Urgent Debates — Tranz Rail

I have received from the Leader of the Opposition, the Hon Bill English, from the Rt Hon Winston Peters, from Rodney Hide, and from Jeanette Fitzsimons applications under Standing Order 376 to debate the Government’s decision to acquire an interest in Tranz Rail Holdings. I omit the letter from Mr Peters from consideration because he did not include any authenticating material, and I would urge that his whips read the Standing Orders. I have also received a letter from the Hon Richard Prebble, seeking to debate the decision of the Government to commit troops to Iraq and further troops to Afghanistan.

Those are particular cases of recent occurrence involving ministerial responsibility, and both meet the criterion of justifying the immediate attention of the House. Standing Order 378 provides that if more than one application received on the same day justifies a debate the Speaker gives priority to the matter that, in the Speaker’s opinion, is the more urgent and important in the case of there being two applications. In considering this issue I have taken into account the fact that a ministerial statement was made early today on the deployment of personnel to Iraq and Afghanistan, and the fact that in regard to Afghanistan, anyway, the House in 2001 debated and endorsed participation in the mission to that country. I have also taken note of the fact that I did receive four letters about one particular issue.

For those reasons I accept the applications relating to Tranz Rail Holdings. As the first application that I received was from the Leader of the Opposition, I call on him to move the motion.

I move, That the House take note of a matter of urgent public importance. We see in the Tranz Rail deal yet another example of how this Government is slowly strangling our infrastructure in New Zealand. There is among this Cabinet a growing belief in its own commercial judgment, and a growing sense of momentum that it has the capacity to interfere in some of the most complex commercial and economic issues this country has to deal with, because it has the strong belief that it can do better than anyone else.

Before I come to the Tranz Rail deal itself, I need to alert the Government to the effect that its actions have. By the time that it has bought Air New Zealand, set up the Electricity Commission, made a mess of the roading bill, and done this deal over Tranz Rail, it will have sent some very clear signals to the commercial community in New Zealand, and also to any potential investor in New Zealand from overseas. Those signals are bad ones. It is now clear that the Government at any stage, for any reason, can interfere with any network or infrastructure industry in New Zealand, because there is no major infrastructure industry where the Government has not stepped in. That is the first point. Anyone who is considering investing in New Zealand has to take into account now the risk that Dr Cullen will decide that he knows best. He may have a fancy little deal that squares off the Greens, the polling, the business community, and the Labour caucus, so he may step in—and he does. So we have now the reintroduction in New Zealand of something that disappeared 15 years ago—that is, political uncertainty.

The other signal the Government sends to investors is related to that. It is the signal that the rules can change at any time. Let us imagine that someone is considering buying Tranz Rail. The Government is in there trying to do a deal, having strong opinions about particular bidders that it decides it does not like, and with a very clear understanding in the wider commercial community that the Government will break or bend the rules to suit itself. I will come back to that. With regard to the rail industry, this decision follows on very closely from what occurred in the electricity industry, where, in order to execute a short-term political tactical move, the Prime Minister decided “something needed to be done”. An Electricity Commission has been invented. That will skew the rules of the electricity market for many years to come, and the investors are starting to vote with their dollars. They are starting to decide that if they cannot trust the Government to operate according to certain and predictable rules, then they are unwilling to take the risks of making an investment.

The way that the Government steps in is pretty random. It seemed to be willing to let the large-scale forestry assets in the central North Island—which anyone would argue are of important economic and public benefit in New Zealand—go through the normal commercial process. It was a bit messy, but that process sorted out the fact that the original buyers had paid too much, and when they could not realise the value of the assets, a receiver picked up those assets and has been dealing with them in ways that the commercial community understands and can react to. On the other hand, the Government has decided, for reasons it has still not explained, that it had to step into the Tranz Rail argument. The Minister has offered only one explanation as to why the Government stepped in: that the trains would stop running. That is the silliest explanation that he could have given, because any shareholder, creditor, or receiver has a strong interest in making sure that the trains are kept running, and they would not have stopped. Given that no one believes that reason, we look forward to hearing what the real reason may be. The Government has introduced into New Zealand’s investment environment uncertainty, political interference, and a lack of transparency, and that is slowly strangling the lifeblood of this economy.

Let us look at the action the Government has taken. I want to pick up on what I regard as the most distasteful aspect of this deal. This Government campaigned through the late 1990s for a Takeovers Code, which it then put in, and now it puts up a deal that requires a waiver from that code. The Takeovers Code, as the New Zealand Herald absolutely correctly pointed out, was put in place to stop exactly the type of deal the Government proposes. Paul Swain put in place the Takeovers Code, and now he is the Minister overseeing a deal that requires a waiver from the panel, because he is trying to get control of Tranz Rail without making an offer for 50 percent of the company. The Takeovers Code effectively rules out any ownership offer of between 20 and 50 percent of a company. Who is asking for exactly that kind of proposition? It is the Government. [Interruption] The Government says it is not doing that. Let us hear from the Government about whether this deal will need to go to the Takeovers Panel because a waiver is required, or whether the Government has found a way around that requirement. That would show—and it does show—that the Government wants to bend the rules for its own benefit when it wants to do its own deal for its own political purposes.

Now I come to the second most distasteful aspect of this deal. This deal is an indirect subsidy to the major users of the railway. It consists of the Government buying the tracks, taking all the investment risk on the tracks, and charging an access fee to any operator who operates on those tracks—or actually to Tranz Rail, because it is a monopoly, and I will come back to that. Why is the Government doing that? One cannot help but conclude that the major users have exercised substantial influence over this Government in making that decision. Members know whom the large user is who will benefit the most: Coalcorp.

💬 Hon Paul Swain: Solid Energy.

Righto, Solid Energy. The Minister for Economic Development made that quite plain when he said that this deal would now allow the West Coast coal to be transported across the South Island.

Today I challenge the Government to outline just what its objectives are. Why should the taxpayer front up with a substantial subsidy for rail freight, when the primary beneficiaries of that will be Solid Energy, Fonterra, and the forestry companies? If the Government wants to provide cheaper rail freight rates, it has the easy option of just providing a direct subsidy. Why does it not just provide a direct subsidy to a commercial operator of our rail network? The Government is quite free to do that. If it wants to get freight volume off the roads, it can just provide a direct subsidy. Then it would have a clean-running commercial operation where the taxpayer had not taken a substantial investment and commercial risk, and we would have a transparent transaction between the taxpayer and those who will benefit from this indirect subsidy.

Today I challenge the Government to tell us who will benefit from this decision. Why has the Government not offered a transparent subsidy? I say to the senior Labour whip that the reason for that is that New Zealand’s economy is so open. Its rules have been fair, transparent, and predictable, and if the Government wants to change or break the rules, it should be brave enough to do so quite openly. But it has not done that.

To come back to the major users, have they not been sucked in? They have been pulled along by Dr Cullen, who has kept saying to them that the Government will do this deal. [Interruption] The senior Labour whip makes the point that the Government has done this for political reasons. We have a $200 million bill in order to try to prove a point about what happened in 1991. The Government has now allowed Tranz Rail a monopoly use of the line. The major users thought that they were to have a deal that would bring—[Interruption]. I raise a point of order, Mr Speaker. There has been a constant barrage of interjections. It has not stopped, and you have not moved to make sure that the interjections are rare, witty, and to the point. I suggest that you do so.

The ASSISTANT SPEAKER (Hon Clem Simich): I thank the Hon Bill English. Interjections have been coming far too often, and I ask members to please tone it down.

The major users are in the position where they have pushed the Government to the trough, and now that they have found the Government will not let anyone else get in it, they will be upset. However, the major users cannot say they were not warned, because dealing with Dr Cullen is pretty difficult and unpredictable, as Singapore Airlines and Toll Holdings have found out. Dr Cullen thinks he knows more about commercial deals than anyone else in New Zealand. He thinks that he is much more knowledgeable than Singapore Airlines, and that Toll Holdings is just hopeless—it does not understand how the world works. Toll Holdings just runs a huge transport business, so how would it possibly know what it is doing?

The major users need to understand that whatever rules the Government now signs up to cannot be guaranteed. This Government will be the owner of this railway for only a couple of years, and the rules will certainly change. We do not believe in an indirect subsidy from the taxpayer to one particular commercial operator in New Zealand. I hope that the major users will salvage something out of this deal if they can get competition on the tracks, but I suspect they will not, because Dr Cullen has already said there will be a 60-year monopoly for Tranz Rail.

We now run the risk of the worst possible outcome. The Government owns the tracks, and my guess is that it will be as efficient in doing that as it was last time it owned them. A monopoly with a guarantee will be operating on the tracks and, worse than that, there will be a guaranteed taxpayer subsidy to ensure that the operator makes a profit. Which other business or shareholders in New Zealand enjoy that privilege? Why has Dr Cullen said that he will set the access fee in such a way that it guarantees the operator a return on capital? What kind of left-wing idiocy is that? The Government is to set up a monopoly, guarantee it a profit, and then send a bill for $200 million to the taxpayer—boy, that is smart! That is this deal. But at least the bill is smaller than that for Air New Zealand, which was $1 billion.

Let us get this clear: the Government is making a deal whereby the taxpayer will subsidise rail freight, and Dr Cullen will take all the responsibility for maintaining the tracks, and who knows what that will cost? At least the Government has owned up to that; it has no idea what that will cost. Only one operator will ever be allowed on the tracks, because the thresholds are so low for volumes that competition will never happen, and the one operator will be guaranteed a profit. This Government cannot say “profit” without spitting. It regards any profit as an ill-gotten rip-off of the customer, and it has decided to guarantee the profit—

💬 Gerry Brownlee: Unless you’re Taito Phillip Field.

—Unless, of course, one is Taito Phillip Field. This is another step down the track for a Government that is increasingly showing its left-wing colours. It now has majority ownership of the electricity industry, and total control of it. It now owns the national airline and has total control over that, because it makes the rules as well as owning the airline. It is now making the rules for the railway and intends to own Tranz Rail, as well. The Government has a mess in its roading legislation, which it will never get through in order to solve that problem. Those industries are the lifeblood of the economy, and the sclerosis that is building up in them is entirely the fault of a Labour Government that thinks it knows better than everybody else. Dr Cullen is the expert on mergers, on takeovers, and on running large companies!

That speech certainly breathed new life into the “Gerry for leader” campaign. He was sitting there purring away, and I watched him as he sat there, asking himself how he could make himself look more like Kim Beazley than he does at the present time, and put himself in for the leadership spill.

Just occasionally, the National Party can connect with the deep, dark souls of New Zealanders. When National gets on to race and crime, it can suddenly connect with the majority of New Zealanders. But what it can never do is to connect with the hopes and aspirations of the majority of New Zealanders. What did that speech say? It said that this Government is so bad that it has the majority of Parliament, the business community, the trade unions, the major rail users, and local government on its side, and that National will stand against them. That comes from the brave National Party, which is sort of like Horatio—not standing on the bridge, but dropping a bomb on the middle of the bridge while it is standing there. That is Mr English’s approach to nearly all major public issues.

The public wants the rail track to be put back in public ownership. It wants a stronger New Zealand rail system. Mr English says no to that, but then, of course, he did not tell us what his policy was. His policy was to keep as quiet as possible, as it is with regard to most issues. On Iraq, he was for the war and now he is against the peace, unlike most New Zealanders, who were against the war and are for the peace. Mr English decided to be on the other side of that issue, as well. He said we will create uncertainty, and gave one example of uncertainty, saying this Government has invented an electricity commission. Does he know what that commission is? It is the Crown electricity governance board provided for in the Electricity Act, and it was provided for in case we did not receive support for an industry governance board. What did the industry say? It said it did not want an industry governance board, so what did we get? We got a Crown governance board called the Electricity Commission. That is all a surprise to Mr English, who apparently went to sleep some time before Coalcorp changed its name, and has recently woken up to a whole new world that he has never seen before. He does not know that Air New Zealand is making bigger profits now than it has made for some years, thanks to an 83 percent ownership by the Government.

Mr English wants to swap the present ineffective and inefficient rail system for another ineffective and inefficient system, preferably owned by an overseas company, whichever company that may be. That is the National Party’s policy. On the Takeovers Code, Mr English asks what we will do when we require a waiver. The New Zealand Herald stated that we require a waiver, so for Mr English that must be true. I ask Mr English to please read the legislation. Takeovers require a waiver when one is buying shares; we are not doing that. There is a rights issue occurring here, and, just as was the case with Air New Zealand, we do not need a waiver from the requirements of the Takeovers Code. I ask Mr English to try to keep up just a bit with what is going on in New Zealand at the present time.

So we come to what has actually been going on here. What we really have is a story that shows that, no matter what the circumstances, privatisation is always carried out as a religious belief and not as an economic policy. When National privatised New Zealand Rail in 1993 it was told to keep the track, and it said no, it would not do that. It wanted to sell the lot and get out as fast as it could. That has always been Richard Prebble’s policy on railways, as well. Richard Prebble wanted to save rail, so that the purchasers could save him in a number of different ways in the future. In the end, the railways are a crucial part of New Zealand’s infrastructure, and they are too important to be allowed to fail. How can we have a business that is not allowed to fail, and is supposedly operating according to present market disciplines?

Mr English said that Tranz Rail will still have a monopoly, and that that is bad. But National sold the railways as a monopoly. National sold the railways as a monopoly and said that as long as Tranz Rail ran one train down a line a year, that line was still operating, and even if it took that one train off, it had 90 days to find another operator, or the tracks could be pulled up. Mr English wants the present offer by Toll Holdings to succeed. Under the present offer, Toll Holdings would take over Tranz Rail with the present conditions applying—an absolute monopoly operation on the part of Tranz Rail. Mr English is very silent now. He is not chipping away quite so volubly now, is he? The previous National Government should never have done what it did. It should never have sold the track, and there should have been better performance measures. It is clear that what happened in that case is that the beneficiaries of the original sale made their millions of dollars, gutted the company, and cleared off—and they are now living overseas and moaning about New Zealand tax rates, just to kind of rub it in, in terms of what they did to this country by raping and pillaging the company.

We have seen Tranz Rail over recent times go into a clear, continuous, downward spiral, and when a company has Air New Zealand charging it cash to buy its airline tickets, then the word is out there that that company is in some degree of deep doo-doo. But of course, Mr Prebble tells us Tranz Rail was maintaining a cash surplus. Oh yes, but it was doing that by not putting any money back into the business, as far as possible, and by not paying the bills. Most of us can make a cash surplus for a while if we do not pay our bills, but sooner or later we cannot keep that particular trick up. Not even Mr Prebble, with the help of whoever may be helping him in those respects, can do that.

We have been seeking a viable solution for some months. We have been talking to a variety of partners about how to take over Tranz Rail, split off the track for Government ownership—which is why I gave the answer to Mr Brown that I did some few weeks ago, which he was a bit shattered about and could not quite understand what I was saying, but I was being very accurate in my answers—and seek to see new operators in there, if at all possible. On 6 May Tranz Rail approached the Government, saying it needed help because it was in serious trouble. The Opposition says we should have just let Tranz Rail fall over, and then picked up the pieces. Why would we have picked up the pieces? Why would someone else not have picked up the pieces in that situation? That is about as daft an idea, I say to Mr Brown, as the Government going on to the open market at 30c a share and bidding 30c a share for a 100 percent buy-up. What did Mr Brown think would have happened to the share price in that situation, if the Government’s chequebook was open, and it was telling people to hit it and hit it until it finally gave up and went away from that particular bid? That was never an option for the Government to adopt in respect of Tranz Rail.

We were also intensely worried about New Zealand’s reputation overseas. Members can fancy what would happen if the reputation got out that we had waited for a private company to go into receivership, in order to step in and pick up the pieces, and that that was the approach the New Zealand Government took to investment within New Zealand. So on 6 May we began talks with officials. Those talks took some time to proceed to a state of near-definition and conclusion. That occurred during the last week, though the details were still being settled as late as late Friday morning around some key issues in relation to the deal. In the meantime, RailAmerica came and went. My advisers were not surprised that it went. We believed that at 75c a share, RailAmerica would be off as soon as it looked at Tranz Rail’s books—and it was.

A funny person from somewhere wrote in to the New Zealand Herald and said that Tranz Rail was worth $3 a share. I wish that person had put his or her money in at that price. I very much doubt that it would have happened, but if it had, that person would very quickly have become very poor indeed. Of course, it could have been a National Party electorate chairman who would have put in $3 a share. I am sure John Key would not have done that. On the Opposition side of the Chamber he has some financial nous—unlike National’s present finance spokesperson, I might say, on some key issues.

So those negotiations with Tranz Rail commenced. RailAmerica came and went, and Toll Holdings came. Toll Holdings came to my office and we said to its representatives—I was as clear as I could be, because we could not tell them the nature of the deal we were engaged in without being in breach of the legislation—that what they were planning to do and what we were talking about doing were on a collision course. Those were my words: “a collision course”. We went through a number of other issues, and as the Toll Holdings representatives went out the door I said to my officials that they should talk to Toll Holdings about a possible joint approach that had been signalled in our previous discussions. That joint approach was that Toll Holdings would withdraw its offer, we would see some negotiations, and we would talk about a joint approach.

I do not know why Mr Little is amazed that the Government went ahead, when Toll Holdings said to the Government that it was not interested in doing that because it wanted to take over the whole company, and to talk to us afterwards. But that is what happened, and I have a number of witnesses on that point. Mr Little was not in any of the rooms, so he is either telling fibs or he is just not in control of his own company, and his own negotiators who came over here to talk about that particular matter are not reporting back to him.

💬 Hon Richard Prebble: What are you saying?

Mr Little said he was amazed that the Government had actually put an offer in. We made it pretty clear on Tuesday that an offer was to go ahead. Then he said that Toll Holdings would have been interested in talking about the Government owning the track, and asked why we had not talked about that before. We were talking about that before, but Toll Holdings wanted to take full control under the present operating conditions and present lease that National signed, and then to negotiate with the Government from a position of extreme strength. Why on earth should the Government ever stand by and let that happen?

This deal that we offer is much better for shareholders than the Toll Holdings deal. There is much more possibility of the share price going up, which is one of the main reasons that the Government decided to take an equity stake. If there is an increase in the share as a result of recapitalisation, the taxpayer will gain some benefit from that, and the entire benefit will not go to the current shareholders. They will receive the majority of the benefit, but the Government will share in that benefit. The Government has said that it is not necessarily a long-term shareholder in the operating company. It does not want to be. When and if we receive a decent approach and offer, we will consider it. The Opposition members would sell out to the first little overseas fairy that passed by, fluffing her wings at them. They would sell out straight away, and say that was the appropriate approach.

💬 Hon Bill English: So it is for sale.

I do not know why the member is going on about that. I said that on Friday. If Mr English had bothered to have someone at the press conference, he could have found out what was being said, instead of going through his usual “Mr Grumpy”, “Mr Angry”, and “Mr Shock-and-Horror” performance that he puts on day after day in this House. Today Mr English has discovered there is no Coalcorp, and he has discovered the nature of the securities and takeovers legislation. The world is his oyster to discover, as he stumbles on through life towards his future retirement as the ex-leader of the National Party.

This is a good deal for New Zealand. This deal offers the real chance to restore rail as a central part of our land transport system. I look forward to this deal proceeding. I hope Tranz Rail’s shareholders approve it. If they do not, I believe they will be making a mistake. When and if they do approve it, we will proceed from there to operate the tracks more effectively and to restore them to a workable situation. I say to Mr Prebble that it is hard to estimate the total cost of that, but we know that the present infrastructure is running down badly. We look forward to working with whoever is involved to ensure a strong, efficient operating company dedicated to improving rail in New Zealand. And the National Party is opposed to all that.

I concur with much of what Dr Cullen said there, but he has had a road to Damascus experience. He answered a question in this House only a few weeks ago, indicating that he did not care if Tranz Rail were sold. He did not care if it were split up asset by asset, with a part of the rail track going here and a part going there. Relatively overnight, it appears that he has had a change of heart.

New Zealand First supports the establishment of a rail track company. We have been saying that for years. An efficient railway service is an absolutely essential need for New Zealand. New Zealanders want to see some of the cargo traffic—logs, containers, what have you—moved from roads to rail.

Dr Cullen did not touch on that, and I will be listening with interest to hear the Minister of Transport tell us exactly how that will be done. We do object, though, to setting up Tranz Rail with exclusive rights to operate for 67 years. That is wrong. This Government does not have to give Tranz Rail exclusive monopoly rights. It can set the system up so that the rail track company is a State-owned enterprise, and the lines are open for any operator to run a railway service—be it for passengers or freight. The system does not have to be exclusively the domain of Tranz Rail. That is a major concern for New Zealand First.

We support the taxpayer having to put money into bringing the maintenance of rail tracks up to standard. From the information we have been given, we believe that the way the tracks have been handled since they were privatised is an absolute disgrace. We were opposed in the first instance to the privatisation and selling of the railway company, and that opposition is on record. At that time, we were represented in the House by only the Rt Hon Winston Peters, but he made the views of New Zealand First known when what was New Zealand Rail Ltd was sold to a Fay Richwhite consortium. The Minister has announced that $100 million will be available over 5 years to bring rail tracks up to speed. We do not believe that will be enough, and we do not believe it will be enough in the short term. Twenty million dollars a year will not go terribly far. That is the information we have, and I would be interested in the Minister of Transport’s response to that position.

New Zealand First believes that any money the taxpayer puts into this arrangement must be tracked transparently. By that I mean that some of the money going into the consolidated account from petrol motorists, in particular, should be identified as being the subsidy to bring the rail track network up to scratch. We have major concerns about just ploughing money in and not recognising where it is coming from, or who is paying.

This Government has made strong statements about having an integrated transport policy. This is but a wee start in that direction, and it seems to us to be a somewhat knee-jerk reaction. I give this Minister of Transport some credence. I have listened to him when he has spoken in the House, and I believe that he is quite sincere in what he wants to do. But that does not come across in an organised fashion. It does not register with me as being organised. One minute the Minister is totally dismissing the purchase of Tranz Rail track, or whatever, and the next minute he is buying 35 percent of the company and ownership of the whole track. New Zealand First believes that transport in this country has been treated poorly, politically-wise, for many years, and I was hoping that when Paul Swain got the Minister’s job he would be more upfront with all political parties that have a genuine interest in transport and transport-related issues—not just with the people he is in cahoots with. New Zealand First is certainly a party in that category.

Having listened intently to what Dr Cullen and the Minister said earlier on, I now want to know what the Minister will do about shipping. This is a subsidy for rail, but what will he do for the shipping industry? I am very keen, for a number of reasons, to know just how he will approach the shipping industry, because that industry is in trouble, just as the rail people are in trouble. I want to know whether he will move to cabotage, or look at a favourable fiscal regime—as he is doing for the rail track. I note that the Minister has taken a note of that, so I look forward to him giving us an answer along those lines.

Personally, I am an advocate of a favourable fiscal regime for shipping, rather than cabotage. Under cabotage, exporters all tend to pay more, but with a favourable fiscal regime they pay a modest amount whatever the ship, be it foreign or from New Zealand. If the Minister were interested in that line and wanted to ring-fence it so that it did not spread into other areas, then I am only too willing to give him some background assistance. I believe that this Tranz Rail purchase is setting a precedent for doing other things with other transport modes. Shipping is very important to us, and I hope the National Party recognises that also.

The history of the railways in this country is a sorry story. It was set up as a State-owned enterprise when Richard Prebble was the Minister. He actually did a good job and turned railways into a profit-bearing company for the first time in umpteen years. When it was turned into a State-owned enterprise, it made a profit for probably the first time in living memory. Then it was sold. It was a soft sale of $328 million, and I think the Government recognised that in its press release. But the ethics behind that sale were also questionable. Fay Richwhite and Co. acted as consultants, then one day they dropped their pens and pencils and became part of the purchasing team. I understand that the shares they got effectively for 16c a share, they sold for something like $3.60 a share. They made a mint out of New Zealand Rail, took their money, and left.

💬 Hon Harry Duynhoven: It’s called asset stripping.

That is the term I was looking for—and Tranz Rail has been effectively going downhill ever since.

New Zealand First believes that we need an efficient railway system. It believes strongly that we have to take some of the cargo that is moved around this country on the roads and put it on to rail. We will support the Government in any positive move it makes to achieve those aims. I will now listen intently to the Minister, and hope that he will give us some guidelines not only on that issue, but also some indication of what he will do for shipping.

I think it is appropriate that the House takes the unusual step of having a special debate, because this is a very significant decision that the Government has taken—to take over the rail track and invest in Tranz Rail. It means the Government is getting back into the rail business. I have no doubt that when the Government says that most people in business welcome this decision, that statement is probably correct. As members know, I have some transport interests, and I am sure that most transport interests actually welcome it. But speaking as leader of the ACT party, I still think the decision is wrong. I say that because it involves a lot of money. It is at least $250 million, and I think it will be a lot more. I will set out the reasons. Money cannot be spent twice. My priorities, frankly, are looking after people who want heart operations, or improving children’s education, rather than having the Government involved in the rail business.

💬 Peter Brown: Sometimes you have to invest to earn a bit more.

The member says that, but I want to make this point, too, which maybe the Minister of Finance did not follow: if one reads the statements that have been made by Tranz Rail—unless he is saying that the company is misleading the New Zealand Stock Exchange—they say that its tonnages are holding up, and that it is actually cash-positive.

So it is actually receiving enough money to keep going. Its problem is that it has a problem of capital and it has some leases coming due, and I have no doubt that it might not be able to meet them. But the point I am making is this: if one is a director in that situation and puts the company into receivership, what does the receiver do? If it is cash-positive, he or she continues to operate. I have no doubt at all that any receiver would have continued to operate Tranz Rail and then looked around for another operator. The Minister of Finance actually admitted that he thought that, because he asked the House whether we would be worried about it. The answer to that question is no, I would not.

Who would have lost in that circumstance? It would have been the shareholders. It might well be true that they would not have been the shareholders who took capital contributions out. When we look at it now, that was a mistake, but they bought those shares with their eyes open. It is not the duty of this House to bail out the shareholders of companies. I speak for the ACT party—and there is no one more pro-business than us—and say that that is not the role of the taxpayer. Yes, the shareholders might well have lost their shirts. So what! The next question is: would someone bid? We already know the answer to that question, because Toll Holdings has a bid in the market right at the moment, and we have had Rail America. In the event of a receivership, I have no doubt that other offers would have come forward.

Members might ask why I am objecting to the State owning the track. I will come back and say that I think the Government has done better than it could have, but it is for this reason: the demand for more money to be spent on that track will be very hard for the Government to resist. Why is that? The last thing one wants when one is a Minister is to have a rail crash, be questioned about safety, have some retired judge spend $1 million investigating it and then blaming the Minister. So the Minister finds it very hard, especially if an official says that there is an issue of safety involved.

The issue of continuous-welded railway tracks has been involved in arguments about buckling. I want to point out to the House that that was not done by Tranz Rail; it was done when the tracks were owned by the taxpayer. When I was the Minister of Railways, did we worry about the fact that the track buckled? No, we did not. To the best of my knowledge, no one has ever been killed in this country by the buckling of rail tracks. Some trains have run off the rails, but no one has been killed.

💬 Peter Brown: They slow the trains down.

If the member listens, he will learn something. Yes, Tranz Rail has now been required to slow down its trains. Why is that? A Government servant told it to do that. That civil servant did not have to bear any of the costs, but Tranz Rail has had to, and it is one of the reasons that it is in financial difficulties. Someone has probably been killed on the roads today because of the state of a road. Does a civil servant get up and say that every truck in New Zealand must now travel at 40 kilometres an hour because there are roads in New Zealand that in engineering terms are not safe? Of course not! But now that the Government owns the tracks, the civil servants will say to Mr Swain that all of that track must be upgraded immediately. He and I know that the Government has a “bottomless” pocket, and that the pressure on the Government to lift the standard of the track will be high.

The member who spoke previously put forward the view that we should open the track up to competing operators. I do not support that, because when I was the Minister of Railways, it was explained to me—and I realised it immediately—that there is an association between the operating company and the track. It basically goes like this: every 15 kilometres of speed doubles the cost of the track. If there are different operators, they will demand different sorts of services. For example, there are people who now want to run passenger trains in the South Island. Passengers love to go fast, but a container does not care whether it is going at 10 kilometres an hour or 60 kilometres an hour. One of the reasons that the track company in Britain—

💬 Peter Brown: The exporter does!

I did not interrupt the member, and I hope he does not interrupt me. One of the reasons that the track company in Britain has been a failure is that Virgin wants to run at 300 kilometres an hour, the track companies want to run at 60 kilometres an hour, and no one can work out how to allocate the costs. At least the Government has realised that it has to have one operator. At that point, one can at least agree on what sort of track costs there will be.

When I am praising this Government, I say to it: gee whiz, it is starting to learn. Last year it thought—against my advice—that the Auckland passenger track was worth $82 million. The advantage of that was that the regional council was going to pay $130 million. This year it has discovered that it can buy the whole country for $1. If the Government had just learnt from that and held on for 6 months, someone would probably have paid it to take the track. It shows that the payment last year cannot have been right, and I think that we will look back and say that the payment this year is not right. We will see a Cabinet that wants to spend money on heart operations and schools, but which has Government safety officers writing reports saying that the track is unsafe, so that any Minister knows that if there is a crash, he or she will be held personally accountable. That is why it is very difficult for the Crown when it owns the track. If we had allowed the private sector to own it, it would have worked out these matters, just as it would have worked out matters with regard to Air New Zealand. I am afraid that the Minister will find that it is a problem, and it is not good enough to say: “We are committed to buy this, and we don’t know how much it will cost.” I have no doubt in my mind that shareholders will accept this offer.

Let me make the point that we probably understand now why New Zealanders do not work well in Aussie, and why they do not work well here. If an Australian operator did not understand that in this country one cannot beat the Government, what did that operator think it was going to do? Does that operator not realise that we do not have a constitution, and that Parliament can do what it likes? No New Zealand company would even think of deciding to bid against the Government, and in that respect Mr Little has probably learnt a little bit about New Zealand, just as New Zealand operators do overseas.

I am pleased to hear the Government saying that it does not want to stay there very long. My worry is that there is nothing more permanent than a temporary arrangement.

It is just 2 years and 10 weeks since the Greens launched detailed proposals to get back the national rail network. In that respect we suggested that New Zealand track should be owned as a partnership between central and local government, that there should be no initial debt, and that the company should be required only to break even and maintain the network, not to make large profits, because rail is, after all, an essential service to all the rest of the economy, which depends on it. At the same time as we launched our package, the rail unions announced their campaign to take back the tracks.

For 2 years we have campaigned and constantly talked to the Government about this, and have been joined by many other groups in society. We have been joined by the major freight users, by the New Zealand Council of Trade Unions, by the Wellington Regional Council, by the Institution of Professional Engineers, and by the majority of the public. This is an idea whose time has truly come. At last a deal has been done. We welcome a good deal for the taxpayer and we congratulate the Government on taking a really important step towards a sustainable transport future.

It is 10 years since probably the most disastrous privatisation in New Zealand’s history. It was driven solely by ideology. It was driven by Ruth Richardson’s ideology, despite Treasury’s own warnings of the risks that the network would be run-down, and there would be more accidents, more congestion, and more pollution. Treasury urged the Government of 1993 to separate the tracks from the operations, as had been done successfully in some other countries, but the 1993 Government barged ahead regardless. It is about 10 years since I held a press conference at the Auckland Railway Station, along with the local rail unions, transport experts, and rail users, trying to explain to the media why this privatisation was so disastrous and why we must stop it. There was a big campaign in 1993.

I have to reflect on the role of Fay Richwhite and Co. Ltd at that time in negotiating the sale. It was an adviser for the sale until April 1993, which was 4 months into the sale process, and, as soon afterwards as July 1993, it took a 40 percent share in Tranz Rail; sharing ownership with Wisconsin Central Transportation. There was, supposedly, a Chinese wall between the two aspects of its operations—the sort of “Chinese wall” encouraged by the Government of the time. When those investors took over they systematically took capital out of the enterprise, restructured it financially, until there was not much left. In fact, it has been estimated that the three big investors, Fay, Richwhite, and Wisconsin, took out $370 million in profits—almost as much as they paid for it—and quit before the consequences of the run-down were apparent to the public.

What are the consequences of that run-down? These days it is very hard if one is taking photographs to find a logging train to photograph. The logs are on trucks. Logs are no longer transported through the Rimutaka Tunnel; they go over that appalling hill road on logging trucks. That is because Tranz Rail is not interested in carting logs, unless its customers own the wagons—unless the customer makes the capital investment and loads the wagons. Tranz Rail is closing sidings. It does not want to shunt and make up trains. The only thing that Tranz Rail seems to want to do is pick up already loaded and packed containers and haul them from one end of the country to the other, and let someone else do the rest.

Tranz Rail has been gradually closing down bits of its business, one after the other, for years. It has not invested in the tracks. We have buckling tracks all over the country, and trains going slower for safety reasons. We have disrupted travel—for example, passengers shunted off their holiday rail-trip on to buses. We have threats of closure of the Napier-Gisborne line, breaking a vital link in the whole network. We have had five passenger services closed, and the future of commuter services is in doubt.

The Government did have to step in at this stage, and we support it for doing so. Indeed, it had to step in earlier to secure a commuter service for Auckland, but if it had moved on the whole package 2 years ago, as we urged, it could probably have saved itself $81 million.

It is really clear from the speeches made in the last few minutes that the National Party has learnt nothing from the events of the last 10 years. Bill English is quite willing to leave the rail system to run down and close. However, I do want to pay some tribute to Richard Prebble. I do not very often agree with him, but I want to give credit where it is due. I shall quote from his statement made in 1993. “My view is that a country needs a rail system, and I don’t subscribe to the pure, rational economic theory that the market will secure it if there’s a place for it.” He said: “The real fear of privatisation is that new owners could just want to maximise profits and run the system into the ground.” Well, Richard Prebble had a lot of foresight at that time, because that is exactly what those owners did. But that was before he moved from being a Labour MP to being an ACT MP, and I commend the wisdom of his youth to him now.

So why does rail matter so much to New Zealand? Why is it different from other industries that simply make products? It matters because transport is a key to economic development. It is a key to social cohesion, and done wrongly it can have huge environmental impact. What happens when the rail service shrinks, let alone actually closes down? We get far more trucks on the road. That means more congestion in the cities and more crashes throughout the country. It means more time lost in driver frustration and danger on the roads. It means four times the energy use per tonne-kilometre of freight. That is a conservative estimate, and it is based on New Zealand statistics not international ones. Therefore, that means more greenhouse gases, worse air quality, and more noise.

What happens when commuter train services are threatened or closed? We get more cars on the roads—so more congestion, more energy use, more greenhouse gases, worse air quality, and more noise. What can we look forward to now? We look forward to $100 million of public investment, well spent, in fixing up the tracks. We look forward to the ability to run more trains faster over those tracks, when they are fixed. We look forward to the rebuilding of services. We look forward to fewer trucks on the road, less congestion in cities, less air pollution, and less danger on country roads.

We hope rail passenger services will be restarted by a company that actually wants to carry passengers, rather than wants to get rid of them. Of course it was not economic to carry on the passenger services that were closed; the company had never promoted them. The company did absolutely nothing to encourage people to use them. Those services were a wonderful tourist asset, but they were left to run down, and it is no surprise that they were then uneconomic and there was then a reason to close them. It is almost like we have had a company for years now that wanted to do itself out of business.

We hope the Wellington-Napier systems can be revived; we hope the Auckland, Tauranga, and Rotorua systems can be revived; we hope the deep-south trip can be revived—all as well-patronised services that will enable New Zealanders to travel without having to take their cars, and will enable overseas visitors to see the country from the comfort and convenience of a train.

The action of the Government in investing in rail—in taking back the track into New Zealand ownership and setting aside money to invest in the track and improve it—is a big step towards the safe, responsible, integrated, and sustainable land transport strategy that the Greens and the Government developed earlier this year. We face the challenge of turning round a planning system that was focused on more cars and trucks going faster, and instead developing the sustainable integrated solutions that the 21st century demands.

We look forward to cleaner air, less congestion, healthier children who are cycling and walking safely, and better local facilities in towns and in the country so that people have less need to travel. We look forward to revitalised rail and re-energised communities, and we look forward to real choice.

The Government’s announcement last Friday that it would buy a 35 percent stake in Tranz Rail for $76 million, after 10 years of that company operating as a private enterprise, should not have come as too great a surprise to many New Zealanders. The deal struck by National in 1993 has, for a long time, been the subject of much concern. If one was inclined to be kind, one could suggest that the Minister who negotiated that sale thought he was doing the right thing at the time and was getting a good return for the taxpayer. However, hindsight over the past 10 years inclines me, along with the vast majority of New Zealanders, to reach a rather different conclusion. The sale of New Zealand Rail, which can only be described as one based on mate’s rates, has seen one of New Zealand’s important strategic assets privatised, pillaged, and brought to the brink of receivership.

Why the original deal did not include a Kiwi share arrangement similar to the one included in the sale of Telecom and Air New Zealand, in order to protect assets that are vital to New Zealand being able to compete economically in the world, is a little hard to fathom. The leasing of the rail corridor for $1 a year had to be called the deal of the century, upstaged only by the Government’s announcement last week that it will buy the rail network and associated infrastructure for $1. United Future has long campaigned for the buying back of the rail corridor network in New Zealand. It should never have been given away in the first place, especially at such mate’s rates. In 1993, as a speaker said before, Tranz Rail Holdings bought New Zealand Rail for $328.3 million. The main shareholder stripped out $220.9 million of equity in 1993, and a further $100 million in 1995, according to analysts’ estimates.

As I said, while United Future has always seen the importance of maintaining the strategic asset of our rail network, it has never made sense for the Government to buy it back at a cleverly contrived market value that involves millions of dollars of taxpayers’ money going into Tranz Rail’s bank, and therefore potentially into shareholders’ pockets, instead of being invested in the infrastructure that has been left to run down over the past 10 years. When the Auckland rail corridor was purchased in December 2001 for $81 million, I think the New Zealand taxpayer would have seen a better return if that $81 million had instead been spent on upgrading the rail network in Auckland City.

While it is possible to share some sympathy for the New Zealand shareholders who bought into Tranz Rail at approximately $3.60 a share in February 2002, the best deal for New Zealand taxpayers and shareholders is one that will make sure that the long-term viability of our rail network is sustained. The Government’s plan to buy into Tranz Rail offers the opportunity for the taxpayer to benefit from an increase in the share value of the company in the future, rather than the taxpayer helping a company to improve its balance sheet so that only others can benefit from speculative investment. I am not sure whether I heard the Leader of the Opposition correctly when he spoke earlier, but I thought I heard him say that the National Party would support subsidies for a private company. That has to be a turn round for the books. The party whose mantra was that the Government should stay out of business is now suggesting taxpayer subsidies to businesses.

Rail has to be retained and maximised in this country in order to play its part in the overall transport strategy for both passenger and freight movement. Certain freight is best transported by rail, and its potential needs to be further expanded, but only after careful investigation and critical economic analysis. Some concerns have been reported with regard to the monopoly that Tranz Rail will have over freight services and the desire by some to see more than one operator delivering freight services on the network. While competition can be of value, it is important that it is not allowed at the risk of compromising any safety standards. Most of the New Zealand rail network is a single track, and unfortunately, like our State highway system, there are far too few passing lanes. It may take a number of years of investment in the network before multiple users can be practically envisaged.

It is important at this time in Tranz Rail’s rather difficult history that the current freight services are maintained and improved, and that community passenger services are improved in terms of efficiency and services. With regard to Tranz Rail’s exclusive use of the network for freight, we trust that in the “use it or lose it” clauses that there will be sufficient teeth to give a clear signal that Tranz Rail must provide an efficient and a cost-effective service for its freight customers.

United Future gives its support for the proposed deal for the reasons that I have outlined, but we want to make it clear that our support should not in any way be interpreted to indicate that we believe, as I think the Green Party does, that rail can be seen to solve our transport infrastructure problems on its own, and therefore replaces our need for an efficient and safe national highway system. We must be realistic. In today’s environment of cheap air travel and with the limitations of our population size, the idea that New Zealanders will patronise passenger rail services between cities in droves, or at least in sufficient numbers to guarantee the commercial viability of those services, is overly optimistic at best, and downright stupid at worst. There may be some opportunities where tourism routes are viable, but those will need close analysis. I believe most New Zealanders would prefer a safe dual highway that they can drive upon, and thus enjoy the individual freedom they have come to expect.

After the Government has stepped in to retain this important strategic asset, United Future now calls on the Government to give priority, both in legislation and in Budget allocations, to upgrading and developing our national highway infrastructure. It is now clear that the Government can find millions of dollars when it needs to address an emergency or a crisis of some sort. We urge that the Government acknowledge that our current road transport infrastructure is already in crisis, and it desperately needs not only attention to be given to legislation providing for alternative funding methods, as offered in the Land Transport Management Bill that is currently before the Transport and Industrial Relations Committee, but also the urgent investment of the revenue raised from petrol excise tax and road-user charges on the State highway system of this country. We need our rail system to play its part. The Government’s announcement and action will help to ensure that outcome. New Zealanders now await a similar response towards the congested and unsafe sections of our highways, so that the Government no longer wastes business revenue and taxpayers’ money by failing to show the same courage and determination to fix that problem, as well.

This is not a good deal for taxpayers. It might be a good deal for large users, because large users will receive a subsidy. Whether it is a good deal for large users will depend on the amount of subsidy they receive and the trade-off of that subsidy versus the right of competitive access that they so much wanted. It is ironic that this may be a good deal for shareholders. If the Government is to be believed, had this deal not gone ahead the company might well have gone into liquidation and the shareholders would have been exposed to the risk that they took by being shareholders. But the Government has effectively decided to try to bale them out. This is certainly a good deal for the Government in its sort of sneaky manipulation of the Greens. It can say to the Greens that it has bought rail for them, so therefore they can support it on some roading legislation. This deal will most certainly work to help the Government buy the Greens off.

However, for taxpayers to put $44 million into Tranz Rail now—that money is already sunk into the company—and for the Government then to say to them that it has sunk the money into the company and may or may not get a deal next month, and, if it does not, it hopes the company will pay it back, is a bad deal. For taxpayers to be exposed, by the Government’s reckoning, to $100 million worth of maintenance for the track is a bad deal. We know that before the deal was even signed, within hours of it being announced in a hotel in Wellington on Friday, the Government was saying that it accepted that $100 million might not be enough for the track maintenance. Extraordinarily, in question time in the House today the Minister said that he did not know how many bridges there were on the West Coast, and he did not know how much it would cost to keep that line open. At the end of the day, if the Minister wanted to keep a line open, he could always have done that through a subsidy. He did not need to own it.

I have heard the Green, United Future, and Labour MPs say that this deal is wonderful, and that we now own the rail corridor again. But we have always owned the rail corridor. We have always owned the land that the rail corridor was on, but we did not own the tracks. The Government has bought the tracks back, with all their maintenance problems, and it has no idea how much money will be spent on maintaining them over the next 5 years. But I predict one thing—

💬 Janet Mackey: The member is making that up.

Can the member for Gisborne tell me how much the Government will spend on that in the next 5 years? She does not know. How much maintenance will be required to keep the Gisborne line open? Does the member know that? The member does not know that, either. The member knows very little.

I want to say—[Interruption] I thank you, Madam Deputy Speaker, for your assistance in keeping interjections down, as usual, but we have given up on expecting that to be done.

I say to the House and to taxpayers that this is a bad deal for taxpayers. They will be exposed to payment of all the maintenance costs. Already we have Jim Anderton out there saying this deal is great, and the Government will keep the Gisborne line open. What a load of nonsense that is! The Gisborne line will be kept open only if the Crown subsidises the users of that line. That is what all the companies that use the Gisborne line are saying. So the Government is to subsidise the users, but the taxpayers will wear the cost of maintaining the track. That is a double-banger of a subsidy. The operator, whoever that may be, will operate in a risk-free environment. It looks as though the operator will be Tranz Rail. It certainly will not be Toll Holdings, because Dr Cullen is out there insulting it as though his life depends on that. So we know the operator will not be Toll Holdings.

The operator will operate in a risk-free environment, and if the operator wants to achieve a turn-round and put more goods on to a particular line, then the operator will just wind up the political pressure so as to try to keep that line open.

I say to the member from Gisborne, who is trying to interject, that she will be up there saying that this deal guarantees that people will use the line. I know the people in Gisborne who want their goods transported have said that they will not use the line unless it is more economic to do that than to use trucks. That is what the forestry operators are saying, and they will want a subsidy in order to use the line. That is why this is a bad deal for taxpayers. They will be sinking hundreds and hundreds of millions of dollars into the subsidisation of rail—money that will not be going into schools and hospitals, or into the many other infrastructural projects that we need around this country. The Government has to realise it can spend the money only once.

Not only is that the case, but we must ask what sort of deal this is. The Government will pay about $75 million for 35 percent of the company, and will have only three of the seven directors on the board. So the Government will not control the board, but will be exposed to 100 percent of the risk. This Government has decided that this is a really clever deal—after polling and deciding that New Zealanders overwhelmingly want the Government to own the rail corridor. And it does. That has always been the case, but New Zealanders thought the rail corridor was sold along with the tracks. The tracks were sold, but the corridor was not. So having done the polling, the Government has decided that the clever thing to do is to put $75 million in, to end up with a bit over one-third of the company but not with control of the board, and to end up with 100 percent of the risk—all the track maintenance, and all the subsidy costs. That is a very stupid deal.

On top of that, we have an operator that is ready to come in and operate on the tracks. What did the Government do to that operator? Well, the Government met it and then sort of did not tell it the full story. Then Dr Cullen “lost” it—he blew his “fufu valve”—just as we see in the House on a regular basis, except that this time he was sitting in his Napier house, at the weekend. His eyes became all bulgy, and the odd-coloured polo shirt he was wearing was nearly bursting open at the seams, when he launched into an attack on Toll Holdings and said there was no way that he would trust that company again. Well, actually, representatives of Toll Holdings came over here to New Zealand. They met with Dr Cullen and said they wanted to do a deal. He did not tell them the full story, and then he blew his “fufu valve” when they rightly said they did not know the Government would do this deal and that they would have been prepared to enter into some sort of partnership. But Dr Cullen just “lost” it. With that, he lost one potential operator for the track.

Now the only rail operator left is the current operator. This sounds really smart! The current operator—which has done such a good job, in the Government’s view, that it had to be bailed out—will now wear no risk. All the rail users will be entitled to subsidies, if they can put enough political pressure on the Government.

Poor old Roger Sowry! He is always on the wrong horse. His speech demonstrated that fact. First of all, he supports Bill English—wrong horse to be on. Secondly, he supported the war in Iraq, notwithstanding that the majority of New Zealanders were opposed to it. So, wrong horse to be on. Thirdly, he was opposed to the New Zealand Government engaging itself again with Air New Zealand, notwithstanding that the vast majority of New Zealanders supported that. So wrong horse again. Now he is opposed to the Government becoming involved again in New Zealand track—that is, sorting out the mess that the National Government left. But the vast majority of people support that move. So wrong horse again. When we put our finger on the National Party pulse, we see there is none.

Bill English is just reiterating the line taken by Ruth Richardson and the National Party about the sale of rail in 1993. This is what Ruth Richardson said, on 21 July 1993: “I welcome the opportunity to promote the merits of the sale of the rail company. I welcome the substance of the sale. It is good for our railways. It is good for growth. It is good for the export sector. It is good for the workforce, and it is good for New Zealand.” That was Ruth Richardson. She said, and here was the coup de grâce—with the orchestra playing behind her, in the pink tracksuit she used to run around Evans Bay in—“I predict a very successful contribution from Wisconsin Central Transportation to the New Zealand economy.” But what an absolute dog we have been left with. So the National Party has not changed its spots at all.

I have not heard one word about what the National Party would do. I ask Roger Sowry whether a National Government would then flog rail again?

💬 Hon Roger Sowry: Yes.

Right, OK. So it would flog the tracks again?

💬 Hon Roger Sowry: We’ll see.

Would Mr Sowry sell the tracks?

💬 Hon Roger Sowry: Wait and see.

Wait and see! That is National’s policy—stick a finger in the air, and wait and see. Then it wonders why it is about 20 percent in the polls. National cannot make up its mind. It wants to wait and see. That attitude summarises the entire National Party policy programme at the moment.

National members should hang their heads in shame with regard to rail. They turned it into a fiasco and a mess, not only for this Government but for New Zealanders in general. If those members had a modicum of decency they would personally apologise to New Zealand for what they did. But I know they will not do that, because they do not have a modicum of decency in their bones.

Speaking as Minister of Transport, I am very pleased with the deal. We did get the tracks back for a dollar and we have committed ourselves to $100 million of investment in the tracks over the next 5 years. What it means, finally, is that we can implement a national transport strategy.We have not been able to do that with one hand tied behind our backs, and without the rail infrastructure. We want a multimodel transport strategy where we can look at shifting freight in different modes.

Mr Brown raised the issue of sea transport, and that is an important part of our transport strategy. New Zealand needs a robust New Zealand shipping industry. There was a review, and I think it is fair to say that we have ruled out the taxation issue, even though that member thinks it is a good idea. This is the question we have to answer: if we want to do it for shipping, why not for every other industry? The review was divided on cabotage. The exporters did not want it. The shipping industry wanted it. So all I can say to that member is that I am currently working on all the policy options here, and I will be making announcements about that in due course.

I say again that this is a good deal not only for New Zealand but for New Zealanders. Finally we get the tracks back. We can start to remove more freight and more cars off our roads and on to rail. It is a good deal for New Zealand, but this is a sad, sad day for the National Party.

I am so glad to be following Paul Swain and not Bill English, because I feel like I am at a party. I feel like I want to celebrate what has happened. If I went with Mr English, after hearing him and Roger Sowry I would be singing: “It’s my party but I’ll cry if I want to.” New Zealanders are actually out celebrating. On Friday I was discussing community safety—and the audience, of course, was upholding the Government’s record on community safety as I was speaking to them. But when I got the news that we had re-entered the rail business, that we had the tracks back for New Zealanders, and that we had a sensible joint-venture approach to running rail, the audience broke into enormous cheers. National members should listen to that because it is a decade since they did what they did, and that is part of the reason that the nail has been driven into their coffin. They sold part of New Zealand, but not only did they sell it, they gave the cheapest deal and ensured that Michael Fay, David Richwhite, and others benefited, and that New Zealanders lost.

Did those people whom National members helped to a fortune then turn round and say: “Thank you, New Zealand.”? No. They gave New Zealand the fingers. They do not even live here. They do not trust our rail system to travel on. They travel on the European rail system because they have the money to do so, and they got that money from the people of New Zealand in a shoddy deal. People are celebrating, because the people of New Zealand can recognise a good deal. The National Party cannot.

That old song, “The Railroad Runs Through the Middle of the House” does not apply here; it runs only through the National Party benches, because the majority of the House support buying the railroad. My friend Paul Swain is also, thankfully, the Minister of Corrections, and he will find that when he goes out to the prisons, even there inmates will be singing in praise of buying the railroad. They love that song, “The Midnight Special Shines on Me”, because the “Midnight Special” represents freedom, and this is freedom for New Zealand. It is freedom to determine our future.

I am very proud that the Progressives are here on this day, because we, along with other parties who have said that they support the partial renationalisation of essential parts of the rail track to make sure that it can be part of the infrastructure of New Zealand, have been part of that process.

New Zealanders are not going to go around saying: “Which party is part of it? Which party is the one that should take the credit?”. They are going to say: “Which parties are still pouring cold water on this proposal?”. We will give the information to them—well, we do not have to give it to them, because it looks like Bill English is going to go out and parade it in the face of New Zealanders.

Little New Zealand children obviously know more about rail than do Bill English and the National Party, even if it is only from watching Thomas the Tank Engine and finding that we need happy staff to be able run a good railroad, and that we need happy engines to be part of a railroad, but that we need a rail track that is going to be there and not be ripped up. What National is asking us to do is to put New Zealand in jeopardy and continue a situation where, at any time that it was not profitable, the owner could allow for the tracks to be ripped up. Our reinvesting in rail guarantees that we will have a rail system that will be part of an integrated system. The decision to reinvest in rail will allow us, as a coalition Government, to ensure that there is an integrated transport approach that involves road, rail, and sea.

I can tell members who else is cheering: the people of Auckland. As I have gone down the road in Auckland looking for the rail station so I can get on a train when we finally get a decent rail system in Auckland, I have seen a photograph that scared the living daylights out of me. It was a photograph that, I am told, is of Bill English, and I only know it is Bill English because it has been doctored and the name is there underneath: “National”. He is telling me “Citizenship for all” or, I think, “One citizenship for all”.

💬 Hon Tony Ryall: One standard of citizenship for all.

He is saying: “One standard of citizenship for all”, but what we also want is one standard of rail for New Zealand that actually works. Aucklanders will want to see that, because at 7 o’clock in the morning until 7 o’clock at night the Auckland streets are jammed. Those people whom National is trying to win back, having been maltreated in Auckland, will be very interested to find that the parties that they are celebrating for taking back rail—Progressive and Labour—are being denigrated by National, as National says there is nothing to celebrate and that we have taken a backward step.

The debate having concluded, the motion lapsed.