Jul 2, 2008

Has National Been Nobbled By The Process?

John Armstrong looks at the implications of the rail purchase for National

Talk about rubbing salt into the wound.
The National Party was already furious with Labour for buying the rail network off Australian-owned Toll Holdings. It will now be doubly annoyed, although not surprised that one of its former leaders has accepted Labour's offer to chair KiwiRail, the new state-owned enterprise which will run the trains and Cook Strait ferries.
When negotiations between the Government and Toll bore fruit two months ago, National was convinced Labour had re-nationalised the railways largely out of political spite.
National believed Labour was deliberately leaving its rival with a nasty bill of hundreds of millions of dollars to fix the railways. National was quite happy with existing subsidy arrangements with Toll, thank you very much.
Labour had other reasons for buying back the network which stretched beyond leaving a fiscal headache for National, however.
These included satisfying its ideological-based desire to bring the "strategic asset" back under state ownership. Labour also wanted to integrate rail more effectively into the Government's land transport strategy for reasons of efficiency and to reduce greenhouse gas emissions.