MMP’s biplanes will shoot down Jones’ King Kong

Infrastructure Minister Shane Jones describes NZ First's idea of moving the Auckland port to Northland as the 'King Kong' of projects but MMP's power for vested interests to block big, debt-funded public projects will shoot the idea down.

It almost seems like a real thing that might happen, until you scratch the surface and think about the vested interests and inherent bias in favour of the status quo built into our electoral system and public finances.

The Transport Ministry's Upper North Island Supply Chain Strategy working group issued its second interim report this week, which recommended the managed closure of the Ports of Auckland, the development of Northport and continued operation of the Port of Tauranga. It argued this would generate a two to one benefit to cost ratio, and that was before analysing the likely boosts to land prices in the various areas.

This scenario costing $8.6 billion also included development of the North Auckland Rail line and spur to Northport and a new inland freight hub in the Northwest of Auckland complementing Metroport in the South.

"It's arguably the epic infrastructure project of my generation and future generations."

A final report was lodged with the Government last month and Infrastructure Minister Shane Jones was particularly enthusiastic about the project, which NZ First has championed and was its preferred outcome of the ports study, which was set up as part of the coalition agreement with Labour.

"This report clearly outlines the direction of travel: the days of Auckland maintaining a port and continuing to encroach on the harbour, those days are over," Jones was reported by RNZ as saying.

"This is the King Kong of infrastructure projects - nigh on $10 billion. It will take some time but it gives substance to our Government's position that we are transformational. It's arguably the epic infrastructure project of my generation and future generations," he said.

Jones then made some sweeping statements suggesting the Auckland Council and the Ports of Auckland would just roll over and accept the move. 

"The city is being terrorised by congestion with the Ports of Auckland. The city's balance sheet is being terrorised because the Ports of Auckland can't even pay a dividend, and it is losing business every week to Tauranga," Jones said.

"The project, when I use the term 'King Kong', reflects the fact that it is colossal, it is epic, and it has the capacity to future-proof New Zealand's trading export relationship with the international shipping lines and the rest of the world."

Believe it when you see it

But it is still a long, long way from a thing that might actually happen. The vested interests in maintaining the status quo at Ports of Auckland, Auckland Council and Port of Tauranga are enormous, along with the potential delays with planning and resource consent, let alone who would pay for the infrastructure.

The councils in Northland are in no position to do it and the owners of Northport have conflicts up the wazoo.

The port at Marsden Point is half owned by the listed company Marsden Maritime Holdings and half owned by Port of Tauranga. Marsden is itself 53 percent owned by the Northland District Council and 20 percent owned by the Port of Auckland. 

Port of Tauranga CEO Mark Cairns is on the board and has already expressed doubt about the study's assumptions. He said this week there was plenty of room for Tauranga to handle the expected growth in containers. It's in Tauranga's interests to redirect Auckland's port business to Tauranga.

Then there's the Port of Auckland itself. It is no turkey that will vote for Christmas and neither is the Auckland Council, despite the apparent desires of some of the more well-heeled residents around Parnell and St Heliers to get rid of the glaring lights and truck traffic.

Turkeys avoid Christmas

The Port of Auckland would be able to block any Marsden moves to expand dramatically, as would the Port of Tauranga. And then there's the Auckland Council, which received a $51 million dividend last year from the port and has no intention of giving up its biggest cash-generating asset. 

The Government has no authority over the Auckland Council and does not contribute funds in a way to influence the council. New Zealand's central-heavy taxation system is great for taxpayers who want to avoid sharing funds with councils, but it means it also has little influence over their balance sheets.

Changing that is currently impossible.

The friend of the status quo

Our version of proportional representative democracy, MMP, makes changing the status quo even more difficult than the usual democratic disincentives, given it weaponises those with assets and incomes to block any changes other than just adding Government benefits to existing interest groups and demographics who vote. MMP plus the RMA and the obsession of ratepayers and taxpayers with rates freezes, tax cuts and debt limits makes any such large projects with various moving parts virtually impossible.

Moving assets or income from one area or group to another is just as difficult under this status quo-version of governance, except in the event of a crisis.

Any such move would also require a Government and the various interested parties to all line up in the same direction for decades. 

Our version of democracy with three year terms for councils and the Government that don't match up make that near to impossible.

And that's before addressing who would pay the $10 billion talked about by Jones and then own the assets.

The machine guns are cocked

Some shareholders, ratepayers, taxpayers and ratings agencies would have quite a lot to say about that.

Shane Jones talks a big game about his 'King Kong'. MMP and the structurally short-termist and dysfunctional nature of financial planning of Crown and council balance sheets mean nothing will happen any time soon, or at all.

The biplanes will shoot down King Kong every time. 

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