O'Connor Simon: Debate on Crown Entities Public Organisations and State Enterprises — In CommitteeText is incorporated into the Bound VolumeO'Connor Simon: Debate on Crown Entities Public Organisations and State Enterprises — In Committee[Sitting date: 14 May 2013. Volume:690;Page:9904. Text is incorporated into the Bound Volume.]SIMON O’CONNOR (National—Tāmaki):We have just heard a supposed discussion or lecture on economic rationality but I am struggling to see either the rationality or the economics in it. We have heard from the Green Party tonight that we just need more money in rail and that they will find it somewhere. An earlier speaker was talking about the Privacy Commissioner and saying we just need more money and they will find it and put it in there. We heard from others in the Opposition that one way we will reconcile some of the economics is to move into a monopsony approach towards the electrical market because that will be good.Paul Goldsmith: Monopsony?SIMON O’CONNOR: Monopsony. Have you not heard of a monopsony? We have to give you some education. It is a great word. On the one hand we have got all these extra expenses—[Interruption] Monopsony—yes it is a great word. We have got all these ideas of all this extra spend and yet we are hearing all these anti-approaches. We hear from New Zealand First that we have got to invest more and then—Jonathan Young: It’s not their money.SIMON O’CONNOR: Exactly. It is not their money as my colleague points out. It is someone else’s money. It has been photocopied. It has been taken off someone. It is the “bribe people with their own money” approach which we have seen before. We heard then from New Zealand First that we have got to put money in and then pursue uneconomic approaches. So we are going to buy rail systems be it carts or whatever. We are going to build lines that are uneconomic. And somehow that is rational economics—we are just going to keep putting more money in.What I think is important is to move into context because this Government has invested over $750 million—$750 million of New Zealand taxpayers’ money—into KiwiRail over the last 3 years. This Government has shown a very strong commitment to the rail network over 10 years to turn it round and to put it on its feet. Those of us who were there at the review heard that the board of the New Zealand Railways Corporation is working constantly readjusting its numbers to move KiwiRail into a position where it can stand alone.I suppose that is an element of where the National Party comes in because we heard from Labour and the Greens that they want a hands-on Government. I said it before in another speech—they really want their hands on your wallet and around your throat. National wants to empower KiwiRail to be able to stand on its own two feet. You would think the Greens would be all about actually wanting to stand on your own two feet because that is what National is all about—standing on your own two feet. Is that not good for the environment? [Interruption] They want to stomp on other people’s feet as the honourable Minister points out. It is just crazy crazy economics.As I said $750 million has been invested into KiwiRail and this is investment we have not had for over 50 years. The board came before us and discussed what was occurring. The board noted in respect of buying the new trains and the new locomotives in 2010 which the Government facilitated that it was 35 years—35 years—since such things had been bought. This is a Government committed to building up and strengthening KiwiRail and we have got some great successes.We know that freight is up. Julie Anne Genter is right. It works really well in some places. It works really well when the rail line runs past your business. But in this modern-day economy—not some sort of socialistic or communistic utopia—we live in a “just in time” dynamic where importers and exporters want to be able to move their products just in time. It means they want their product off the ship and brought to the supermarket just in time. They do not want it to be stored in warehouses waiting for a rail network to go in that direction. It works well for elements of Fonterra. I notice actually that New Zealand Rail is working I think towards Darfield to put in a rail line there. It is responsive. But once again we are coming back to a fundamentalism around the rail network—the idea that this is the only way that things are done. That is not the way the economy operates.But I come back to the $750 million that has been invested in KiwiRail. We were told at the Transport and Industrial Relations Committee that we have seen a growth of freight in KiwiRail of over 25 percent. We have noticed that about 17 percent of the income for KiwiRail is through its Interislander service and that is an increase of about $5 million in the last year. KiwiRail is building its capacity it is building its strength and it is doing that on good rational economics. It is not making things up and it is not engaging in economic or transport fundamentalism. It is good economic policy. You invest and then you allow the board and its individuals within the company to work their best for all New Zealanders.Report noted.