All the appeal of a dry root

Vernon Small points out the obvious.

Perhaps the oddest element of the Budget is the first round allocation of over $500m from the proceeds of the planned asset sales through the so called Future Investment Fund.

Almost half – $250m – goes to KiwiRail. Not so much an investment in the future, as a way to pay for an underfunded loss-making liability from the past … paid for by the sale of a profitable stake in an energy company.

Please make Michael Cullen chair of Kiwirail. He was the dopey bastard who bought it, so he should have to run it.

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  • AngryTory

    He was the dopey bastard who bought it, so he should have to sell its component parts for scrap.

  • Joes

    “Almost half – $250m – goes to KiwiRail…… paid for by the sale of a profitable stake in an energy company.”

    This is pretty sickening. And Labour overpaid for it to begin with, wtf were they thinking.

  • JeffW2

    Cullen’s superannuation should be invested in Kiwirail

  • Guest

    One of my saddest adult memories was watching grown men cry after being told that the Rail component of Toll was being sold back and that their employment would be being transferred to the “new government railways”.

    Many of these had been employed under the original government railways and remembered how bad it was, 

  • In Vino Veritas

    Irony. Labour should enjoy this, because the irony is beautiful. National selling down a reasonably solid state asset to prop up and dud asset bought at an overinflated price. Ain’t it just grand? And Labour think that Cunliffe and Parker are their financial luminaries!

  • Paranormal

    This seems to show Key/Nationals political mastery.  We all know KiwiRail is a dud root, but the left love railway and are all for invetment in infrastructure.  Hard to argue against this masterstroke if you’re a lefty

    • Johnbronkhorst

      Railway history (unlike labour, who are history)..Railways were built BEFORE the advent of the car/truck, as the only fast way to get around (compared to horse and cart), so at the time it was more cost effective. Now we have trucks etc, roads take you where you want to go(not just station to station). So now roads are the most cost effective (by a factor of nearly 3) , asked a company why they didn’t use rail and that was his answer. So now rail will be useful as an ulternative if, 1 it is HIGH speed (expensive, about $80mill per Km), 2 It must be high capacity. 3 the shunting yards need to be automated in some way….It’s all about the speed. My the roads, 4 lanes (at least Wellington to Auckland….Christchurch to Dunedin….Whangarei to Auckland..Napier to New Plymouth (which will intersect Ak- wgtn somewhere)…Then look at improving Rail.

      • Polishpride


      • Dave

        John   I dont disagree, but the one thing the railways have against them, is they are competing with Trucking firms for clients, and their revenue.    Yet, the railways have to pay to keep their tracks fully maintained, and the truckies only pay for a small amount of the upkeep of the roads they use, especially when they cause most of the damage.

        We seriously need a good transport  system, but a four lane road is a single solution, and i believe with modern technology and transport hub solutions we could improve our transport / distribution systems ten fold.  

        I would prefer a 2 lane highway with MOST line haul trucks of the road, and a few high speed trains running a container shuttle service overnight between major transport hubs.    

      • Callum

        Dave, you might want to ask a truck owner how much they pay in RUC’s. Rail is effectlively government subsidised, it has never generated a return on billions invested.

      • Adybombs

        Dave obviously  your knowledge of the situation with Road User Charges is some where none whatsoever and fuck all.  Road transport operators in New Zealand pay sufficient RUCs to cover their usage of the roads. It must also be noted that rail operators have not been maintaining the tracks for the whole time it was privatised hence the need to spend so much money on it now. 

        Lots of good ideas there about hubs and high speed trains there.  Who do you think is going to be paying for that?  Rail can’t run a slow container service properly what makes you think you can run a high speed one.  They have massive cost advantages over the road freight sector but due to the fact they can’t organise a fuck in whore house the market is very reluctant to use them 

  • Troy

    Cullen shouldn’t be put anywhere near things finance related – a history professor who was never qualified to be a finance minister.  Irony – Cullen will go down in history as the dope who mis-managed the country’s finances during a lengthy period of prosperity – thanks Cullen, dopey twit.

    • Johnbronkhorst

      Cullens only relation to economics was that he was an Economic HISTORIAN, his Phd was in mid 19th century economics……… MARX!!! Bet , with his track record (poor as it was), you now understand how he got us in the mess that he did.

  • Greybeard

    I voted
    National in the last election for variety of reasons, although I must admit I
    had a few misgivings about the plan to sell some of some productive

    misgivings were not enough to offset what else I liked about National and make me give my vote


    However, my interpretation of National’s plan to
    ‘sell some assets and use the money to pay
    debt’ appears to differ from what is now being reported


    thought they would literally take money from the sales and pay off overseas
    creditors, reducing the amounts borrowed.

    Something like having a house with a mortgage and
    selling a car to pay of some or all of the

    what is planned seems to be more of having a house with a mortgage , selling a
    car and building a new bedroom with the proceeds,  without paying off any of the


    Had I
    known that I may have voted differently.
    Am I getting it right ?

    • In Vino Veritas

      Firstly Greybeard, National always claimed they would put the proceeds into other assets and programs. In the example of Kiwirail, there is no point in paying back debt when they need to use the money on capital improvements – they’d have had to borrow the money back immediately to do it. And Kiwirail has historically not paid its way.
      Contrary to what the Labour “finance” (I use the term loosely since I believe they are ideaolgical nutters) people say, the country is not forgoing the dividends from the assets sold, the country is essentially being paid in advance. Buyers are not purchasing an asset per se, they are purchasing future revenue streams, with the Government being paid their future dividends in today’s dollars (ie discounted back to their value today – a dollar in two years is worth less than a dollar today).

      Its rudimentary, but hope this helps.

      • Guest

        In the example of Kiwirail, there is no point

        You’re right there make. No point at all. See the lot for scrap.

    • Polishpride

      No Greybeard that is exactly what JK said at the beginning of the campaign. The message changed to what VV said partway through.  

  • Phar Lap

    Most would laugh at Cullen for his stupidy.He is running the Post Office at the moment,it is sliding down a slippery slope.Go figure.

    • Gazzaw

      Sort of ironic that the main cause of Kiwipost’s decline is Kiwibank aka Anderton’s Folly.


    Kiwirail,Was that not one  purchase to help clean out the coffers before National won the election?.Send Labour a bill for their fuck up.

  • Le Sphincter

    Kiwirail , a great investment . Roll on TGV

  • AnonWgtn

    When I saw the heading of this article – I thought TREVOR – well a dry root anyway.

  • Craig

    Get rid of the trains , replace the tracks with a truck highway  , this will more than allow for growth and free up our roads.

  • Phar Lap

    Of course we could retire all debt or most of it by selling off the so called Cullen Fund .Last time i looked it was worth around TWENTY BILLION DOLLARS.Our present interest bill to overseas money lenders is between FOUR to FIVE BILLION DOLLARS.Seems by retiring liabilities like that, would stop the interest drag.Bet the Cullen Fund wouldn’t earn FOUR BILLION DOLLARS A YEAR . RETIRING DEBT,ISNT THAT WHAT MOST NZ HOUSEHOLDS HAVE BEEN ENCOURAGED TO DO.

  • Interesting how people criticize spending on railways as uneconomic, yet the same people suddenly become socialists when it comes to spending even bigger amounts on roads. 

    Roads are not a profit or loss entity, and neither should the railways be.  Best thing to do is separate the tracks from the operating company.  Have NZTA fund the tracks just like they do the roads, and open up the railway network to competition.  Let anyone use it, just like the roads.  KiwiRail would then sink or swim on its own merits.