Fran O’Sullivan points out that Cullen paid too much buying Railways yesterday.
Finance Minister Michael Cullen has now spent the thick end of a billion dollars of taxpayers’ cash to renationalise a flagging railway system he could have picked up for a song much earlier if he had played a more aggressive hand.
But this isn’t about a prudent financial investment; it’s about ideology and politics. Labour wants State control and to limit what National can promise to spend.
Mr Key is not going to risk electoral wrath by promising to privatise an SOE when he made a commitment otherwise. Instead a National Government will have to try to make the railways profitable – a feat that has defied previous Governments – and get by with less cash to spray around on Mr Key’s own pet infrastructure projects.
Dr Cullen is right to say the selling of the public rail system in the early 1990s and subsequent running down of the asset has proved a “painful lesson” for New Zealand. But that pain is larger due to the excessive amount that he has himself doled out from the taxpayers’ purse to get the asset back in state ownership.
The big question is whether this is the end of Dr Cullen’s buying spree.
I wouldn’t bet on it.
Nor would I. Labour is desperate to win the election and will have no compunction about spending taxpayers’ money on whatever it thinks will help it do that.
But taxpayers will hope yesterday’s acquisition is the final move in the Labour Government’s disastrous history of paying over the odds to acquire assets back from owners that can’t make enough to expand the network themselves to optimal capacity.
History would tell us this isn’t likely, but then Cullen was a historian so he’ll know that history also teaches us the only thing we learn from history is that we don’t learn from history.