OnPoint by Keith Ng

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OnPoint: Budget 2011: A Credible Path to a Point in Time

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  • George Darroch,

    On transport, it is so weird that Joyce’s roads of national stupidity aren’t being used to ridicule the govt at every opportunity.

    Every time the govt says it’s being prudent, where is the ridicule of the holiday highway or transmission gully: both of which have business cases that amount to flushing a billion bucks down the toilet.

    Or the govt’s next great transport priority: a motorway from Cambridge to Taupo. No I am not joking.

    Policy capture. Federated Farmers, the Road Transport Forum, and the small number of people that those in the National Party come from and associate with (East Coast Bays types).* They want a country with good roads that take them from one place to another - this is what is important to them. It is a disguised value judgement. There's nothing, absolutely nothing wrong with value judgments - we spend considerable sums on national parks that only indirectly add to gdp (through tourism) because we consider them important. But this one just slips right under the radar. I suspect it is because they are the same values that are held by those in the media.**

    A democracy, at least as it functions in New Zealand, is not a mirror, rather an interpretive guide.

    *I'm not saying that other parties are necessarily more widely composed, but Labour is rightly ridiculed when it pretends to have a wide spectrum, similarly the Greens. National is composed almost entirely of lawyers and farmers, and nobody blinks, let alone raises it as an issue.
    **Similarly, morally conservative viewpoints are not generally celebrated, despite being held by a wide section of society.

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • George Darroch,

    Interestingly, among advanced economies*, only the PIIGS, Norway and the UK had higher growth rates 1990 - 2007 (pretty chart and graph). Nothing was sustainable.

    We know what happened to Ireland et al. The UK had a boom in the city that is now slowly exhausting (and wreaking much pain on the rest), and Norway prudentially managed vast oil reserves.

    *(I exclude former Soviet bloc industrialised economies from the advanced economies category on the basis of where they were in 1990)

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • Sacha, in reply to David Haywood,

    I'm constantly gobsmacked that a bigger deal isn't made of this. How can the government be selling off strategic infrastructure in energy at the same time as taking full ownership of luxury-length roading

    For some reason the opposition parties have largely grasped this more slowly than smart folks like yourself. Full credit to Joshua and likeminded advocates for hoisting this matter into the light over a long period.

    For the Greens, Gareth Hughes seems to understand the matter but suffers from the party's overall comms/engagement weakness (which media attitudes play a large part in, admittedly).

    For Labour, Shane Jones has inherited the portfolio relatively recently but the main problem seems that the obvious political value of this issue seems to sail right over the heads of their woeful strategists and comms folk.

    And no one seems to be forcefully joining the dots between a digital future and the need for secure, sustainable and affordable energy.

    Ak • Since May 2008 • 19745 posts Report Reply

  • George Darroch,

    My point is that New Zealand's boom was fuelled not only by speculative investment from abroad (as Alistair noted upthread or elsewhere), but the Yen carry trade and inflationary bank lending. It couldn't last, but both Labour and National were happy to see it continue.

    I'm not as harsh on National in a comparative sense as some others, because I believe that their opposition took what they thought was the easy way of reforming the economy, rather than the hard business of structural change. (not that there would have been many cheerleaders for this, when they could point to Ireland and say we should have been copying them).

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • Sacha, in reply to George Darroch,

    Similarly, morally conservative viewpoints are not generally celebrated, despite being held by a wide section of society

    Good point - I'm recalling the handwringing surpise from the left when Bradford's anti-beating bill aroused such heavy dislike from many other New Zealanders (regardless of the politicking around it). Also people's tendency to think the Maori Party is firmly of the left.

    Ak • Since May 2008 • 19745 posts Report Reply

  • Sacha, in reply to David Haywood,

    If Steven Joyce absolutely insists on building unnecessary motorways then why doesn't he hand them over to the private sector to build them as toll roads?

    Oh he will. That's on top of the public's $11b investment which, like his broadband boondoggle, will underwrite any private sector risk.

    Ak • Since May 2008 • 19745 posts Report Reply

  • SteveH, in reply to Sacha,

    It simply won’t be an optional part of any modern economy. High-resolution videoconferencing and suchlike will be a standard part of working with other countries and with one another, across all parts of our economy and society.

    Much as I'd like faster Internet access, I'm still not sure there has been an economic case made for it. Is high-resolution video conferencing really going to bring money into the economy? And is it actually going to work given that we have a single 1.2Tbit/s pipe to the rest of the world? That's only 12,000 simultaneous 100Mbit/s streams. I would have liked to see some money go to addressing that situation. Pacific Fibre are looking for $400M USD...

    Since Sep 2009 • 444 posts Report Reply

  • Robert Urquhart,

    I saw a quote somewhere - maybe it was in a cartoon - a little while ago.

    The person who invents a thing, is not necessarily the same person who discovers it's use.

    Or something like that.
    The internet (and services built on it), especially enabled by broadband, has proven to be one of those things in spades. High resolution videoconferencing in and of itself isn't going to bring money in. But our best and brightest being able to collaborate in real time with their counterparts around the world - without having to leave NZ - that just might lead to something that does*. And not just in the tech sector.
    Something does have to be done about that pipe though ...

    Christchurch • Since Mar 2009 • 163 posts Report Reply

  • Matthew Poole, in reply to SteveH,

    Much as I’d like faster Internet access, I’m still not sure there has been an economic case made for it

    And if you go back a decade, for many businesses you could remove "faster" from that sentence and you'd be repeating statements/questions of the era.
    Many world-changing technologies have no real apparent utility when they are first established. Look at the infamous quote from a 60s-era CEO of IBM, who said that he didn't think there'd be a need for more than maybe five or six computers in the whole world.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Sacha, in reply to SteveH,

    Is high-resolution video conferencing really going to bring money into the economy?

    More like the lack of it will keep money away - and thwart other forms of success like better connected communities and extended families, reduced social isolation, stronger civic participation, etc.

    It's just one service example (and as others have noted we can't imagine all of them yet), but you can imagine the game-changing nature of having high enough resolution to substitute many face-to-face meetings and their associated travel expenses. Multiply that over the whole economy and society.

    And yes, having more than one pipe to the world would help.

    Ak • Since May 2008 • 19745 posts Report Reply

  • George Darroch,

    Look at the infamous quote from a 60s-era CEO of IBM, who said that he didn’t think there’d be a need for more than maybe five or six computers in the whole world.

    He was right.

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • SteveH, in reply to Robert Urquhart,

    "The person who invents a thing, is not necessarily the same person who discovers it’s use."

    The internet (and services built on it), especially enabled by broadband, has proven to be one of those things in spades.

    I see this sort argument a lot. "We don't know what use faster internet will have but we're sure something valuable will turn up". I don't buy it. It's not hard foresee the impact of higher bandwidth. People were dreaming of downloading music and video well before it was practical. People were trying to steam media and make video phones before the bandwidth was there. If there is a revolutionary application that requires massive bandwidth then why hasn't it appeared already in the places which have massive bandwidth?

    I realise you're talking more about indirect benefits, which are harder to point to. But FTTH is already available in many countries, so why haven't we been shown the economic impacts from those countries?

    As for collaboration, as someone who works from home in NZ for an office in Sydney I think it's pretty practical now, even with the ridiculous 1Mbit upload limitation of ADSL2+. Yes, more bandwidth would be nice, but I'm not convinced it's worth $1B of public money.

    Since Sep 2009 • 444 posts Report Reply

  • bmk, in reply to Kyle Matthews,

    All those people who sign up for kiwisaver are having the employer kick in. Those that aren’t get no kiwisaver benefit from their employer, but are going to get less pay rise as those employers spread the kiwisaver costs over their whole workforce.

    The lesson: sign up to kiwisaver if you’re not already.

    Except I know of two workplaces where staff not in Kiwisaver were given pay rises while those who were weren't because their employer told them they had got their pay rise through Kiwi Saver. This may not be legal but I think will become increasingly common. So my advice would be that if you don't sign up to Kiwisaver your employer is likely to look more favourably on giving you a pay rise.

    Since Jun 2010 • 327 posts Report Reply

  • bmk, in reply to Matthew Poole,

    This is a common problem with future technology. Standard cost-benefit analyses don't work as for example when the copper phone network was put in New Zealand fax machines, dial-up internet, broadband didn't even exist. And so these huge benefits wouldn't have shown up in a cost-benefit analysis.

    Since Jun 2010 • 327 posts Report Reply

  • Gareth Ward, in reply to bmk,

    This may not be legal

    It wasn't. Until National explicitly made it so (2009 I think?).
    That is exactly why the "employer/employee" split is crap - it's all employee so long as it's voluntary and they can consider "their" contribution to be your payrise.

    Auckland, NZ • Since Mar 2007 • 1727 posts Report Reply

  • Russell Brown, in reply to bmk,

    This is a common problem with future technology. Standard cost-benefit analyses don’t work as for example when the copper phone network was put in New Zealand fax machines, dial-up internet, broadband didn’t even exist. And so these huge benefits wouldn’t have shown up in a cost-benefit analysis.

    Hells yes.

    This a very good point. Telecom has generated billions of dollars in revenue since the early 90s from a copper network conceived and installed before the internet even existed. The Telecom SOE conducted an extraordinary upgrade before the privatisation, digitally connecting nearly every exchange in the country. We now have fibre to the cabinet, but it's still that copper to our houses that's the magic string. (It is, for one thing, Sky TV's backchannel from its users.)

    The thing has paid for itself, frankly.

    Auckland • Since Nov 2006 • 22850 posts Report Reply

  • Kumara Republic, in reply to George Darroch,

    Policy capture. Federated Farmers, the Road Transport Forum, and the small number of people that those in the National Party come from and associate with (East Coast Bays types).*

    I wonder if the romantic myth of the 'rugged individual' comes to mind? It still appeals to some, despite it having long passed its use by date. Sarah Palin somehow managed to put some shiny lip gloss on the proverbial pig.

    The southernmost capital … • Since Nov 2006 • 5446 posts Report Reply

  • Kumara Republic, in reply to Sacha,

    And yes, having more than one pipe to the world would help.

    PacFi have the right idea by circumventing the whole UFB mess - and they have Silicon Valley backing too.

    The southernmost capital … • Since Nov 2006 • 5446 posts Report Reply

  • Robert Urquhart, in reply to SteveH,

    If there is a revolutionary application that requires massive bandwidth then why hasn’t it appeared already in the places which have massive bandwidth?

    I realise you’re talking more about indirect benefits, which are harder to point to. But FTTH is already available in many countries, so why haven’t we been shown the economic impacts from those countries?

    Because the “killer app” isn’t actually the end product.

    It’s like you’re saying “If there is a revolutionary application that requires electricity then why hasn’t it appeared already in the places which have electricity.” Substitute “telephone” if you like.

    As for collaboration, as someone who works from home in NZ for an office in Sydney I think it’s pretty practical now, even with the ridiculous 1Mbit upload limitation of ADSL2+. Yes, more bandwidth would be nice, but I’m not convinced it’s worth $1B of public money.

    Good for you. Much of the country can only dream of being able to connect at your ‘ridiculous’ 1Mbit. That’s the issue the broadband rollout is supposed to address. That’s the opportunity it’s supposed to give everyone, to do what you are doing.

    Tell me, do you get paid the same (converted to $AU) as your counterparts across the ditch? If so, congratulations, you’re actually achieving what National has completely failed to, catching us up with Australia. That’s one example the power of high speed internet and international collaboration, letting people earn on an international payscale here in little old NZ.

    Christchurch • Since Mar 2009 • 163 posts Report Reply

  • Sacha, in reply to Robert Urquhart,

    Much of the country can only dream of being able to connect at your ‘ridiculous’ 1Mbit.

    Services like the aforementioned hi-res videoconferencing require fast uploading as well as downloading. It's a measure of how crap our networks have been that most people keep thinking in terms of passively pulling data down ('faster pron', etc, etc).

    Ak • Since May 2008 • 19745 posts Report Reply

  • nzlemming, in reply to Joshua Arbury,

    Or the govt’s next great transport priority: a motorway from Cambridge to Taupo. No I am not joking.

    I know you're not. I only wish you were.

    Waikanae • Since Nov 2006 • 2937 posts Report Reply

  • SteveH, in reply to bmk,

    This is a common problem with future technology. Standard cost-benefit analyses don’t work as for example when the copper phone network was put in New Zealand fax machines, dial-up internet, broadband didn’t even exist. And so these huge benefits wouldn’t have shown up in a cost-benefit analysis.

    This is true, but going from nothing to copper is not the same as going from copper to fibre. Fibre is an incremental improvement, not an entirely new thing. And it's not like it hasn't been done elsewhere - fibre has already been rolled out around the world. So a cost-benefit analysis should be entirely doable.

    Since Sep 2009 • 444 posts Report Reply

  • nzlemming, in reply to Sacha,

    For the Greens, Gareth Hughes seems to understand the matter but suffers from the party’s overall comms/engagement weakness (which media attitudes play a large part in, admittedly).

    Gareth definitely gets it. Even Sue Kedgely gets it. I think the Greens are getting better at comms, but there's still a few who knit their own lunch and move verrrrrrrry sloooooowly to do anything, and then only by consensus. Still, they're generally very polite which makes a change from the run of the mill pollie.

    For Labour, Shane Jones has inherited the portfolio relatively recently but the main problem seems that the obvious political value of this issue seems to sail right over the heads of their woeful strategists and comms folk.

    +1 on Jones, also Lees-Galloway and Kris Faafoi who are engaging on the Coast expressway, though have yet to make a splash. Darren Hughes definitely got it, but his fall from grace has left them running to get up to speed.

    The first problem in focussing on the RoN$ is that there's fuck all to focus on! While the projects are running ahead, there's actually no background because they were created whole in the demented mind of No Choice Joyce (actually they were fed to him by the Council for Infrastructure Development, I believe).

    The second problem is timing and - you guessed it - Christchurch. Rod Oram started in on them last year, looking at the cost benefit ratios (which are complete crap) and had a to and fro with Joyce in the SST, but then the September quake happened and the ball never got picked up in the main media.

    Waikanae • Since Nov 2006 • 2937 posts Report Reply

  • James Butler,

    Re. Telecom, fibre and privatization, iirc a significant bit of fibre backbone was laid up the middle of the North Island in the 80s in a cooperative effort between the Post Office and NZR - the PO needed fibre for the phone system, and NZR needed it for new signalling on the electrified main trunk line. If someone knows of examples of similar cooperation between private infrastructure companies (or even SOEs), I'd like to hear them.

    Auckland • Since Jan 2009 • 856 posts Report Reply

  • Sacha, in reply to SteveH,

    Fibre is an incremental improvement, not an entirely new thing.

    There are threshold effects where it behaves like a new thing. Ever try Youtube over dial-up?

    Ak • Since May 2008 • 19745 posts Report Reply

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