Labour draws a clear line in the sand on National's privatisation binge
Water is for sale under National & ACT too
Over the last year, I’ve been warning about Luxon’s pitch to privatise our public assets. He had told reporters in October that nothing was off the cards:
Schools, hospitals, prisons, and even NZ’s critical lifeline water assets.
For some reason, those headlines never made it out to the news outlets.
Political pundits might remember that Labour’s Jacinda Ardern lost significant political capital trying to protect NZ’s water assets from privatisation using a clause called “entrenchment”
i.e requiring a super majority of 60% of votes in the House to overturn any provisions against privatisation.
She lost the battle after significant public outcry and a heavy stream of negative media articles, including from Atlas Network bed fellows - published in Rupert Murdoch press, who called her government, ‘the least transparent in NZ’.
National Party leader Christopher Luxon labelled Ardern’s efforts a “stain on the prime minister's credibility.”
The Green Party remained steadfast in their desire to protect water from privatisation.
But the pressure on the Labour Prime Minister became overwhelming -
I remember when I first started covering politics, I started understanding why Labour and the Green Party tried back then in 2022.
Just as Jacinda Ardern had realised David Seymour is an “arrogant prick” much earlier than many of us, Labour, Greens and the Māori caucus, must have known the likely tricks and machinations of National and ACT.
This morning Kieran McAnulty fronted RNZ’s Morning Report after Chris Bishop and Simeon Brown both refused to.
Brown had earlier told reporters at Luxon’s $1m global investment summit that National is "explicitly" open to health privatisation options - and seeking bidders.
National have also declared everything is on the table for private money - just as Luxon had said.
Labour’s position is clear.
McAnulty:
We believe in the public ownership of core infrastructure.
That's a core part of what the Labor Party stands for.
We've always believed in public ownership for public benefit, and we don't want to see privatisation of health and education.
He also said:
We're talking about what is in the best interest of New Zealanders and selling off New Zealand. for the sake of saving money, [in the] long term is not in our best interest.
We don't, for example, want to see overseas investment in residential property.
We want New Zealanders to have the best chance of buying their home, not overseas people.
And:
Everything's on a case-by-case basis.
We need to make sure that whatever deal the government enters into is actually in New Zealand's interest….
We absolutely have a bottom line [above]
But outside of those, there's a big area where we're open to and are keen to have a yarn in. It's important that we're there.
Chris Hipkins noted that Labour did consider PPP for Auckland Light Rail and those areas remained on the cards.
On Sunday, he also observed National’s cancelling of infrastructure programs has already cost NZ 13,000 construction jobs.
Hipkins signaled that as long as the government is ‘true to their word’, Labour would not cancel other non-core infrastructure projects.
However, the caveat was clear: National need to be true to their word, and their claims.
Hipkins acknowledged that this government has frequently not been.
In an excellent interview last year, Auckland Light Rail CEO Dr Sean Sweeney who has been headhunted to Ireland1 spoke about the downsides for NZ not appreciating the value of government led public infrastructure works.
Of PPPs Sweeney spoke of his experience with them, both as a builder for them, as well as a client.
[PPPs are] ‘an answer’, but not ‘the answer’.
PPPs are just another form of delivery that have particular advantages and some disadvantages.
They are costly, they cost more than a traditional delivery project because of the way they are set up.
But they are a very powerful way of getting certain things to happen and if they are used on the right project they can be absolutely the best way of doing it.
The country should be looking at them but they’re not the answer to every problem but they will enable us to get projects going quicker.
…[In the past they were seen as a firewall against uncertainty of the public purse,] but in the last 5 years, all the major PPPs in Australia have come back to the government asking for more money so actually they are no more cost certain than a traditional delivery project.
Sweeney noted that bringing back expertise once NZ loses it would be at a very high premium.
The message is clear - expertise matters, and so does realistic evaluation.
This looks like where Labour is coming from.
Barbara Edmonds today told investors that any programmes must create real benefits for all New Zealanders, and uphold the country's values.
How that growth happens, and who it benefits, matters.
I'm not interested in an economy where one part of the country races ahead of the rest.
Nor will I accept investments that depend on jobs that are low paid and insecure.
Recent data shows that the Māori contribution to the economy grew from $17 billion in 2018 to $32 billion in 2023 - and there is no reason why this trend cannot continue.
She and McAnulty made it clear they are open to investment and opportunities.
Her social media statement also reiterated their position on core infrastructure -
So expertise matters. So do values.
National have been clear that should they win a second term, all bets are off for privatisation.
As part of their 2026 election pitch, we can expect to see National paint a vision of growth and new infrastructure all over the country and “sell this” to Kiwis as visionary.
Luxon said it was all about making it cheaper for Kiwis i.e “It's fundamentally so that New Zealanders can get more money into their pockets” - a point rebutted by the experience of Dr Sweeney.
The trick of course, is PPPs can be notoriously expensive in the long term, full of fail safe measures for the big corporate money behind them, and pitfalls for those that engage.
Despite Labour drawing a line in the sand, it’s likely National will ignore that and lock in long term contracts, as Simeon Brown already intimated.
But - it will play to National’s desire to be seen as the party that will not tax Kiwis - because they will effectively have offloaded all the work2 to private money, private equity firms, and the like - transferring wealth from the taxpayer to the mouths of the richest.
Media Issues
This morning’s Checkpoint interview, saw the presenter asking Kieran McAnulty what was wrong with PPP if private operators could do it for better and cheaper.
The interviewer used a reference to an RNZ article and claimed it was a good example. McAnulty pushed back.
That article was referring to $6mn of bonuses made to private operator Serco for “low re-offending rates”.
I remembered that article because I found it farcical that a company was being paid millions of $ of taxpayers money of bonuses for re-offending rates in long term prisoners.
Goes to show you that RNZ also needs to be carefully scrutinised when it comes to election time and even left wing voters rely too heavily on article snapshots, and not analysis.
A danger that will be heightened by billionaire, hedge fund, overseas and fossil fuel linked money driving NZ’s largest media conglomerate.
School Lunch Today
Nutritious and better, as Seymour claims, or not?
Related Videos:
Dr Sweeney left Auckland’s $5.4b project to lead Ireland's $20b MetroLink in September 2024. As part of his contract agreement, Sweeney receives €500,000 (NZD $950,000) annually, as well as up to €30,000 (NZD $57,000) in relocation expenses. Private health insurance cover and a leased car was also included.
State housing, public health, infrastructure builds e.g. hospitals, ferries if National have their way etc.
PPP do not work : Transmission Gully as example. Key&Seymour &English accepted an Australian company quote of 800 million dollars, at the end it costed 500 millions more. Downer was the Australian company.
Thank you MTui - great article. It is of some comfort that the potential investors at the summit were given clear guidelines by Labour of what types of projects would be supported by them as a future government (and not cancelled as with Nicola Willis's ferries cancellation fiasco). Hopefully this will dissuade any investors in projects which don't meet these (Labour) criteria. To the government's credit, I guess, Labour MPs were included at the summit. But we all know the PM will declare the summit a resounding success no matter the outcome.