Workin’ on the railroad

The New Zealand Government today announced that it was buying the railroads back from Australian-owned Toll Holdings for $665 million. The Opposition, the conservative National Party, immediately condemned it as “reckless”; they would—they’re the ones who sold it off in a fire sale in the 1990s.

The railroad has deteriorated ever since it was sold, with many services abandoned, tracks ripped up and other services allowed to fall into disrepair. In 2003, the NZ Government bought the tracks back from Toll for one dollar. The move today puts the whole thing back in taxpayers’ ownership.

This is a great move. Some assets are too important to be left in private hands, especially when the profit motive means a company won’t invest in infrastructure or work to promote the country’s general interests, like getting freight off the roads and onto trains (Toll also ships freight by truck, so it had no incentive to make rail better).

The National Party said recently that it wouldn’t sell any national assets during its first term, should it win the coming election. This is despite the fact that for around 20 years party policy has been to sell off all state-owned assets. Deputy National Party Leader Bill English recently said that National would sell off the railroads—again—but seems to have been contradicted by the Party Leader. It’s hard to tell which side of National to believe, but I certainly won’t take the risk.

Slowly this government has undone much of the damage done by the neoconservatives in the 1980s and 1990s. To be sure, back then economic reform was overdue, but they went way too far, to the detriment of New Zealand. This Labour-led Government is finally restoring balance. Actually, you could say that they’re getting New Zealand back on track.