Bishop ChrisCHRIS BISHOP (National—Hutt South): Thank you very much Mr Speaker. The National Party will be opposing this piece of legislation and I want to explain to the House why and want to—Hon Clare Curran: What a surprise!CHRIS BISHOP: Oh well that's a bit unfair. We support all sorts of legislation but not this one.I want to explain to the House why that is. Let me start by talking about rail in New Zealand. It was the Minister of railways Gordon Coates in 1923 who said The railways have never been regarded or run as a profit-making concern" and we are getting back to that point 100 years later where the Government appears to have no expectation of commercial common sense and no expectation of profit making on the railways. We are going back to those days that Gordon Coates talked about in 1923—Hon Clare Curran: Neo-liberal.CHRIS BISHOP: Oh "Hear hear." says Clare Curran. Well that tells you all you need to know I suspect.Hon Clare Curran: No I didn't. I said neo-liberal.CHRIS BISHOP: Oh. Ha ha! Well that doesn't even deserve a response.So let's be clear about it in New Zealand. The economics of rail in New Zealand are challenging. We are a long and thin country with challenging geography. We have a population density that is far less than other countries. The United Kingdom for example has 338 per square kilometre; Japan has 251; we have 16. The freight used in New Zealand on the rail is difficult. The routes that the freight on rail operates on are mapped out often from routes 100 years ago and so you have to travel over quite long distances to reach the same destinations caused by roads. So rail in New Zealand is economically challenging but it plays an important role. That is definitely true. The Minister made mention of that in his speech and of course he is correct. Freight makes sense where you've got bulky products that are close to markets and close to ports. I'm in particular thinking of the "Golden Triangle" of Hamilton and Tauranga and Auckland where rail does make sense. In the rail lines in Auckland Hamilton and Tauranga there is good use of—Simeon Brown: Particularly the Auckland part.CHRIS BISHOP: "Particularly the Auckland" says Simeon Brown there is good use. But let's be clear: 93 percent of freight in New Zealand does not travel by rail; it travels on the road. Let's also be clear that that is a decision made by freight companies and people transporting goods around who have made those decisions because it's more economically sensible to move something on the road by truck than it is by rail.Rail makes sense for our metro networks. You'll never hear a stronger defender of our passenger rail networks in Wellington: 10000 people in Hutt South and the Rimutaka electorate every day get on the train and go into Wellington. It is a vital part of the Wellington metro network as indeed it is part of the Auckland network. National is proud of our investment in metro rail. It was the National Government—despite what the Minister says about nine years of neglect—that bought the Matangi trains for the Wellington railway network. It was National that completed the electrification in Auckland which has driven the very large increase in passenger growth on the Auckland network. Despite what the Minister says about the City Rail Link it was National that agreed to get on with the City Rail Link.I welcome—Hon Phil Twyford: More like delayed it for five years.CHRIS BISHOP: Well he might quibble but I welcome what the Minister said around the thousands of passengers that that will allow the Auckland metro rail network to take. That will be a good thing because they'll be people not in cars; they'll be people using that rail link. And of course I think you're beginning to see passenger usage in Auckland continue to increase. So rail in New Zealand definitely has a place but we need to be cognisant and we need to be clear that the economics in many parts of the country are challenging.That brings me to the second point I want to make which is about what is the appropriate structure for rail in New Zealand. It would be true to say that rail is probably the most reviewed operation in New Zealand history. We have oscillated basically from rail as a public service sponge for excess employment which was how rail operated throughout most of the 1940s and 1950s and 1960s. It was the biggest employer in the country and the Government owned the rail. There were no commercial disciplines whatsoever and there were railway lines and spur lines all around the country. I think everyone agrees that that was essentially a sub-optimal state of affairs. It was totally economically inefficient and of course we unwound that in the 1980s—and 1982 was when the restructuring started. People actually often claim it was Prebble that destroyed rail or started it all. It was actually started in 1982 under Muldoon—that great reformer not. But he started the process of reforming rail and then of course we had the reform of rail from 1984 onwards. Then we had privatisation from 1993 to 1996 and then the renationalisation when we now have KiwiRail in 2008.The National Government's approach to KiwiRail was to expand rail where it made sense—and that's in Auckland and Wellington and the "Golden Triangle" as I talked about—but to try and make sure it was run in a commercially focused way. That brings me to the concern about this bill and about where this Government is taking rail which is that we are now seeing—on the great oscillation in New Zealand in how we run rail between public service non-commerciality and complete profit maximisation—the wheel turn again back towards that public service mentality where commercial discipline goes out the window.So I'll give you an example. KiwiRail even though it's a State-owned enterprise has been revalued by Treasury as an entity that is just a public benefit.Michael Wood: That's an entirely different issue.CHRIS BISHOP: Well no it's not a completely different issue; it goes completely to the point which is: what is the expectation of rail in our transport system? If Treasury and the Government regard KiwiRail and the Crown accounts as an entity that is not a for-profit entity—that's the distinction: it's not a for-profit entity; it's a public-benefit entity—that has an impact.We saw the instruction to KiwiRail to cease the ending—not do the diesel electrification which Michael Wood talked about back in 2018. And so what we are seeing on the pendulum is KiwiRail revert to being something that doesn't have any commercial discipline on it. And Mr Twyford the Minister talks about the huge increases in funding going to rail. Our concern in the National Party is that none of that is based on strong business cases because none of them are available. We saw $331 million in Budget 2019 we've got huge amounts of money going through the Provincial Growth Fund and our concern is that those investments are actually wealth destroying. They're not actually investments that will grow the economy; they're actually wealth destructive. We've seen the opening of commercially dubious lines like Napier to Wairoa for example which members opposite got very worked up about when the last National Government was in power. But they've reopened it. Do you know how much freight's travelled on that line so far? Nothing. Nothing. No freight has travelled on the Napier to Wairoa railway line. So that brings me to the third point which is why we don't support this bill. The first point is we don't believe the case for change has been made. And the Minister really didn't make a very strong case for change. We think the status quo is fundamentally satisfactory. Road users pay for roads and the maintenance of existing roads through fuel taxes and road-user charges and the users of rail pay for the use of the rail network through a State-owned enterprise (SOE) which is called Kiwi Rail. We think that having KiwiRail as an SOE that has a for-profit motive and is run under the Companies Act is something that's a good thing because it promotes commercial discipline. It means that we don't get uneconomic wealth-destructive investments. The worry with this bill is that essentially road users will end up cross-subsidising rail users on uneconomic routes that rail users don't wish to use. And so the concern is that this is going to be a giant waste of money and that is why we oppose the bill. Thank you Mr Speaker."