Stop trying to privatise our public transport Mr Joyce

Last week the Waikato Times ran a worrying article about a review of public transport effectiveness that the government is currently running.

There aren’t many details of the review publicly available yet but I’ve obtained this briefing from officials to the Hamilton Regional Land Transport committee about it. The briefing states that the Minister’s primary purpose in the review is to give more power over our public transport services to private bus/ferry companies and less to local government.

In particular, it’s alleged he wants to make it easier for private bus/ferry companies to “cherry pick” the most profitable, peak hour bus services and run them as fully commercial routes. On those routes the private bus companies will take 100% of the profit. Meanwhile, the council (and ratepayers) will be left to subsidize the less profitable off-peak, late night, and weekend services.

I think encouraging further privatisation of our public transport system is a really bad idea and I’m planning to write a whole series of blogs about why. But before I get started – has anybody noticed a common theme in the government’s work lately?

This review, along with the sacking of ECan and the creation of the Auckland CCOs, all point to a common desire to increase the power of big business and limit the power of local government  in NZ, particularly regional councils.

As an environmentalist, I find that frightening since regional councils so often act as the “environmental watchdog” for NZ.  What do you think? Is this government attacking the powers of local government? And, if so, is that a bad thing?

29 Comments Posted

  1. Owen,

    You still haven’t answered Jarbury’s question. If you simply don’t have an ON TOPIC reply, please say so and we can all then go about our lives.

  2. axle-ryde
    I have no idea what you mean by a corporate HOT lane.
    HOT lanes work and are highly efficient.
    You may have heard of HOV lanes which are available to vehicles that carry a certain number of people – with a minimum. So a bus or a taxi or a car with say three or more people can enter the HOV lane free of charge at any time. They can work but not as well as people hoped.
    However, the HOT lane is a lane that high occupancy vehicles can enter at any time free of charge (Say minimum four people) but so can any vehicle if it pays the toll which varies according to the loading.
    This means that as the loading approaches 2000 VPH the toll begins to rise rapidly because that is the loading that causes lockdown.
    So if you are desperate to get your sick child to the hospital you can pay to enter the HOT lane and be guaranteed of a max legal speed limit trip to the hospital or to the airport or whereever.
    This means one HOT lane is always operating at maximum efficiency and such a lane is more effective that a bus only lane or railway in whole of day performance.
    They are building HOT lanes all over the US – usually stacked over the existing motorway. They guarantee buses and shuttles and ambulances will not get stuck in traffic. The tolls are set by a computer algorithm not by politics.

  3. “In an intelligent system the “bus lane” would be a HOT lane with variable charges for access according to loading with high occupancy vehicles of any type having free access at any time.”

    Obviously the confusion set in when you tried to explain “variably charged free access”.

    Motorway saturation is a classic and beautiful example of real world constraints being exercised on ideological free-market ignorance. THERE IS NO MORE SPACE.

    Having a corporate “HOT lane” would just be yet more corporate welfare and a distorted solution. Doesn’t seem so intelligent to me.

    I would be more receptive of a “HOT lane” being considered when widley available public transport options are so numerous and accessible as to mean I’m not bothered by motorway politics.

  4. I do not leap to conclusions about people’s intellects or motives on the basis of a few isolated statistics.
    When looking at tables a key question must be “compared to what”?

    For example at a conference in Minneapolis I heard a Transport Research group from Italy present a paper that analysed the efficiency of public transport networks in Europe, including the UK, and found that while public transport market share had fallen across Europe over the last decades the fall in the UK was lower than in Europe. Much of this was attributed to the deregulation of the UK networks.

    There has been a HUGE uptake in private car use in Europe over these decades. They inherited great inter city highways and the EU open boundaries have created a massive increase in demand for inter EU trucking which has led to further upgrades of the highway network which improves overall vehicle mobility.
    The fall in public transport market share has been massive.

    The increase in bus use in inner London has much to do with the congestion charging which highly favours bus use. The deregulation at of the overall system means that buses are allowed to compete with the rail network and this has been to the benefit of both.

    I do not know of any metropolitan urban area in the developed world that has seen an increase in public transport market share over these decades although there may be some specific “route neighbourhoods” that have done so: the Northern CBD link over the bridge may be a probable example.

    And the bus lanes I was talking about were those new lanes alongside Motorways like the Northern bus lane which carries a half full bus about every 15 minutes and leaves millions of dollars of motorway lane unutilised. In an intelligent system the “bus lane” would be a HOT lane with variable charges for access according to loading with high occupancy vehicles of any type having free access at any time.
    This works and increases efficiency and promotes mobility.

  5. I heard someone on National Radio (whose name I’ve now forgotten) talking about the death of the GOP (Grand Old Party) in the States. Like many conservative parties it has been largely focused on less taxation, less public investment and a reliance on commercial markets and private provision of services. This model hasn’t really worked and there are no new ideas coming forward. The fact that Sarah Palin is still in strong leadership contention highlights a dearth of original ideas or depth of thinking. In the UK the Conservative Party has no clear platform any longer accept not being Labour and claiming to do similar things, but better. Conservative parties are relying more and more on emotive arguments that feed of urban myths and inuendo.

    The fact that amongst the most successful economies in the developed world, the ones that are the most stable economically (mainly in Scandinavia), have high levels of taxation and public spending (New Zealand is probably more similar to these countries than Australia, too).

    If you cut back on important infrastructure like public transport, railways, R&D and education etc then when there is an upturn in the world economy, the country is not in a good position to take advantage of it. This government is not planning for sustainable economic activity or strengthening infrastructure but looking for very short term gains by cutting spending in a mindless way and looking for instant, but unsustainable, returns in industries such as mining.

  6. “I seem to remember his positive up-beat terminology when polishing the marketing of several certain “roads of national significance” (is that “national”, or “National” – I can’t recall).”

    It couldn’t be big n national because five of the seven Roads of National Significance were on the cards under the last administration, and Transmission Gully had been debated for years. Only the Puhoi to Wellsford Motorway is new and even then, some improvement in that area had been planned for (the Warkworth Bypass).

    “and that involves privatisation.”

    What is wrong with privatisation? The manner in which it was done in the late 1980s and early 1990s was a poor one, but it was pretty difficult to list many of these companies on the NZSX given the lack of funding available at the time. If you look at Auckland Airport and Contact Energy, both of them have been reasonably successful privatisations.

    “Usually, they got bought back by the state once the private sector had bankrupted them”

    Kara, in the case of Air New Zealand, it was Jim Anderton and the Australians who bankrupted them – Jim Anderton wouldn’t let Singapore Airlines get a 49% stake in Air New Zealand because of fears that foreigners would take it over, in spite of the fact that it was already majority owned by foreigners (although the Brierley stake was held in a New Zealand based trust). In the case of the Australians, they were at fault because they reneged on an open-skies agreement the night before Air New Zealand was due to launch a subsidiary that was going to be based in Australia.

  7. It’s pretty simple, there should be no surprise, this government, along with Act, is a right-wing ideological administration, pushing all those monetarist dogmas that are working so well in the world economy at the moment. Absolutely nothing has been learnt from the economic and financial mess of the last two years, nor are they capable of learning. They are quacks, pushing a few pathetic and inadequate nostrums again and again, despite the evidence that the patient is rapidly expiring. But Labour was hardly any better, nor are they now, their opposition to all these reversals is pusillanimous and disordered, as they too are just about saturated with this same monetarist dogma, and certainly committed to perpetual growth as the solution to our societies’ needs, with not a glimmer of understanding that this is going to destroy us all.

    It is worth reading John Michael Greer’s (the Archdruid’s) latest post ( ), he is as usual a perceptive commentator of current affairs, and not only that, explores ways of looking at things that are not explored anywhere else – his theory is that our present economic and financial system and the belief that runs it, as with this administration, is a form of superstition, as he writes “Economics is our modern superstition – well, one of them, at any rate, and one of the most popular among the political class of today’s industrial societies.”

    What you are seeing with National and to a lesser extent with Labour, and what you are seeing in the UK and the USA and China, everywhere really, is a blind obedience to an outmoded and no longer relevant set of assumptions about the nature of our society, and you can’t get a bigger, or more wrong, misapprehension than that. John Michael Greer puts it like this “Like the Mayan elite at the beginning of what archeologists call the Terminal Classic period, our political classes are trying to meet unfamiliar problems with overfamiliar solutions. The results have not been good.”

    There is no arguing with people like National. As long as they are in power they will pursue this ideological course come hell or high water, and we will be stuck with it – we can only act as observers or, if motivated enough, take up some form of direct action to counter it.

  8. Owen, your question about taxis probably depends on the situation. Bus lanes are generally established to enable the road to operate more efficiently – in that it gives priority to vehicles that are carrying large numbers of passengers. A taxi carrying a passenger will obviously always have at least 2 people in the car, but compared to a bus with 50 people it’s not that much.

    In some situations it’s probably OK for a taxi to travel in a bus lane – if there’s only a bus coming every 5-10 minutes at peak time. But many bus lanes (Symonds Street, Fanshawe Street, Dominion Road, Albert St etc.) have many buses per minute along them at peak hour, and taxis would just congest the route.

    I take your silence on the substantive matter to be an agreement that Joyce is an idiot when it comes to the PTMA.

  9. Hilarious Owen cannot answer a single one of Jarbury’s questions and doesn’t even deny the corporate welfare going on…

    No rational person can really come to the conclusion that increase payment to Infratil while reducing service is a good idea, so they prattle on about taxis…

  10. Well of course but the private car is not accessible to the general public, although technology may be about to change that and then we shall have the best of all worlds.

  11. Owen wrote: “This is a source of confusion and why so many studies fail to recognise the major role that taxis and shuttles play in our public transport system.”

    If you defined private cars as being part of the public transport system, you would then find that they played an even bigger role 😉

  12. Kara
    But what does the word “public” in public transport actually mean?

    Accessible to the public, or subsidised by the public/
    This is a source of confusion and why so many studies fail to recognise the major role that taxis and shuttles play in our public transport system.
    In Auckland, since we deregulated taxi licenses, taxis now carry about 20 million rides per year – more than the rail network is projected to carry by 2030 and probably never will.
    In Sydney a medallion costs about $700,000 which means of course they are rationed and hence can afford to operate solely in the central area and left the outer suburbs bereft of the taxi service we are accustomed to.
    Why would a city which promotes public transport want to ration taxis? Or shuttles?
    Why wont the ARC allow taxis and shuttles to use the bus lanes?

  13. Owen, nobody is saying that the buses can’t be privately owned and operated. I absolutely have no problem with that, and the PTMA as it stands in no way stops the private ownership of public transport assets.

    It just makes sure the system as a whole can provide the best value for money possible. If cars didn’t have huge hidden subsidies (ratepayer contributions, environmental externalities, parking costs etc.) and competed against PT on an even level then perhaps it wouldn’t be necessary to subsidise public transport – in which case it wouldn’t be necessary for the public agency to make sure they got value for money from their investment.

    We don’t live in that world though. Which means that the general public does need to subsidise public transport, which means that we have the right to ensure we get best value for money from that investment….. and it is that which Joyce’s proposals undermine. There’s a reason Rodney Hide voted for the PTMA back in 2008, and that’s because he wanted the tax-payer/rate-payer to get value for money from their subsidies.

    Do you really think differently? Do you really think that it’s acceptable for Infratil/Stagecoach’s received subsidies to double over 3-4 years when bus patronage doesn’t increase, and ARTA be powerless to stop it?

  14. Ehmm, many airlines all over the world are actually national assets – including our very own Air NZ … Usually, they got bought back by the state once the private sector had bankrupted them. As for taxis and shuttle buses: as far as I know there’s no public money handed over to taxi or shuttle companies (other than maybe some small change for disabled transport), so this is a whole different ballgame.
    Owen: as you’d probably subscribe to “no taxation without representation” don’t you think that “no public funding without public say” would be the fair equivalent?

  15. (Can’t see where to log in on this page)
    NZ is rapidly becoming a fascist state. Mussolini anyone?

    [frog: the login is at the bottom of the page under Manage]

  16. Key the moneytrader thrived on being in at the kill – making money in the previous job, but now he’s in control of a whole country he can be in at the kill on so many levels:

    Killing whales
    Killing public transport
    Killing pay equity
    Killing rights for workers
    Killing endangered species by mining
    Killing – yep he’s got his boot on our throats, no doubt about it.

  17. I would accept Joyce’s position on changing the PTMA a bit more if he just came out and said that he wants to do it to kill off public transport so that people will use all these new motorways he wants to build in the next decade. I would accept it if he said that he wanted worse value for money in terms of public transport spending so that regional councils end up being bankrupted or fares end up being so high that nobody wants to use public transport.

    The annoying thing is that he doesn’t sell the changes like that. It is absolutely unequivocal that having commercial operators cherry pick the best routes is a recipe for disaster. It means that you end up with worse value for money from your investment in PT, it means that you can’t create a proper public transport network, it just undermines everything you’re trying to achieve.

    Under the system that Steven Joyce wants to return to, over the past ten years there has been a 250% increase in funding of public transport in Auckland, but only a 42% increase in its use. Funding of the bus companies has increased hugely with patronage staying relatively constant.

    If that’s not declining value for money I don’t know what is. Why does Joyce want to take us back there? Why does he want to flush so much regional and NZTA money down the toilet??????

  18. I totally agree that we need to get people voting who aren’t already, firstly because that has inherent value and secondly because they are the demographics – youth, beneficiaries, etc, who would typically vote green.

    more importantly though,
    when you said “I (and a lot of others) are in …” is that correct grammar? i mean if you were to say “I are in…” obviously that would be wrong, which is KINDA what you’re doing, however if you were to say “I (and a lot of others) am in” it also sounds inherently bad. Help?

  19. Drakula,

    Protesting is legitimate (at least it was last time I looked). Then there is illegitimate activity … but no one condones that do they?


    Or better still their grand children, lets face it the National Party only represent one thing and that is big business!

    They couldn’t give a damn about the environment or the welfare of the citizens of Aotearoa (New Naziland).

    I (and a lot of others) are in disagreement with the National on just about every issue, and that involves privatisation.

    Privatisation was not a traditional policy of National before the 90’s I think it is a policy that is applied (with much pressure)From the extreme right by lobbies such as the Business Round Table and ACT who represent the very worst aspects of the most predatory of corporations.

    We need to concentrate on how to get them out of government next election and replace them with a left coalition with more Green and Socialist Parties to check the balance of Labour. That involves a capaign to get people out to vote.

    Until then I don’t think there is a lot we could do or achieve that is legitimate. I would like someone to prove me wrong there!

  21. interesting how he’d react if roads were privatised during peak times – suddenly public transport would look a whole lot more appealing

  22. Among the many fails of our transport minister is his unashamed propagandist rhetoric.

    I seem to remember his positive up-beat terminology when polishing the marketing of several certain “roads of national significance” (is that “national”, or “National” – I can’t recall).

    But now, the first peep of a comment about rail in a long time, and already he is lambasting its cost effectiveness as a transport mode.

    Obviously he’s biased and has a hellbent agenda to destroy the case for rail while puffing up the limp positive’s for New Zealand’s over-dependance on personal vehicles and roading.

    Mr Joyce clearly revels in limiting his cost effective accounting techniques to not include the wider cost benefits between transport modes (which rail wins hands down!) – such as health and accidents, pollution, energy resources, physical footprint and stronger community.

    In his eyes, as long as the debate only focuses on ticket cost vs filling up on petrol, he’s happy. Widen the debate – if he’s forced to account for all the pro’s and con’s – he’ll loose sooner and he know’s it.

  23. Hooray Gareth, you haven’t been in Parliament long but have hit the ground running..!

    For those who are interested the way the system currently works on most Auckland routes is this:

    The ARC will organise a route which a company (mainly NZ Bus owned by Infratil) will then run, each run of the route will attract a subsidy, this subsidy is then suspended during peak times on most runs (as this is the only time most routes are profitable) and all the monies collected on this run then goes to Infratil..! If that wasn’t bad enough the ARC isn’t allowed access to financial information on these “profitable” runs due to company privacy laws, it is simply the worst case of corporate charity in NZ… ARC has been doing it’s best to get up PT in Auckland under deregulation, PT ridership in Auckland in the last decade has gone up 42% just above population grow but subsidies have gone up 250%..! This is one area the market doesn’t work as a network is needed and therefore is a natural monopoly…

    The Public Transport Management Act (PTMA) passed by Labour was one of the most progressive pieces of legislation of their whole 3 terms and now allows a single public agency to control routes, timetables, ticketing, livery etc and create a network the public will actually use as it can compete with the private car, the private sector is still used for what it does best (operations) as it can bid on a route tender to operate a service on a set timetable and recieve a fee for doing so (I believe Mt. Eden routes now operate this way) basically the Auckland Regional Transport Agency has been waiting for existing contracts to expire before moving to the new tendering system, known as gross contracting)…

    Until the PTMA we were one of only two countries (NZ and England, only outside of London) that operated a fully deregulated system… Which works better..? Well since English deregulation in 1986 we get the following table:

    Bus patronage in English Cities (millions)

    _________________London_______English metropolitan Counties
    Change(%) 86-96__+4.6%________-37.5%
    Change(%) 86-08__+81.4%_______-45.8%

    Even the bastian of the hard right winger, the WTO, has conceeded that deregulation failed and they advocate a single company should tender to run the entire network for a specified period of time (this doesn’t work too well either), quite simply, this policy, the governments farebox ratio policy, it’s desire to load Kiwirail with debt and it’s massive expansion of driving and trucking opportunities is set to fundamentally undermine PT and for a long time to come, it’s seems Steven Joyce is one of the few politicians worldwide that thinks this way, Aussie, the UK, and especially Canada are streaks ahead of us, even the US under Obama is making big strides, the NZ economy is in trouble if this continues too long…

    For more info if interested see:

  24. “We are rapidly seeing our democratic institutions being devolved into the power and control of a select few. The Listener does an annual assessment of the most influentual NZrs, it will be interesting to see who they are at the end of next year.”

    This is a repeat of a my comment on an earlier post. This is the resurgance of the “old boy network” where we are seeing lots of back scratching between the privileged elite of New Zealand. I am sure same names will keep reappearing as democratic bodies are devolved and debased as the corporate, business culture infiltrates everything.

    It will be interesting to see what Bill English targets as low quality spending in his budget and whether it will shift even more into the private sector.

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