National’s ferry plan sounds absolutely terrible. More expensive, badly organised, poorer outcomes. Initial indications are that they plan to spend nearly double the original price for smaller ferries. They seems to plan to justify this with “savings” on port infrastructure - these savings being primarily on the government balance sheet. The ports will be expected to build infrastructure improvements, and then charge users to recoup costs.
[#]NZPol
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This financial arrangement is going to be expensive. The government can print money to finance this, and has access to cheaper debt. The ports are likely going to have to go through commercial lenders, with less favourable terms. The ports will take on risk, and need to charge more to recoup their costs than the equivalent taxation to fund the government debt load - This will also be less flexible and more regressive.
[#]NZPol
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It is also highly questionable that large savings can be achieved by cutting back on ferry size - Ports facilities in both Wellington and Picton are nearing end-of-life. Much of the expense of iRex was for necessary work to replace outmoded infrastructure, and will need to be paid long term regardless of whether it is funded as part of the ferry replacement project.
[#]NZPol
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Ultimately, this project will likely deliver a worse and more expensive ferry service, at greater cost to the end user, with little prospect of real costs savings anywhere. The only “advantage” is it involves less government debt. But that’s only an advantage to a very narrow view of public finances - For the economy generally, private debt is much more concerning. The crown cannot default on NZD denominated debt - Centreport can.
[#]NZPol
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@janef0421 yeah I was wondering about how much savings there might be on port facilities, thanks for the reminder that they are end-of-life anyway. #nzpol
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@va2lam @janef0421
The other significant taxpayer cost being ignored by this government is with the ferries not being rail enabled an increase of thousands of additional heavy vehicles on SH1 required to move goods to and from the ports will blowout the price of maintaining NZ’s roading infrastructure, not to mention making roads less safe and efficient but also increasing carbon emissions.
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@jeremy_pm @janef0421 This government doesn't really think about that, but yes. #NZPol
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