Government says no to ‘Ferrari’ ferries, says we need to find a ‘Toyota Corolla’

As the cost of yet another big infrastructure project blows out, the government stamps its mark by saying no to more funding for the Interislander ferry replacement project

Mōrena, and welcome to The Bulletin for Thursday, December 14, by Anna Rawhiti-Connell. Presented in partnership with Z Energy.

In today’s edition: tertiary education minister wants local leadership restored at polytechs early next year; agreement reached at Cop 28; UN overwhelmingly votes in favour of humanitarian cease-fire in Gaza; but first, a big call for the government as it rejects request for further funding to replace the Interislander ferry fleet

Government declines KiwiRail request for an extra $1.47b for ferries

As Catherine headlined on Monday, 2024 will be make or break for for New Zealand infrastructure. While the Interislander ferry replacement programme isn’t completely broken, it has been left dangling. Finance minister Nicola Willis announced yesterday that the government had declined KiwiRail’s request for an extra $1.47b for the portside infrastructure needed for the new mega-ferries. Willis said Kiwirail was effectively paying for a “Ferrari… and now we're going to go off and see whether there are any good reliable Toyota Corollas available” to cut costs. Marlborough’s mayor, Nadine Taylor, says the decision will be a shock to people in Picton. As BusinessDesk’s Oliver Lewis reports (paywalled), the decision creates uncertainty around the future of the Cook Strait crossing and leaves KiwiRail with a hole in its emissions reduction targets.

First big call, entire state sector ‘on notice’

As The Post’s Luke Malpass notes, the Ministry of Transport and Treasury had advised against proceeding with the additional funding request. Malpass writes that the government’s “first genuinely big decision” means the “entire state sector is now on notice that building programmes, projects, lurks and policies out of step with the new regime will be cancelled, changed, pared back.” Only time will tell, he writes, as to whether the decision “is penny wise but pound foolish”. BusinessDesk’s Pattrick Smellie argues (paywalled) that the government has made the right call. Smellie notes that the push for “an upgrade that required ferries big enough to accommodate rail freight rather than use globally conventional roll-on/roll-off technology” came from Winston Peters and Shane Jones when NZ First was in coalition with Labour between 2017 and 2020.

Why do costs on these big projects always blow out?

In September, BusinessDesk journalists (paywalled) tackled the question of why infrastructure projects are seemingly always “over budget, over time, under benefits, over and over again” (to quote Danish academic Bent Flyvbjerg). It is a very good series if you want to spend the holidays reading. As Oliver Lewis summarises (paywalled), it is, in part, due to the perception problems created when projects are announced for political reasons, sometimes prematurely, with no thorough costings or formalised funding commitments but a figure attached. The remaining reasons are unspeakably reasonable for those seeking to shake their fists about project failure and cost blowouts. Complexity, change, and risk management are all features. Nonetheless, it still leaves this small country with aging infrastructure and the question of how to replace it while also investing in the future.  

Champagne tastes on a beer budget

In related news, RNZ reports (I stole the subheading from them) on new data on New Zealand’s account deficit released yesterday. That measure shows the balance between the value of the goods and services we import versus the value of the products we export. The data showed the deficit for the year ended September was $30.6b. ANZ senior economist Miles Workman said the narrowing of the deficit looked to have stalled, and the country's external position was "far too out of balance".GDP figures are out today. The Herald’s Liam Dann previews it here (paywalled), writing that while the data is expected to show growth, it may signal the beginning of a long period of slow growth.

This is the last “normal” Bulletin of 2023. Tomorrow, Catherine and I will pen a special edition on the newsmakers of Aotearoa in 2023 and our sign-off for the year. The Bulletin then takes a hiatus and will be back on January 15.

The graduate changing the face of his pharmacy

Recent University of Otago graduate Pounamu Keepa (Te Aitanga a Mahaki, Ngāti Ruanui, Tūhourangi, Ngāti Kahu) hopes a familiar face behind the pharmacy counter will help improve the trust between whānau Māori and the health system. “It’s not often you see a Māori behind the counter at a pharmacy. I’m hopeful that a familiar face will improve whānau Māori trust with the health system and medication,” Keepa says.

Read more about Keepa's story as one of the University of Otago's newest graduates here (sponsored)

Local leadership back at polytechs early next year

As RNZ’s John Gerritsen reports, tertiary education minister Penny Simmonds wants local leadership restored at polytechs early next year. The super polytech, Te Pūkenga, will be dissolved and reverted to the pre-merger state of separate institutions. Te Pūkenga managers are due to report back to Simmonds tomorrow on the first steps to restoring local leadership to its 16 polytechnics. As Gerritsen notes, sector insiders are sceptical about the financial future of polytechnics, given the big losses made before and after the amalgamation. RNZ understands the plan will involve new appointments after many management roles were shed in the process of merging. Simmonds has indicated people who formerly held leadership roles in polytechnics were offering to step back into local jobs.

Cop 28 agreement lands on ‘reducing’ fossil fuel consumption

Representatives from nearly 200 countries have agreed to begin reducing global consumption of fossil fuels at Cop 28.  More than 100 countries had pushed for the stronger “phase out” commitment but were met with opposition by oil producing nations. The BBC’s Matt McGrath writes that while the draft agreement is historic and the biggest step forward on climate since the Paris Agreement in 2015, on its own, it’s unlikely to keep temperatures under 1.5C this century. Reporting for Newsroom, Rob Oram describes the deal as a “hard-fought compromise to transition away from fossil fuels”. Ellen Rykers, editor of our climate and environment newsletter, Future Proof, has zoned in on a plan launched at Cop 28 by New Zealand not-for-profits to restore 2.1m hectares of land to healthy indigenous forest over ten years. Laura Gemmell has been on the ground in Dubai as the summit has unfolded. In her latest update for The Spinoff, she reports on the Māori climate startup, the Hinemoana Halo Ocean Fund, which secured a multimillion-dollar investment at the conference.

Last hours to pledge, support The Spinoff and get rewards

Thanks to over 1100 Spinoff supporters, we’ve now pushed past our first PledgeMe goal of $50,000, but the campaign ends at 8pm tonight. Any additional pledges will go towards explainers on big food-related topics to allow the broadest possible audience to access the work.

We have plenty of exciting rewards, including a lunch for two curated by Josh Emett and a wine collection consultation with By The Bottle’s sommelier Pete Connell. If you‘re looking for a Christmas gift option, our reading, beer and eating out guides will arrive before Christmas. All other rewards will come with a voucher before Christmas, too.

To help us get close to our final goal, choose a reward, make a pledge or share our PledgeMe page with friends, whānau and colleagues. Thank you to everyone who has pledged so far.

Overwhelming majority vote in favour of humanitarian ceasefire in Gaza

The United Nations General Assembly passed a non-binding, symbolic resolution yesterday to demand an “immediate humanitarian ceasefire” in Gaza. 153 countries voted in favour, 23 abstained, and ten countries voted against it. Here is how countries voted. While the US voted against the resolution, US President Joe Biden warned that Israel was losing international support because of its “indiscriminate bombing” of Gaza before the vote. Yesterday, prime minister Christopher Luxon and the prime ministers of Australia and Canada, Anthony Albanese and Justin Trudeau, issued a joint statement calling for a pause in hostilities in Gaza and affirmed support for urgent international efforts towards a sustainable ceasefire. Labour leader Chris Hipkins said he welcomed the statement but said it needed to be stronger. According to the latest figures from Gaza’s health ministry, 18,608 Palestinians have been killed in Israeli strikes on Gaza since 7 October. The UN agency for Palestinian refugees reports almost 1.9m people in Gaza (nearly 85% of the population) are now internally displaced.

Click and Collect

• Owners of storm damaged homes in Auckland finally begin to receive buy-out offers

• Chlöe Swarbrick refuses to apologise for 'demonstrable lie' accusation in the House

• Change of government consequence: 57 people left waiting for 100th birthday congratulatory letters

• Please stop taking your cats to national parks

  Feeling clever? Click here to play 1Q, Aotearoa’s newest, shortest daily quiz.

Right now on The Spinoff

Stewart Sowman-Lund reviews The Spinoff’s political predictions for 2023. Tune in next week to see who commits to the bit for 2024. People gathered yesterday in Wellington and Auckland to protest the u-turn on New Zealand’s world-leading smokefree law. Gabi Lardies was there. Writers from around Aotearoa pay tribute to Renée. Tara Ward meets Dunedin's most dedicated “plogger”. Shanti Mathias explains how returning to fossil fuel exploration could hurt New Zealand's relationships in the Pacific.

Sporting Snippets

• New minister of sport would like to see dedicated test cricket venue in Auckland

• ICC rules prevent Australian cricketer from wearing shoes with slogan highlighting plight of Palestinians in Gaza

• Former Wallabies coach Eddie Jones named Japan coach through to 2027 Rugby World Cup

Got some feedback about The Bulletin, or anything in the news? Get in touch with me at thebulletin@thespinoff.co.nz.

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