Debate on Crown Entities, Public Organisations, and State Enterprises — New Zealand Railways Corporation

Last Thursday was a tragic day in Dunedin, and it was a tragic day for our skilled workforce in this nation. Last Thursday 41 skilled jobs were announced as being made redundant—41 skilled jobs in the critical area of manufacturing in this country, which is the bedrock of our workforce and the bedrock of our rail engineering business. Forty-one skilled jobs will go; 41 families will be affected; 41 incomes, and the tax paid, will be lost to the local economy, and that tax will be lost to the country. There will be 41 potential extra additions to the dole queue in Dunedin—and for what?

Steven Joyce said today, on behalf of the Prime Minister, that no analysis had been done by his Government of the lost income, the lost GST, and the extra cost of benefits caused by his Government’s decision to have these lay-offs. It is just extraordinary. Yet in the Budget a few weeks ago we heard from both the Prime Minister and the Minister of Finance that somehow, miraculously, 170,000 new jobs were going to be created in this economy over the next 4 years. When the Acting Minister for Economic Development was put on the spot about this last week in the Commerce Committee and was asked where those jobs are coming from and what analysis has been done by him or his department on what sectors the jobs would come from, the answer was that they had not done any analysis and they do not know. They just think it will happen.

Jobs have been lost in rail engineering and KiwiRail and mythical jobs are supposedly being created. Dunedin has been lied to. When the Minister of Transport, Steven Joyce, was asked last Thursday in this House about those KiwiRail job losses he said that KiwiRail must be able to operate without political interference, despite promising last May that there would be plenty of jobs for the workers at Hillside. This also directly contradicted KiwiRail’s chief executive officer, Jim Quinn, who has been consistently saying that he has to take that narrow commercial focus because of Government policy.

So somebody is not telling the truth here. Either it is Government policy that KiwiRail takes a narrow commercial approach and is not interested in the economic flow-on effects to the local economy of investing taxpayers’ money in those jobs and in that industry, or it is not. It makes a mockery of the attempts in Dunedin for the last 18 months by a group of committed people, including the Dunedin City Council, the Chamber of Commerce, the engineering cluster of nearly 70 firms in Dunedin, all of the MPs, the rail union, and KiwiRail itself—until it basically got gagged—to sit around the table and try to come up with a strong economic case for keeping work in Dunedin and for keeping rail engineering business in this country. It is a mockery.

What has happened since those redundancies have been announced? The local National list MP has been strangely silent. He sat around that table. He said he was committed. He said he was taking the case to Wellington. Where is the evidence of that case being taken to Wellington? And where is the evidence that the Government is listening? There is no evidence, at all. It has been obvious for 2½ years that this Government is not committed to those workshops. It is not committed to the rail engineering business in this country, and wants to get rid of it, and will get rid of it. That is Government policy.

KiwiRail will not guarantee the future of the rail workshops. Instead, the Government has clearly signalled that there is no future for a rail engineering model that is about building and refurbishing our rolling stock. Any jobs that will remain will be maintenance and repair—probably not in Dunedin. Where is the local National Party member on this issue?

There is a bit of a double standard operating in this Government. The Government is willing to intervene when the interests of its corporate mates are at risk, but when it comes to protecting Kiwi jobs, the Government is totally and utterly absent and does not give a stuff about them. No better example exists than in the way the Government is treating KiwiRail. I speak as a resident of the Hutt Valley, where we have one of the two major rail workshops in the country, the Hutt Railway Workshops in Woburn.

The CHAIRPERSON (Lindsay Tisch): I remind the member that we are not talking about KiwiRail; we are talking about the Railways Corporation. Focus in on the Railways Corporation, not on KiwiRail.

I am happy to speak about the New Zealand Railways Corporation and the Government’s lack of commitment to rail in general in this country. In this year’s Budget, no relief was provided to rail. In fact, we in this country treat rail entirely differently from the way we treat roads. We put financial constraints on rail that we simply do not put on our roading system. That is one of the reasons why rail in this country is facing such a tough time. We have already seen lines being closed in provincial New Zealand because of this Government. The Stratford line has already been mothballed. The Napier to Gisborne line is at risk, as is the Auckland to Whangarei line and the northern Wairarapa line. They are all at risk under this Government, because this Government simply does not want to invest in rail.

It is quite happy to go out and provide corporate subsidies to the people it supports and who support the Government, but it is not willing to intervene to protect Kiwi jobs, to make sure that investment in infrastructure stays in New Zealand, and to make sure that we put that investment to good use. Rail provides an amazing opportunity to invest not only in New Zealand jobs but also in the future of the New Zealand workforce. We should be building trains locally here in New Zealand and using the opportunity of building those trains to train the future workforce of this country.

💬 Clare Curran: Look at him laughing. You think it’s a joke.

I know that Wayne Mapp thinks it is hilarious that New Zealand would actually back New Zealand workers and New Zealand jobs. I know that is a point of humour for the National Government, because it does not believe in doing that. The Government would much rather have those jobs exported off to China rather than invest in buying locally and in supporting the local economy.

I will talk about the fact that the rail system is vital to our economic future as a country. We cannot have every piece of freight on the road, and we cannot simply restrict ourselves to the main trunk line, which is what this Government wants to do. The main trunk line through the centre of the North Island and the interisland ferries are all this Government is interested in supporting. I think we need a more comprehensive vision for rail than that. New Zealand’s engineering and manufacturing expertise is being lost because of the lack of vision by this Government.

New Zealand should do what other successful economies do. Other successful economies around the world back themselves and their own workers, and they use the power of Government procurement for the benefit of their own countries and their own economies. Why are we in New Zealand not willing to do that? Why is this Government not willing to back Kiwi workers and the Kiwi economy? It is purely ideological. The Government is willing to put our laws and regulations up for sale for its corporate mates Warner Bros and Skycity. It is willing to do that for the film industry and the gambling industry, but it is not willing to back the rail workers in this country. Frankly, that is disgraceful. New Zealand workers should be given a fair go.

I do not think we should be exporting jobs offshore. It is time to say that enough is enough. We hold ourselves up as this virtuous country because we simply will not take any steps to protect New Zealand jobs. That is not good enough. We should start in the rail industry by protecting the workers at Hillside and Woburn and by building locally the new trains and wagons that are needed. We have the skilled workforce here in New Zealand. Our workshops can compete if they are given the opportunity to compete. It can be an economically successful option. This Government is simply not willing to consider that. It is willing to intervene for Warner Bros and to prop up Skycity, but it is not willing to do anything to protect the jobs in the rail industry in this country. That is a disgrace.

I am very happy to take a call in this debate on the financial review of the New Zealand Railways Corporation. I start by commenting that I found it quite interesting that two fiery and seemingly impassioned speeches have just been made by Labour members, but when the Finance and Expenditure Committee looked at the financial review of the New Zealand Railways Corporation—

💬 Hon Nathan Guy: What did they say?

—the Labour members of the committee said they had no matters to bring to the attention of the committee. Is that not interesting? They could not be bothered reviewing the New Zealand Railways Corporation at the select committee, but now apparently all the evils of the world are being revealed and it is a tragedy that they have to debate and bring to the attention of the Committee.

The New Zealand Railways Corporation is the story of Labour’s economic delinquency. Michael Cullen, in his brilliance, paid $1 billion for an asset worth a mere $200 million. In that one sentence is a picture of exactly why we inherited this country in the mess that we did. Labour went out and paid $1 billion for an asset worth $200 million. That is the sort of economic management that Labour wants to take to the New Zealand public and say to them that they should get behind it. Well, that is not going to happen.

The National-led Government is committed to New Zealand rail. It is committed to turning round the broken asset that we inherited from the last Government. I can tell members that we are not going to do that by going back to the bad old days of subsidies and tariffs, when New Zealand was told that it was not good enough to compete on a global stage and that the only way it would get work was through subsidies. We say to New Zealand that we can compete. We have shown that time and time again. We can be the world’s best, but we are not necessarily going to be world leaders in every single area of manufacturing.

This Government has just seen the purchase of 20 new locomotives. Yes, they came out of China, but I can tell members this: they were on time, they were on budget, they are twice as powerful as the existing stock, they are quieter, they are more efficient, and they are the sort of railway stock that will turn this asset round. If that party had not destroyed the New Zealand economy, there would be more money to spend. As it is, we have to be very careful with our spend. We spent a quarter of a billion dollars in Budget 2010 on New Zealand Railways Corporation and a further quarter of a billion dollars in this Budget on New Zealand Railways Corporation.

We have made a massive commitment to the Auckland passenger rail system.

💬 Hon Nathan Guy: That’s right.

In my good friend the Hon Nathan Guy’s electorate, we are right now rolling out the electrification of the extension to Waikanae and double-tracking through that electorate. This Government is committed to rail and to turning round the New Zealand Railways Corporation into an asset that is of benefit to the New Zealand taxpayer. I can tell members that it certainly was not of benefit when we inherited it from the last Labour Government. But we will not go back to the days of subsidies and tariffs. If Labour wants to go out there and grandstand on going back to the bad old days of tariffs and subsidies and inefficient manufacturers, then I dare it to do that. I dare Labour members to stand up and say that they are proposing to go back to subsidising inefficient production and putting tariffs in place, when everyone who is a sensible thinker knows we are moving into a free-market economy where efficiencies and global competitiveness is what will lift this country’s production. It certainly is not the head-in-the-sand economic delinquency that we saw from the Labour Government for 9 years, which saw it pay $1 billion for a $200 million asset.

I will say one further thing in my contribution. I want to commend KiwiRail for the work it has done in my electorate to improve rail safety. It has installed lights and warning signals at several of the rural crossings in my electorate that have been of concern to me for some time. I have been discussing this with KiwiRail since I came in, in 2008. KiwiRail has listened and responded, and as I result I am very pleased that the people of Selwyn will be that much safer when they are crossing the tracks in rural parts of my electorate. KiwiRail is responsive and it is working to improve its services. I think this country can be increasingly proud of the rail system we have, and that is thanks to the hard work of Minister Joyce, Associate Minister Guy, and this National-led Government to turn round the asset of the New Zealand Railways Corporation.

I also commend the Transport and Industrial Relations Committee, which is ably chaired by my friend David Bennett, which considered this matter. I would have thought that if Labour was that concerned about these crocodile tears we are seeing, then the previous Government would not have overseen the signing off of the Matangi contract. Labour does not talk about that, does it? The previous Government signed a contract for the Matangi purchase to Korea—to Korea! It was not to New Zealand, but to Korea.

Report noted.

Accident Compensation Corporation