Scoop Election 08: edited by Gordon Campbell

Gordon Campbell on the job losses at KiwiRail

July 10th, 2012

So KiwiRail is about to cut up to 220 jobs by October, and SOE Minister Tony Ryall has refused to front up to explain what is going on here. After declining an interview request from RNZ this morning, Ryall’s office issued a limp one line statement, which reads in full: “I have been informed that KiwiRail is consulting staff over possible staff reductions, as one of a number of measures. This is a decision for KiwiRail.”

Well no it isn’t, actually. It is a decision with implications not only for the KiwiRail staff who are being sent down the road – and surely, they deserve an explanation from the top as to why they are being sacrificed after helping to bring the company back from the brink of disaster – but is also a decision that’s relevant to every voter in the country. After all, taxpayers are funding the massive $750 million turnaround programme at KiwiRail launched in 2010, and intended to repair the damage done to the organization by the privatisation process of the 1990s. Moreover, $250 million of those turnaround funds are being paid this year out of the so called Innovation Fund, which is the receptacle for the money from the government’s highly unpopular selldown of its stake in Mighty River Power and other state assets. In fact, Budget 2012 confirmed that KiwiRail is to be the first and the biggest recipient of the initial funds from the state asset selldown.

Giving with one hand, taking with another. This is what makes Ryall’s disappearing act so outrageous. In any developed country, could a Minister really claim that this level of loss of highly trained staff and expertise was of no concern of his – when the job losses we’re talking about are (a) being forced on KiwiRail by an austerity programme originating from government while at the same time (b) the government is funding with its other hand a massive turnaround programme that’s being funded in part by a controversial selldown of state assets in a situation where (c) perhaps the staff being dumped may well be essential to the long term viability of the organisation? As things stand, we’re selling down the assets to fund a turnaround at an organization where we’re also dumping many of the key staff – and then saying it’s not our problem. Sheesh.

At the very least, you’d think Ryall would feel duty bound to be out there explaining how these jobs cuts fit into the long term health and wellbeing of what is a key element in our national transport infrastructure. You’d think Ryall would be explaining how these jobs losses will affect the KiwiRail turnaround, and would have at hand some credible reassurances that the loss of this expertise will not end up wasting a big slice of the proceeds from the asset sales programme. But no…Ryall has simply run for cover. Pretty incredible. This is what we pay the guy over $200,000 a year, plus perks to deliver?


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    1. 8 Responses to “Gordon Campbell on the job losses at KiwiRail”

    2. By Tiger Mountain on Jul 10, 2012 | Reply

      This is sub “we had to destroy the village in order to save it” stuff. It seems the torys are going for broke alright in this second term. Ground zero, what is going to remain of our once proud state infrastructure-seriously? Sack and sell off anything that moves apart from banksters and consultants is the modus operandi.

      In a long narrowish country with peak oil here, rail should be viewed as an asset by any government. Sign that petition and support the NZ Māori Council water rights case or you are being complicit with the National/ACT/Dunne/MP government.

    3. By donna on Jul 10, 2012 | Reply

      40 jobs lost at Hillside last year, more will go if/when the workshops are closed, and now this.
      Yet only last week the Prime Minister was rabbiting on that we had to put back the date for farmers to join the ETS because the country might, you know, lose jobs. Dear John – we’ve lost almost 300 jobs just in the last couple of weeks.
      Next, they’ll be moaning about the lack of skilled workers. Again.
      What a disgrace. TM: Your ‘destroy the village in order to save it’ analogy is depressingly apt.

    4. By Dave Brown on Jul 10, 2012 | Reply

      Obviously Rail is being set up for selling down again. Get rid of non-performing passenger and other services and sell of the profitable freight service. Perfectly rational for Banksters to boost NZ as viable Sharemarket and Financial Hub.

    5. By Rodger on Jul 10, 2012 | Reply

      So, if Rail was to benefit from the sale of Mighty River and now finds it necessary to dump staff, does that indicate something awry in the asset sale process?

    6. By Kat on Jul 10, 2012 | Reply

      What Key and his henchman such as Ryall are doing is nothing short of economic and social treason. The only consolation at this stage is that they will be well and truly hung by the court of popular opinion come the next election. In the meantime it is painful to witness the destruction of the fabric of this once proud working nation.

      Anyone remember those prophetic words from Helen Clark post election in 2008 regarding Tory bonfires?

    7. By clairbear on Jul 11, 2012 | Reply

      Interesting – it was a political decision to sell off Kiwirail, it was a political decision to buy it back again and now it seems in the future it might be a political decision to sell it again.

      Makes you wonder what attributes any political organisation has to run companies.

      Still it seems that the political decision to sell it again will never happen as we will have a different government again – because the public don’t want asset sales and will vote against it in the next election – I guess, surely!

      But maybe this is not the case of burn the village … maybe more of burn off the old crops to promote the new growth. Who knows – I only know I have very little faith in any political organisation – by their nature they can never succeed.

      It seems to me that most of the good times we had during the 50’s 60s and 70’s that everybody is nostalgic about, came on the back of the vacuum created after a couple of world wars and people understanding after those horrors that life can be worse.

    8. By Robert Miles on Jul 11, 2012 | Reply

      In the United States the large rail freight companies appear to be returning to success and high profitability in long haul container and coal transportation. In New Zealands case the rail system suffers from fundamental problems. The length of the hauls is generally not long enough to be economical for rail freight outside of specialised hauls of coal, milk products and log and pulp products. Even in those areas the volume and tonnage of the trade is small, compared with what most even narrow gauge global operators like Queensland Rail would consider viable. The electrified freight lines of Queensland Rail would move 100 million tons of coal a year.
      So outside the Auckland and Wellington commutter areas one has a right to be sceptical whether rail freight is at all a sensible investment outside a. Auckland – Tauranga and associated timber lines. b Taranaki – Hawkes Bay for oil and dairy related products. c. The Christchurch- Westport line for coal and tourism.
      The existence of Cook Straight which will probably require at least a billion to be spent on new rail ferries in the next ten years furthur impairs the viability of the rail system. The Picton- Christchurch railway was very much built on the cheap when the proposed Nelson- Wesport line was judged too earthquake prone in the early 1930s. The whole section of track from Picton- Christchurch while little impairment to modern powerful diesels or electrics moving at 50mmp or 60mph with light passenger trains, is far too steeply graded and earthquake prone for successful or economical freight movement. The building of a new rail ferry terminal at Clifford Bay would add another a billion to the cost and would not eliminate several other 1/50 gradients between Clifford Bay and Kaikoura.
      The really fatal damage to the railways was done by the failure of the Labour Governments of 1972-75 and 1984-1990 to invest in rail and their general hostility to rail investment particulary in passenger services. When I interviewed the 74-5 Labour Minister of Rail, Ron Bailey he apparently viewed Labours tiny investment in the crapped out rattler the Northerner and the promise to maintain the ‘Blue Streak’ passenger service to New Plymouth as a triump of modern rail planning. In fact Kirk and Rowling rejected every useful plan for rail ivestment other than hypothetical plans for rapid rail in Auckland the still pie and sky, city loop. The four year rail price freeze advocated by Kirk wrecked any viable financing and costing of rail and took NZR from break even profitability to $300 million losses for the following decade.
      The freeze on rail capital investment imposed by Prebble and Richardson, combined with Ruths extemist Finance and Transport Acts destroyed the efficiency, leverage potential of rail and meant no private operator had a chance.

    9. By Susie Brown on Jul 11, 2012 | Reply

      Being pro-rail, as I am, is not nostalgia. A nation-wide rail network, well-maintained, is the most fuel-effient form of freight transport on land. (Four and a half times as fuel efficient as road.) Tracks in poor condition limit the maximum speed of trains and handicap rail in its ability to compete with trucking. Gisborne people are witnessing what the lack of maintenance has done to their economic viability.

      The economic turkeys in the government avoid seeing what is happening to rail overseas. Other governments are taking responsibility for making rail as modern and fast as possible. Rail has the potential to reduce our dependence on imported fuels. In a real fuel crisis, we will regard trucking as an indulgence, not a necessity, for long-haul land travel.

      First Kiwirail tossed aside the skilled workforce at Dunedin’s rail workshops. Then they cast other skilled workers on the scrap heap. John Key’s “brighter future” is truly tarnished.

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