ACT means secrecy

Back in April an OIA request exposed the absurd cost of ACT's charter schools - five times more per student than the government spends on public schools. ACT obviously didn't like that, but they have a solution: keep the number of students secret:

The seven charter schools set up at the start of the year have been told to keep their enrolments secret, by The Charter School Agency.

The organisation, which manages charter school contracts and funding, told RNZ it was not appropriate to share information about the rolls of the publicly funded private schools.

"The Charter School Agency does not intend to release the numbers of students currently enrolled at each individual school during the crucial establishment phase as this could undermine their commercial position and their efforts to build their roll and deliver quality education," it said.

...which means no more bad headlines about stupidly high costs per student. Convenient for a minister and an agency wanting to avoid criticism. But terrible for the public wanting to know whether these gold-plated luxury schools work or not, and if the cost is worth it.

(Of course, it's illegal: most of the schools in question are non-profit, and so cannot have a commercial position to protect, and for those that aren't, there's a clear over-riding public interest in transparency and accountability, in that student numbers are essential to determining whether the people of Aotearoa are getting value for money. But that would require a complaint to the Ombudsman, which would take a year or two, so the government wins simply by virtue of shit enforcement...)

There's an obvious parallel here with the government's boot camps - also run by an ACT minister - where after several high-profile failures, all outcomes were declared secret. And that's how this government prevents criticism: not by performing well, but by censorship and secrecy. Transparency? Our right to know? Not under this regime.

This industry should be destroyed, not subsidised

The health insurance industry is parasitic on our public health system, taking people's money, providing them with th easy, cheap stuff, then sending them straight back into the public health system for anything which might cost them money. But not enough people are buying it anymore. So they're doing what all NZ industries do when the going gets tough: demanding a government subsidy:

Health insurance is becoming too expensive for some New Zealanders and it's prompted a call from the industry for tax breaks to help.

Research from the Financial Services Council, which represents life and health insurers, shows that a third of people with health insurance have downgraded or reduced their cover in the past year.

They're wanting full tax deductibility for premiums, and an exemption from fringe-benefit tax for employer-paid schemes. Which would obviously be great for them, and great for the rich people using their system to try and jump the queue. But any money spent subsidising their profits like this would be far better spent directly through the public health system. And spent there, it would benefit everybody, not just health insurance executives and their shareholders.

This is not an industry that should be subsidised. Instead, like foodbanks, the government should be actively trying to drive health insurers out of business, by building a stronger public health system that provides for everyone's needs.

Dismantling the state

The New Zealand state has traditionally taken an expansive role in our society, providing health, education, and welfare systems to enrich and enable all our people. But ACT's weirdo radicals want to change that, and are directing the weak National government into enacting their agenda of dismantling the state. There's charter schools, obviously - publicly funded, at inflated rates, but not accountable; as well as funnelling public money into private schools to subsidise the rich. But today they've taken two other significant moves. Firstly, there's directing Te Whatu Ora to outsource all routine operations on ten-year contracts, intended to strip the public health system of capacity while granting windfall profits to the providers. And then there's "reviewing" - meaning cutting - ECE funding, while "making trade-offs between the quality of early learning and its cost" (meaning dumbing it down, deskilling the workforce, and turning it back into a high-profit, low-skill business for their donors in the kiddy-farm industry).

The latter is especially stupid. We've known for literally decades that arly childhood education is one of the best investments we can make in the future of our society, with enormous returns in future education, wellbeing, and earning potential (and savings on crime and welfare). It should be nationalised and incorporated in the state education system, to ensure everyone gets a good start in life. But National simply sees it as babysitting; a cost on the state, rather than a positive benefit. And their cheapness here is going to have long-term consequences for the future.

The good news is that their stovepiped "review" won't report back until this time next year, meaning there will be little time for them to do anything about it before we throw them out on their arses at the next election. As for the health system changes, if the contracts do not allow Te Whatu Ora to set the volume of operations and bring them back in-house, I would expect a future government to simply legislate them away. We should not let this temporary regime steal our health system from us piece by piece, for the profit of its private donors and cronies.

PPPs are still a rort

On Thursday, infrastructure minister Chris Bishop was wanking in the House about the benefits of Public-Private-Partnerships (PPPs). So how do they work out in practice? We all know Transmission Gully is a complete shitshow which ultimately had to be completely restructured after the contractor simply refused to complete the work. Meanwhile, in the UK, the first 25-year "build-own-operate" contracts for schools under their Private Finance Initiative are about to end. And of course its a disaster:

Stoke council bosses are locked in dispute over almost 3,000 school building issues just months before England’s biggest education private finance initiative (PFI) contract ends.

Local authority chiefs in Sheffield also fear legal action from trusts if they fail to ensure a PFI company meets contractual obligations to return schools back to state ownership in good condition.

Meanwhile, multi-million-pound court rows have also erupted in Lancashire over alleged defects in a number of schools built through similar deals, which are now coming to an end.

The core problem: maintenance spending costs money, which means lower profits, so PFI contractors didn't want to spend it, instead choosing to run the infrastructure into the ground. And while they have a clear legal requirement to make good at the end of the contract, they are basically taking a "fuck you, make me" approach in an effort to preserve their profits. And national wants to do this to our courthouses and defence bases, not to mention schools and hospitals.

But its not just them. Because it turns out that Labour also loves PPPs - anything to hide debt and make the books look good, while kicking the can down the road. Anything rather than live up to their name and properly tax the rich to pay for the infrastructure and services we need.

We shouldn't let them. PPPs are a rort, which result in the public getting screwed. And any politician who thinks otherwise is either stupid or on the take, and needs to be de-elected.

Will Luxon let ACT privatise the health system?

The racist piece of shit government is a year old this week, so there's a bunch of retrospectives and looking forwards and so on. Today it was Rimmer's turn - and in addition to gloating about how he's setting the policy agenda and making all the decisions, and about his racist attempt to repeal te Tiriti, he also dropped this:

And while it's not yet December he's already turning his mind to ideas ACT might push next year, hinting privatising the healthcare system would be one of them.

Seymour said a conversation about the future of the health system was needed as it was not working as is.

Of course, the sole reason it is not working is because of government underfunding, because small-government weirdos like Rimmer have been slowly drowning it in the bathtub.

We know what a privatised health system looks like: America, where any health problem costs you everything and drives you bankrupt. Rimmer may think that's a great idea (MPs get their health insurance subsidised, just so they're not in the same boat as the rest of us). But kiwis do not want to live like that. Not even National voters want to live like that. The question is will Luxon recognise this, or will he let Rimmer destroy our health system (and his government), the same way that he's letting him destroy our constitution and social cohesion?

National wants to loot the health system

Hot on the heels of their cancellation of Dunedin hospital (meaning a cut to health services in half the south Island), National has revealed the next part of their agenda: the outright privatisation of the health system:

The health agency is suggesting the Government to consider allowing private companies to build – and potentially run – the country’s public hospitals.

[...]

Earlier this year, Health New Zealand told ministers given the scale of investment required, "a range of options for different financing and commercial arrangements may be needed".

Build and leaseback arrangements, where private companies own the buildings, would help free up funds.

They also floated "Public Private Partnerships", and said they are widely used overseas.

Health NZ chief infrastructure and investment officer Jeremy Holman said PPPs are "a whole spectrum of how the private sector could work with the private sector from that side of it so there are many different options in there".

They're also hugely expensive, wasteful, and inevitably corrupt. You just need to look at Transmission Gully or the UK's Private Finance Initiative to see what a disaster they are for the public. But the contract providers laugh all the way to the bank.

National seems intent on destroying our entire society - the schools, the hospitals, te Tiriti, our democracy - in favour of an economy focused on corrupt capitalist extraction and rent-gouging. All that will be left will be motorways leading to airports and gas wells (at least until rising sea levels wash them all away). As for what to do about it, as with everything else this government is doing, the opposition needs to be crystal clear: this will be repealed on day one. Contracts will be legislatively revoked, with no compensation to contractors, and the health system returned to public ownership and control. Those who steal from us will not be allowed to profit from it.

Finally

When National announced the re-introduction of its corrupt charter schools back in May, Labour "leader" Chris Hipkins impressed nobody by refusing to commit to their immediate abolition. But now, finally, Labour seems to have discovered some principles:

Fixed-term contracts being signed for the schools are 10 years long, but former education minister Jan Tinetti told Q+A that a hypothetical future Labour administration wouldn't back down at scrapping the schools and their contracts.

"Labour has got rid of these before, and we will get rid of them again, because they are bad for young people and bad for their learning," she said.

"We will be looking at legal advice around that, but we will get rid of charter schools.

"We will not have charter schools."

The length of the contract doesn't matter, because parliament trumps contracts and can overturn them by statute. And if this deters corrupt profiteers from signing such contracts with National governments in future, so much the better. Those seeking to steal from us should be uncertain (at the least) over whether they will get to keep their ill-gotten gains. And if they're not, that's another failing of the Labour Party.

National's secret schools

The government just introduced its Education and Training Amendment Bill to the House. The name is deliberately obfuscatory, because what the bill actually does is reintroduce charter schools - effectively allowing National to privatise the education system. That's corrupt and it stinks, but to add insult to injury, National's new schools will be secret: the OIA will specifically not apply to them:

[That "Compare" note is to National's repealed charter schools law]

How does this matter? Well, state schools are fully subject to the OIA. That means they can be asked about things like uniform policies, staff pay, maintenance or library spending, health and safety precautions, bullying incidents, or disciplinary decisions - all of which have obvious interest to parents. They are (legally) transparent, and people use that transparency to hold them accountable and ensure their kids get a good education and are safe. But charter schools will not be transparent. Instead, all of that information will be kept secret, rendering them unaccountable. They will be able to profit gouge on their contracts by skimping on maintenance spending or staff wages, treat their students and staff arbitrarily and unfairly, and run an unsafe environment. While some information may still be accessible via the Ministry of Education under the contractor clause, much of the information listed above will not be held in their capacity as a contractor - meaning it will be secret. The implications for the fairness, accountability, and safety of these institutions is obvious.

Why has National done this? They don't say. There's no mention at all of the OIA exemption in the bill's Departmental Disclosure Statement or Regulatory Impact Statement. While some released Cabinet papers note that charter schools will be exempt, there is no justification for it. This I guess is what the Ministry of Justice calls "stronger scrutiny".

the case for the OIA to apply to charter schools is clear: they are performing a public function. We are paying for them. It is essential that they are transparent and accountable to the public. National's preference for secrecy is not only repugnant to our constitution and our democratic values - it will lead to unsafe, unfair, and dangerous schools. It should not be tolerated.

The looting is the point

Last time National was in power, they looted the state, privatising public assets and signing hugely wasteful public-private partnership (PPP) contracts which saw foreign consortiums provide substandard infrastructure while gouging us for profits. You only have to look at the ongoing fiasco of Transmission Gully to see how it was a complete disaster. So of course National are going to do it all again:

The infrastructure minister wants more private sector financing, such as public-private partnerships (PPPs), to pay for major projects.

In a speech to Local government New Zealand on Thursday night, Chris Bishop said he wanted government grant funding to become a last resort for councils.

"My speech talks about some of the things we've been talking about as a government for six months, and we've actually campaigned on - so making greater use of tolls, public private partnerships, things like value capture as well," he told Morning Report on Friday.

So, basically National's promised new motorways are going to be for the rich and for businesses, not for actual people, in order to guarantee a privatisable revenue-stream. And they'll be paying foreigners inflated prices to build those roads, to keep debt off the government's books and so meet a completely artificial and self-imposed debt-target.

This is inherently less efficient than simply borrowing to build, because the private providers will be paying higher interest rates while demanding a huge, government-guaranteed profit. That's the clear lesson from the UK's disastrous Private Finance Initiative. The fact that National is persisting with this leads to the obvious conclusion that the purpose of the policy is in fact the looting, not the infrastructure. Like everything else they're doing, its about paying off donors and cronies with public money - corruption on a grand scale.

Fucking useless

Yesterday de facto Prime Minister David Seymour announced that his glove puppet government would be re-introducing charter schools, throwing $150 million at his pet quacks, donors and cronies and introducing an entire new government agency to oversee them (the existing Education Review Office, which actually knows how to review schools, being presumably too likely to assess them against the same standards as everyone else, or wonder where all the money is going). Rimmer would also allow his cronies to take over state schools - effectively privatising them. All of this is deeply contrary to everything the Labour Party has told us it stands for, and last time National did this, Labour immediately abolished their bullshit. So what was Chris Hipkins' response? To refuse to commit:

Hipkins wasn't sure what their fate would be should Labour be returned to power in the coming years.

"What we did last time is we integrated them into the state education system - some became integrated schools; some became designated character schools.

"It's too soon to say what we would do next time around because we don't yet know what the contracts are going to be, we don't yet know what the structure is going to be - but we do believe that schools should be part of the public education system," Hipkins said.

And this is why Labour only got 27% last election: because they have no spine, no principles. They're as useless as a proverbial useless thing. And why would anyone vote for that, when there are parties who clearly know what they stand for offering an alternative?

Entrenching entrenchment

Last week, Parliament passed a rare entrenchment clause, protecting water assets from being sold by future governments without a referendum. As a supporter of anti-privatisation as a constitutional principle, I don't really have a problem with this - the supermajority which passed it represents a broad consensus across Aotearoa, and such supermajorities should be able to do things. But some people do, and as a result Labour is chickenshitting out, claiming (falsely) that they had no idea what they were voting for (which isn't the excuse they seem to think it is), and sending the issue back to Parliament's Business Committee to be "resolved" (which means repealed).

(I recognise that there are issues with passing such provisions under urgency, and that's on Labour for choosing to do their bill that way. As for the opposition being unaware of it until after it happened, that reflects as badly on them as the government's false claims of not being aware of what they voted for. Or are we really expected to accept that we pay MP's the big bucks to pay no attention whatsoever to the legislation they are voting on?)

Meanwhile, in all of the excuses and whining, the actual issue of how to protect public assets from being looted by the government of the day is being lost. But writing on Public Address, Graeme Edgeler has a suggestion there: a referendum on asset protection:

If you are someone who thinks public ownership of water infrastructure is so important that the government should act to entrench it, you do not need to convince National to agree with you. You need to convince the public (that shouldn’t be difficult: public ownership of water infrastructure is very popular!). Because there are two ways to entrench a law in New Zealand, and both have been used: the entrenched parts of the Electoral Act 1956 were entrenched by Parliament a supermajority of MPs (in fact, all of them) voted for it. But the Electoral Act 1993 isn’t law because Parliament voted for it, it’s law because the public voted for it: the entrenched bits of that are actually entrenched because there was a binding referendum.

If you are a Gordon or a Max, or a Eugenie, that’s your solution. Don’t settle for 60% protection. Go into the next election with the policy: if we cannot get 75% support in the House of Representatives to protect the continued public ownership of water infrastructure, we will hold a binding referendum on it, requiring a future Parliament to either agree by a 75% majority to sell water assets, or to come back to the public in a further binding referendum.

Which is good, but invites the question: why wait? Why not have the referendum at the next election instead? Because an easy fix for this is to amend the commencement clause so that entrenched protection for water assets only takes effect when backed by a referendum held under the Referenda (Postal Voting) Act 2000.

It is however an excellent suggestion for the broader issue. Because water assets aren't the only public assets in danger of being looted by future governments and sold off corruptly to their cronies. There are also state-owned enterprises, mixed-ownership model companies, crown-owned companies, and assorted other entities. All of these should be protected. And the way to do it is by an anti-privatisation law, backed by a referendum, which protects and entrenches public ownership and limits the ability to divest without a similar referendum or supermajority. And obviously, I think the Greens should offer such a bill among their policies at the next election, and demand it as part of the price for any coalition (I'd like to see it from Labour too, but that would require them to deliver on their public rhetoric, and my expectations on that front are low).

Constitutional scholars say "parliament can't bind its successors". But there's a power in Aotearoa which can bind future parliaments: us. And we should do it.

Entrenching anti-privatisation

Last week, Labour put the House into urgency to push on with its legislative agenda. Part of this included the committee stage of the three waters bill, and something unusual happened: they passed an entrenchment clause protecting the bill's anti-privatisation clause - meaning that a future government would need the support of a 60% majority in the House, or a referendum, in order to privatise water assets.

Constitutional scholars were outraged as this eroded our constitutional norm of entrenchment. And Labour being Labour, it looks like they're doing their usual chickenshit thing and reversing course because someone criticised them, rather than standing up for what they voted for. And I think they should stand up for it, because this is an important battle and there's no better chance than this to establish a constitutional norm against privatisation.

In case anyone has forgotten, successive hard-right governments in the 1980's and 1990's betrayed Aotearoa and sold off state assets to their mates at bargain basement prices, looting the state to enrich a clique of connected businessmen. The privatisations were corrupt, many of the former state assets were then asset stripped and run into the ground, and several had to be bailed out (some multiple times), or bought back so that we would have functioning infrastructure. This exercise in right-wing looting established privatisation as a dirty word in New Zealand politics. Many New Zealanders regard it as a crime, and something that should not be allowed to happen ever again. That's difficult in our constitutional system, and our way of doing it is effectively a constitutional warning sign: an entrenchment clause. While on the face of it an entrenchment clause says "you can't repeal this without a supermajority", the clause can itself simply be repealed (or in some cases bypassed by altering things elsewhere). So its actual force lies in the respect politicians have for it.

(Arguably, we don't do this often enough. The BORA is not entrenched, and has already been altered by a government to gut the right to a jury trial simply to save money. MMP (as opposed to its FPP bits) is not entrenched either. Or the list of prohibited means of discrimination in the Human Rights Act. Governments can, have, and are going to fuck with these for piss-poor reasons, and we should make it more difficult for them to do so. But that's another post...)

Those constitutional scholars are worried that using entrenchment for a mere "policy" issue will erode that respect. Which misses the point: the question of whether public assets belong to the public or to the government of the day to be corruptly distributed to its cronies is a constitutional one. The entrenchment clause simply makes that clear and answers "never again". And in terms of respect, that gets established by doing the thing and making it stick. Norms become norms by becoming normal.

Those constitutional scholars are also trying to scare people with the prospect of future governments doing this for other issues. What about if National and ACT entrench a three strikes law? What about if they entrench low taxes? Whatabout? Whatabout? Whatbaout?

Well, what about it? Under Parliament's standing orders, entrenchment clauses must be supported by at least the level of support needed to overturn them (so if something would require a 60% supermajority to overturn, it needs a 60% supermajority to pass). Under MMP, governments have tended to be weak, with coalition majorities of 5 votes or less. Gaining anything beyond a bare majority almost always requires gaining the support of parties outside the governing coalition. The current government is unusual in that respect, with a single-majority party and an extra 10 or 12 votes likely to support its agenda. The only other example is Helen Clark in 2002, where a collection of centrist parties in the House potentially allowed large majorities to be assembled (and resulted in much more consensus policy than usual). Otherwise, it would mean working with the opposition. And I honestly don't have a problem with that. Under MMP, party strength in the House reflects voter strength at elections. If a government can build a coalition behind an issue to entrench it to require a 60% majority to overturn, then all power to them. We live in a democracy, we get the governments we vote for, and we live with the results. If we don't like them, then we vote differently next time, throw the bums out, and don't let them back in until they've changed their ways.

Yes, doing this by an SOP under urgency is not ideal (and that's on Labour for how they chose to do this stage of the bill). Ideally, the government would have introduced an anti-privatisation bill at the beginning of its term, with anti-privatisation and entrenchment clauses for all classes of public assets. But they didn't, so its left to the Greens to do this piecemeal as things come up. Anti-privatisation is supposed to be a core principle for Labour. If they chickenshit out now, they'll be confirming their weakness and lack of principle. But then, that seems to be Labour in a nutshell now, doesn't it?

Privatisation screws the future

There's a major report out today from 350 Aotearoa, First Union and the CTU about how National's privatisation of the electricity sector has led to entirely predictable outcomes of price gouging and underinvestment:

Meridian, Mercury, Genesis and Contact Energy paid out $8.7b in dividends to shareholders between 2014 and 2021, which was more than the $5.35b they earned in profits over the period, their report said.

The former three companies had achieved that by increasing the book value of their assets by more than $10b to reflect “high and rising electricity prices” while taking on extra debt, they said.

“What we are seeing here is asset-stripping that delivers disproportionate benefits to a privileged few at the cost of residential consumers and global warming.

“It’s doubly ironic that this is possible because of the investments made over decades by the taxpayer, yet it's the poorest New Zealanders who are paying the price in higher energy prices.”

Essentially, the big gentailers borrow to pay dividends, while deliberately under-investing in new generation, ensuring both ongoing scarcity and that fossil generation remains part of the mix, keeping prices high. Because the thing we want from our electricity system - cheap, reliable, renewable electricity - just isn't as profitable as expensive, unreliable, and dirty generation. Its a perfect example of how markets don't care about social outcomes, and why the electricity system needs to be fully in government hands.

And if anyone is in doubt about the underinvestment, just look at who is building the big new solar power projects, or the big offshore wind projects that are going to power us in the 2030's. Hint: it isn't the established players. Instead, its all startups, foreign companies, or big consortia backed by the Cullen Fund. The power companies you'd expect to be building these things just aren't. Instead, they're getting projects consented, and then sitting on them and letting them expire, specifically to ensure that no-one else can build them and disrupt their supply. Because they have no interest in lower prices or a cleaner, cheaper electricity supply.

350 and the unions are calling for the government to use its majority ownership of the major gentailers to cut dividends and force investment into renewables. However, in echoes of Contact Energy's proposed "ThermalCo", they're proposing the government buy all the old fossil generation and ringfence it for security of supply purposes - essentially a public bailout of Genesis and Contact (both of whom have invested heavily in new thermal generation since the Kyoto Protocol was signed, and who therefore deserve to lose their money). Instead of that, I'd rather see the government just invest directly in renewables, and drive the dirty generation out of business, rather than "compensating" dirty generators for their poor business decisions. If Genesis and Contact want to try and split off their liability generation to prevent it from dragging down the clean, then let them. But we shouldn't be spending a cent on fossil fuels.

A failed state

People being told to drink sewage sounds like a headline from the early nineteenth century, before the public health revolution, or from a failed state, where it has collapsed. But its actually from modern England:

British people need to be “less squeamish” about drinking water derived from sewage, the boss of the Environment Agency has said.

Writing in the Sunday Times, Sir James Bevan outlined measures the government, water companies and ordinary people should be taking to avoid severe droughts.

He said: “Part of the solution will be to reprocess the water that results from sewage treatment and turn it back into drinking water – perfectly safe and healthy, but not something many people fancy.”

Bevan admitted the move would be “unpopular” and reactions on social media have been mixed but he said there was a need to “change how we think about water”.

The reason they're being told to do this is that decades of failed privatisation has seen a quarter of England's drinking water leak away, while privatised water companies dump untreated sewage into lakes, rivers, and the ocean. But rather than order the polluters to fix these entirely avoidable problems, the government is protecting their profits by telling people to just drink shit. Its a perfect example of how privatisation and deregulation erode the state, and ultimately lead to collapse.

KiwiBank's "new" ownership

This morning, the government announced that it was buying KiwiBank. From itself. Because two of its current government owners - ACC and the Cullen Fund - wanted to sell it to someone else. So they had to shuffle money from one part of the government balance sheet to another to dodge that bullet. But maybe it would have been better not to have had to dodge it in the first place, by not having government agencies which want to privatise and loot public property?

But there is an interesting question about the ownership model chosen. KiwiBank - via new corporate entity, Kiwi Group capital - will be a Schedule 4A company under the Public Finance Act. There are a bunch of these - Predator free 2050 and Green Investment Finance are ones you may have heard of - and its not an especially unusual form of government ownership. At the same time, there are at least two other models that could have been chosen: a Crown-Owned Company under the Crown Entities Act, or a standalone State Owned Enterprise. These each have slightly different obligations, and its no easier or harder to place things under one model than another (its all done with Orders in Council). So why choose one rather than the other? The major differences seem to be that while SOEs and Crocs must be fully government-owned, Schedule 4A companies only need majority ownership - making them easier to part-privatise, or pull National's scam of forcing other government entities to buy them, effectively raiding their dedicated funds for ready cash. SOE's are also subject to an obligation to be a successful business, meaning as profitable as non-government companies, and to "exhibit a sense of social responsibility" (all three however have good employer obligations, as you would expect, and all are subject to the OIA). SOE's are also subject to Treaty of Waitangi obligations, and to a special regime to enable the return of stolen land. It will be fascinating to see which of these differences the government thought was an advantage, and which a disadvantage, and why it chose the ownership model it did.

Our national airline should not be complicit in war crimes

Since 2015 Saudi Arabia has been waging war on the people of Yemen. A key part of their war is a naval blockade, which has restricted food supplies, leading to the worst famine in a century. Its a war crime - and our national airline is helping them do it:

A 1 NEWS investigation has revealed that Air New Zealand's business unit, Gas Turbines, which specialises in servicing military marine engines and turbines, has been supporting the Saudi Navy.

The Saudi Navy has been blockading Yemen - stopping food and medicine getting through to the country.

[...]

Last week [Air New Zealand] finally issued a short statement saying Air New Zealand Gas Turbines had been carrying out work for the Saudi Navy through a third party contract.

"It is through a third party contract that work has recently been carried out on two engines and one power turbine module from vessels belonging to the Royal Saudi Navy.

"The Gas Turbines business has not contracted directly with the Royal Saudi Navy and will not be carrying out any further work of this nature."

While its good that they've stopped, this isn't good enough. It shouldn't need to be said, but: corporations should not help governments commit war crimes. And that especially goes for our part government-owned airline. We bailed them out to help them get through Covid. That's now looking like a mistake. At the least, it looks like the government should just make a formal takeover and bring Air New Zealand back under full public control. Because we clearly cannot trust the values of the private sector for our national airline.

The Greens are supposed to be better than this

The Greens have ignored their own policies to funnel public money to a private school in Taranaki:

The Green Party has been caught bending its own party policy after a private school in Taranaki was given $11.7 million to fund an expansion programme.

The money comes from the Government’s $3 billion shovel-ready projects fund, and was announced in a press release from Greens co-leader James Shaw who said the grant to Green School New Zealand would help the school expand its roll from 120 students to 250, creating 200 jobs.

“Securing over 200 jobs will help direct more money into the parts of the economy where most people earn their livelihood. These are the parts of the economy that are sustained when public investment is directed at getting people into work and earning money that they then spend in their local communities,” Shaw said.

“The support we are providing will help Green School to meet growing demand from parents all over New Zealand, and the rest of the world, wanting to enrol their children. This will mean more families can take the opportunity to put down roots in Taranaki and contribute to the future growth of the region,” he said.

The Greens' education policy says that "Public funding for private schools should be phased out and transferred to public schools." This is a private school, providing exclusive education for the rich. Having "green" in the name and an ecological focus doesn't change that. This school should not be funded. Instead, the money should be used where it can do the most good: on public education. There are schools in Taranaki which are overcrowded, leaking and rotting, and they need this money far more than new-build, fancy education pods at a private school whose international market has basicly just disappeared completely.

Meanwhile, its I guess another example of how being in government has changed the Greens, how power has corrupted them. And that's not something we should welcome.

A death-knell for PPPs?

When the then-National government approved a public-private partnership (PPP) funding model for Transmission Gully, it claimed it was all about building it quicker and cheaper. Paying a private company's profit margin would supposedly give "certainty of delivery and... better value for money". So how has it turned out? The cost has blown out by $191 million, a third of the road has failed quality checks and needs to be torn up and re-laid, the project is now delayed until 2021, and rather than face these costs, the PPP contractor is planning to walk away and dump everything back on the government:

Officials acknowledged on Sunday the already-delayed Transmission Gully project would be delayed until 2021. This has the potential to blow out costs by yet-more hundreds of millions of dollars. NZTA said in February the project’s estimated costs would over-run by $190m to $1b and the completion date had been extended from May to December this year.

An NZTA spokesman said on Sunday the project would now not be completed until some time in 2021 and the agency was in urgent negotiations again with the PPP’s contractor CPB HEB about the project. He would not comment on the fears of those close to the project that the contractor was days away from pulling out completely and dumping the project uncompleted back on the taxpayer. The project was suspended during the Level 4 lockdown, but failed to resume with all its workers as expected last week.

The entire project looks to be an expensive failure. Rather than transferring risk to the private sector, it turns out to be the usual scam of privatising profits and socialising losses. And its hard to escape the impression that we could have built it quicker and cheaper and without the quality issues caused by the contractor shaving costs and using substandard materials to increase its profits by just getting the government to do it in the first place. And hopefully it will be a death knell for PPPs in this country.

The Air New Zealand bailout

Stuff reports that the government is going to have to throw $2 - 3 billion at Air new Zealand to get it through the pandemic. Good. While international routes are basicly closed, Air New Zealand is a strategic asset which is vital to our tourism industry, not to mentioning airfreight. We need it keep functioning to ship in medical supplies, and we need it to still be there when this is all over, so it is entirely appropriate that the government steps in. And the fact that we'll end up owning more of it in the process is even better.

At the same time though, its worth pointing out: despite successive efforts at privatisation, we end up having to do this every 20 years or so. We sold it in the 80's, reacquired it as part of a $885 million bailout in 2001, sold it down again under Key in the 2010s, and now we're reacquiring it again. While that reacquisition protects the strategic asset - that's why we do it - it also protects the wealth of the parasites who have bought into this company, which doesn't sit so well. Given that we just keep having to do this, isn't it time we cut them out entirely and simply renationalised it completely?

Stupidity

Stuff reports the government is divided and dysfunctional over Auckland light rail. But the really stupid thing is Labour's preferred option:

Labour Ministers are said to be increasingly keen on the NZ Super Fund option. Stuff has been told that this is based on a PPP with NZ Infra to build and run the rail network for 50 years.

Though currently equally owned equally by the Canadian and New Zealand Funds, this does not guarantee funding or returns would be equal. Stuff has been told these could be split 70-30 split in favour of the Canadian wing.

The Companies Office says NZ Infra is owned equally by the Canadian and New Zealand funds, but Stuff has been told this does not guarantee equal investment and therefore equal returns.

[...]

Some in the Government have been spooked by spiralling cost estimates and the amount of money likely to be sent sent offshore. Cost estimates shared with Stuff by sources familiar with the matter are now as high as $20 billion.

The evidence from both New Zealand and overseas is that PPP's don't work. All a private provider adds is a profit margin, meaning the government pays more for less. They're a bad deal at the best of times, but when interest rates are rock-bottom and it is effectively free for the government to borrow, they are pure stupidity.

So why is Labour keen on this? It lets them hide debt, so they can pretend to meet their (purely artificial) debt target while providing big infrastructure. But they - or rather, we - would pay premium for that dishonest "service", in the form of inflated profits flowing overseas. As for building and funding it ourselves, apparently Labour - once the party of railways and state housing, the party that built New Zealand - doesn't believe in that anymore. Which perhaps explains their complete failure over state houses and kiwibuild.

Fortunately, it looks like the Greens will stop them giving a billion dollars a year to Canada. And we should thank them for it.