A drag race to a coronation

7 MinutesBy NZ Trucking magazineOctober 6, 2017

Economist Bernard Hickey. A buffer is so important.

New Zealand‘s general election in September didn‘t provide National or Labour with a resounding win, and soon New Zealand First leader Winston Peters will determine who governs for the next three years.

A total of 61 seats is needed for a majority and National has 58 seats to Labour‘s 45, so is two short even taking into account Act‘s single seat. Likewise, even with the Green Party‘s seven seats, Labour only has a total of 52. New Zealand First has nine seats, so could put either party in power based on the election night results.

If National formed a coalition with New Zealand First, the total number of seats would be 67, providing a buffer of five, whereas if Peters chooses to throw in his hat with Labour and the Greens, there would be no buffer at all.

Economist Bernard Hickey spoke at a business event in Levin last week and explained why this buffer was so important.

“If a couple of New Zealand First MPs leave and go independent, or National ones get caught doing something they shouldn‘t and there is a byelection, then five is a big enough buffer. With Labour there would be no buffer, so Winston would be worried if any MPs left. How stable the coalition will be depends on how big the buffer is. The final result could turn out to be 56/54 or even 55 all.”

Peters has made it clear he won‘t make a decision until after the special votes have been counted. Hickey says the specials typically go to Labour and the Greens, and if they built on their totals and National dropped, Labour could end up with enough of a buffer to make all the difference to Peters.

Hickey says a Labour/Greens/New Zealand First government could have an effect on the transport industry because their priorities differed from National‘s.

“Winston is a big fan of rail. He thinks it‘s a tragedy New Zealand Rail has been left to atrophy and been allowed to run down. If a Labour/Green alliance got in, it could affect RONs. It would be hard to get those projects through, as there would be more emphasis on rail rather than road. However, Winston is a big fan of the regions and doing things for the regions, and people there want the roads.”

As for Peters‘ talk of moving the Auckland port to Northland, Hickey says that will never happen.

“Moving the port to Northland makes no sense and there are a bunch of reasons for that. For a start, Auckland Council own the port and you can‘t force them to move – it has to be their decision.”

Hickey says the government would have to buy the port and that could cost up to $1.5 billion. KiwiRail has estimated the cost of getting Northland’s rail network operating to the same standard as other regions as up to $1 billion, and improving the rail link for freight through Auckland at another $2b to $3b.

At the moment, containers can‘t be transported by rail from Northport to Auckland because the rail tunnels are not large enough to take containers.

“It would cost billions to move the port and that would become government debt. Then there is the fact 70% of the freight that lands in Auckland goes to Auckland so you‘d have to ship it down from Whangarei.”

Hickey says the port will outgrow its current location one day and need to move, but it doesn‘t make sense to move now, and other options were likely to be more suitable than Northport.

Peters could go with Labour if the numbers stack up, as Labour‘s policies are more in line with New Zealand First‘s. As for the idea of a National/Greens government, Hickey rates that as just a “wet dream” for National supporters.

“The trouble is, Green supporters hate National, it‘s tribal. It‘s part of their identity. You can‘t go back to the Green membership and do a deal with National because they need 75% party support to do it, and that‘s highly unlikely.”

National tried and succeeded at taking the Northland seat off Peters and that could count against them in the negotiations.

“National did well in the regions by scaring New Zealand First voters into voting for National. They got 47% of the party vote by targeting New Zealand First voters, telling them if they wanted a water tax, to vote for New Zealand First, and if they wanted capital gains tax they would get that under a Labour government by voting for New Zealand First. It was a deliberate policy and it worked. Winston was not happy. He holds grudges, especially as he wanted to win that seat.”

Hickey says Peters believes National leaked his pension details, and Peters has accused National Party leader Bill English of being a liar and a criminal over the Todd Barclay affair, which will make it hard to have discussions with the National Party.

“Bill English seconded the motion to have Winston kicked out of National in 1991. Jacinda Adern, Labour Party leader, has not done anything to upset Winston, and he has never said anything bad about Jacinda. Her deputy, Kelvin Davis, is actually a relative of Winston‘s, so Winston is just as likely to go with a Labour/Greens coalition as with National.”