Auckland's metro commuter network on KiwiRail's tracks using their electrification; it receives subsidies from Auckland Transport to do this.
  • Dunedin Railways, which runs the famous Taieri Gorge Railway out of Dunedin and other services. It owns the remaining portion of the Otago Central Railway from Taieri to Middlemarch, and runs trains on KiwiRail's network.
  • A host of other smaller non-commercial operators, mainly in the heritage space.
  • Regulatory oversight is by the New Zealand Transport Agency, which issues rail licenses to rail operators. The Transport Accident Investigation Commission (TAIC) provides investigatory services in the event of accidents.
In my view, it would be much better if we took a leaf from Queensland's book. In Queensland the state government has retained ownership of the state rail network (which incidentally is built to the same track gauge as New Zealand, and manages to operate high-speed trains - showing that the claim so-called "narrow gauge" is slower is nonsense), for which it charges the freight operators a fee to use. The State of Queensland then privatised the rail freight operations but kept rail passenger services in public ownership. We probably don't need to go quite as far, but I do think you could apply the mixed-ownership model to KiwiRail once we've got the model sorted.

How could a future model for rail transport in New Zealand look, if we adopted the Queensland model? Here's what I think:
  • KiwiRail retains the rail freight and ferry operations, owning locomotives, wagons and workshops to provide these services. At some later date, 49% of KiwiRail could be floated on the NZX.
  • The Railways Corporation is dissolved and merged with NZTA.
  • The entire rail network - including track, train control, communications, maintenance, and signaling, is transferred to NZTA. NZTA charges all rail licensees for using the network on the same basis as Road User Charges (RUCs).
  • Tranz Metro could be contracted out to a new operator, probably at GWRC's choosing, much like Auckland's commuter network.
If KiwiRail no longer operates on part of the network, NZTA will be able to lease lines to other operators, and facilitate interchange of wagons.

Thursday, 2 July 2015

"It's time Kiwis had a say in nation's top job"

It's that time again - time to select a new Governor-General. In 12 months the current Governor-General, Sir Jerry Mateparae, term in office will end.

In my view, the Governor-General should be elected by a super-majority vote of parliament (yes, technically, the appointment would be by parliament making a recommendation to the Queen). It seems ridiculous to me that we appoint members of the Electoral Commission using this process, yet the Governor-General, a much more powerful role constitutionally, is simply appointed by the Prime Minister of the day.

Here's an article I wrote back in 2011, and published in the New Zealand Herald:

Some time this month the Prime Minister will announce who New Zealand's next Governor-General will be. While they represent the Queen in London, constitutionally the Governor-General is the highest office a New Zealander can aspire to.

The appointment is entirely the choice of the Prime Minister of the day. The Queen merely rubber-stamps the appointment.

The new Governor-General will take office in August for five years. He or she will receive a salary of around $180,000, live in two palatial mansions in Wellington and Auckland, be driven around in late-model Jaguars and have a host of other privileges. For the first time, though, he or she will have to pay income tax like the rest of us.

After the infamous comments by TVNZ's Paul Henry last year, it is likely the appointee will be someone who "looks and sounds like" a New Zealander.

In fact, since 1967 we have had someone who looks and sounds like us in the role, including two women (Dames Tizard and Cartwright) and New Zealanders of Maori (Sir Paul Reeves) and most recently Indo-Fijian ancestry.

Yet no New Zealander can aspire to being our head of state - that position is reserved for a family in the United Kingdom. However, we recognise that we have to start somewhere. The Governor-General's office is an obvious candidate for reform.

The Republican Movement believes nominations for the job ought to be made by the general public, instead of the Prime Minister's office sounding potential nominees.

The public's nominee should be subject to approval of three-quarters of MPs and a majority of party leaders in the House of Representatives. It should not be up to the Prime Minister to appoint the officer able to dismiss his or her government from office.

The Government has already passed legislation to ensure members of the Electoral Commission are appointed by a resolution of the House of Representatives following nominations to a committee of Parliament.

Similarly, Ombudsmen and the Auditor-General are appointed by the House. Members of the Electoral Commission are nominated to the House by a special committee of Parliament.

There is no reason why the Governor-General should not be nominated to the Queen in a similar way, albeit with additional requirements to ensure the appointee is neutral, and acceptable to all sides of politics. That is why we propose a "super-super majority".

In the Pacific, Papua New Guinea and the Solomon Islands elect their Governors-General. This is a consequence of both countries gaining independence about the same time in the 1970s.

Since 2007, Samoa has elected its head of state. The first such election took place in 2007, after the death of the last Malietoa who was a king-like figure under the 1962 independence constitution - written by New Zealand legal experts.

Elsewhere within the Commonwealth the republics of India, Malta and Trinidad and Tobago elect their presidencies via parliament with no problems.

This change would be a first step towards reforming the Governor-General's office into a full head of state. Dr Michael Cullen recently proposed such a change in his paper to the Reconstituting the Constitution conference.

Dr Cullen proposes that following the end of the Queen's reign a referendum is held to either make the Governor-General New Zealand's head of state, or for Prince Charles to carry on as our "Sovereign" in London.

In any event, Dr Cullen - a self-described "token-monarchist" - believed that Parliament should debate the appointment by way of a parliamentary order. This does not require legislation, although Victoria University constitutional lawyer Dean Knight, who also spoke at the conference, has prepared a potential members' Bill to amend the Governor-General Act.

There is much secrecy around the appointment process. The Republican Movement has made numerous Official Information Act requests to the Prime Minister's office to clarify the process and framework for the nomination process. All they have confirmed is that the appointment is made in secrecy.

The Prime Minister's office advises the Prime Minister on the framework for appointment, but the exact details of this advice remain shrouded in the official secrecy that surrounds the monarchy.

The changes we propose will clarify the vague and undefined conventions around the appointment and dismissal of the Governor-General. It is often claimed the Prime Minister must consult with the Leader of the Opposition, but this appears to have rarely been the case.

In 1977, when former Prime Minister Sir Keith Holyoake was elevated to the position, then leader of the Opposition Bill Rowling learnt of the Prime Minister's choice by a radio announcement.

If the House of Representatives debate the nominees it will further our constitutional evolution. It could be the first step to a New Zealand republic with an independent head of state.

* Lewis Holden is chairman of the Republican Movement