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Another Failure

Entry 762, on 2008-05-05 at 19:59:09 (Rating 3, Politics)

It looks like the center-left Labour government will be defeated at the election this year but at least they are doing as much as possible to improve things in New Zealand before they go. The latest news is that the government has bought back the Toll rail and ferry system. They paid $665 million for the system which was sold by the National government for next to nothing in 1993. Thanks a lot National - great move - not only did we lose millions on the deal, but we also had a bunch of corrupt gross incompetents running it in the interim.

Even National has been making noises along the lines that they won't make any major asset sales in the near future. Only the far right loonies at Act still believe the old dogma that private ownership is always the best option, and with any luck they will be eliminated form the New Zealand political landscape this year.

If I had been the government I would have introduced some legislation forcing Toll to run the system responsibly before offering to buy it. That way they would have either been forced to change their management style or they would have been more willing to sell the operation for less. Yes, I know that discourages future foreign investment, but to me that's a good rather than bad thing.

New Zealand First transport spokesman Peter Brown got it right when he said: "The failure (of negotiations between the Government and Toll) is yet another chapter in the sorry history of our rail services. Sold for a song in 1993 by the National Government to its rich mates Fay and Richwhite, rail has been run into the ground by a succession of owners. It is time to face facts - privatisation has failed. Government ownership could open the door to improved flexibility, innovation, efficiency and service, which are currently lacking".

Yes, I know that the old state run railways was a bit of a shambles but moving to an equally bad private system wasn't the answer. Our rail assets have been run down by their new owners so now the government will need to modernise the tracks and equipment. And now we might have a chance to run the rail and ferry network for the benefit of the country instead of making greedy foreign investors even fatter at our expense.

So don't I sound like the loony left socialist communist nutter? Maybe I do to those who have been taken in by the pro-business dogma of the last 25 years but the proof is there for all to see: most of the asset sales and commercialisations have not worked well: Air New Zealand, Telecom, Railways, the electricity system have all been failures as far as the benefit for the country as a whole is concerned.

Michael Cullen says that buying the rail business was the best way to increase investment in the industry and make it more responsive to customers' needs. Isn't that what the corporate competitive model is supposed to do? Shock! Horror! You don't mean that was all a big con surely. Well yes it was, and I just hope that people see that and vote wisely later this year.

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