Garry Law's Public Issues Blog         


Friday, September 24, 2021

 AUKUS – the 2021 New Relationship

It will be apparent that the recently announced alliance: “an enhanced trilateral security partnership” is but an agreement to agree. Its target is unmistakably China. There is as yet no treaty document to be ratified by parliaments. There seems little prospect that it will result in any new unified command structure of the NATO ilk.

Australia and the USA have long emphasised interoperability of the armed forces and the high frequency of US arms in the Australian forces has enhanced that. New Zealand too has in effect practised this and has been happy to exercise with Australia and USA forces to achieve this.

The UK and USA of course operate through NATO in the sphere of influence of that organisation. In recent years operations under that orbit have included Australia and New Zealand, most recently in Afghanistan. Neither though is formally a member of that Treaty.

The UK presence in this end of the world has been slight of recent decades so interoperability with the UK has not been of particular importance to Australia or New Zealand. An early cruise of the new UK aircraft carrier HMS Queen Elizabeth has been to the Far East so the UK is undertaking a pivot of its own towards Asia. Aircraft Carriers operate in Carrier Battle Groups (Strike Groups in US parlance) where a carrier (or sometimes two) is the central ship of a group of attack and defensive support and supply ships, including attack submarines.

The UK gas turbine powered carriers have much more limited range than the US nuclear powered carriers and hence need fuel resupply in a way the US carriers do not. The UK does not have the ability to put together a Battle Group in the Far East from its own resources alone. Outside a battle group, carriers are much more vulnerable.

The UK does not have surveillance aircraft in its seaborne arm. They detect incoming threats further than ship borne radar and can also be used to direct operations. The USA does, the E-2 Hawkeye. Land based AWACS aircraft are also vital to directing attack aircraft and defence in general. The UK has them but not in this theatre. Nor does it have aircraft for submarine surveillance and attack in this theatre.

The actual role of attack submarines in battle groups is a somewhat arcane aspect of tactics. Their presence seems necessary and it is presumably more oriented to countering opposition attack submarines that are within cruise missile range of the carrier or at worst torpedo range.

Support is a crucial element for carriers. Their air groups can swap out in the course of a cruise – provided there are airbases within range. Some support staff must go with them. A lot of resupply can take place at sea. Critical crew can be exchanged by aircraft but the larger part of the crew needs to be exchanged at base at the end of a cruise or at a friendly port. Exchange crews need to be “worked up” to reach full capability.

Submarine crews are selected and trained for long cruises but there is a limit, shorter in the smaller attack submarines than it is in the large ballistic missile boats. Nuclear powered boats do not need fuel but fresh food and physical mail delivery can be done at sea and help morale even if it means breaking submerged cover. Crew changes of any magnitude need home base or a friendly port.

So who is gaining what from the proposed arrangement?

Australia is gaining nuclear propulsion technology for its new submarines. Remember though it is quite distant in time when these will be commissioned. It is not clear if it is the UK or the USA that will provide that. That will be a testing decision. Australia is well capable of doing much of the ship building but the offensive and defensive devices will most likely be American for interoperability reasons.

It is gaining the UK as a more committed presence in the region, but not one who can operate independently. Interoperability would be a challenge.

It is gaining increased commitment from the USA, not that there was ever much doubt of that anyway.

Its attack submarine capability will make it a desired ally, more than the present Collin class conventional boats.

It is gaining cooperation in advanced electronic warfare development with its partners – whatever that turns out to be.

The UK is gaining a customer for its nuclear propulsion technology – maybe.

It is setting itself as a presence in the region again.

It is enhancing its ability to do resupply at Australian ports.

It is setting itself up to be the centrepiece of a carrier battle group around one of its carriers, but part time (two carriers is insufficient to sustain one continuously in this area), but one that is likely to need some or much of supply support, surface protection ships, attack submarines, AWACS and aerial marine surveillance support from allies to be effective.

It is resetting itself as a key ally of the USA.

The USA will be supplier for much of the advanced technology for the submarines even if not the propulsion.

It gets a new allied presence in the region – the UK – perhaps only part time as far as carriers are concerned.

It strengthens its relationship with Australia and will face little resistance to increasing its support presence there.

Where has this left the three parties’ relationships with other friends?  With France decidedly worse – a slight not easily forgotten - and this could well have consequences in European collective moves to greater self-reliance. Not only New Zealand but Canada, Korea, Japan, Indonesia and India will look at this and wonder if the world has not moved a bit against their interest.

New Zealand does not rank much in this and is unlikely to put its head up with any adverse opinion. It is not likely though to move itself far from Australia or the US in its defence equipment and cooperation. Its forthcoming maritime aircraft will be a valuable regional resource and interoperable with the AUKUS. Its new transport aircraft will be from the USA but more of tactical than strategic supply help.  HMNZS Aotearoa, the recently commissioned is a supply ship that could work easily with other navies when needed.

A decision to replace the two ANZAC frigates may be important. They are planned for replacement in the mid-2030s (by 2030 Te Kaha will be 33 years from commissioning). An early decision on their replacement by something with compatible systems and armaments with Australia and the US would be a signal readily received.

The nuclear propulsion ship visit ban is politically difficult to shift and not likely to be tacked other than in extremis. It may become an irritation to Australia as it is to the US.


AUKUS - Wikipedia

Australia nuclear submarine deal: Aukus defence pact with US and UK means $90bn contract with France will be scrapped | Australian foreign policy | The Guardian

Joint Leaders Statement on AUKUS | Prime Minister of Australia (

Geoffrey Miller: New Zealand could be the big winner of Aukus fallout | RNZ News

Opinion | Biden’s Australian submarine deal is a big win in the strategic competition with China - The Washington Post

Carrier strike group - Wikipedia


Friday, August 20, 2021



The victory of the Taliban over their corrupt western aligned government opponents seemingly was inevitable. It seems like history all over again given the number of powers that have tried to impose over the land and sooner or later left. Read the history here: History of Afghanistan - Wikipedia

The recent history of the West in the region is a story of many mistakes.

After the September 11 (2001) attacks on the US by Al-Qaeda there was a strong incentive to degrade its capability. Al-Qaeda was founded in Afghanistan in the course of the mujahedeen resistance to the Soviet invasion in support of a leftist government. In 2001 its main base was Afghanistan and the Islamist government there was the only state in the world to tolerate and support it.

The USA government had supported the mujahedeen with arms and other support in resisting the USSR on the mistaken assumption that one’s enemy’s enemies were your friends.

In 2001 the USA somehow came to the conclusion that Iraq was its top priority in responding to 9 / 11. Remember they has earlier sided with Iraq against Iran - the same friend recognition error. The defeat of Iraq in the first gulf war was seen by President George W Bush and his ilk as unfinished business with Saddam Hussein remaining in power. Iraq was supposed to have forsworn weapons of mass destruction and was subject to a UN inspection regime to confirm that. Iraq complied with the mass destruction ban but was stupid in resisting the inspection. This left the opportunity for the US to allege they were not compliant. The UN monitoring scheme was reporting its difficulties but fundamentally it was clear from their reports Iraq did not have mass destruction capability. US Republicans, never great fans of the UN launched a campaign to disparage the UN on this matter. This was a disgraceful episode. Post invasion it was clear the UN was perfectly correct. There were no weapons of mass destruction

Hussein never had any time for Al-Qaeda and it never had any strength there so it was the wrong target on two fronts.

Iraq becoming a priority was a massive failure in leadership, was opportunism, and a complete misdirection of their desire to defang Al-Qaeda. The Western imposed government there has never established credibility and almost fell to the ISL insurgency. New Zealand to its credit said ‘no thanks’ to supporting the Second Gulf War. The US wanted to achieve regime change. They had enough force to defeat Hussein but not enough to pacify the country. A messy post defeat period followed.

Attention was turned to Afghanistan. Support to the tribal rivals of the government saw the latter collapse but no government was likely to emerge quickly. In the use of force you have war aims. What were they here? The mujahedeen government had many aspects distasteful to the West, such as intolerance of other strands of Islam, attitudes to non-Islamic cultural heritage, attitudes to education and women. 

Regime change seemed to be quickly decided on. What sort of neighbours made up Afghanistan’s border?


Iran was never going to be a good neighbour to a US friendly state. Pakistan had a long history of interference in Afghanistan, seemingly conflicted over wanting influence, reduced risk from that neighbour, an Islamist orientation and arguably benefiting from it being kept unstable. Certainly a western aligned state was not desirable for Pakistan. Not a good place to start. The US had a long history of tolerating Pakistan’s behaviour from cold war days when India was seemingly more Soviet influenced. Afghanistan as a western aligned state was never an easy solution.

Was there an alternative to degrade Al-Qaeda without regime change? They largely achieved that early on. The USA is expert at surgical strikes against extremists, more recently using sophisticated drones.. It must have been an option.

New Zealand joined in the Afghanistan efforts, with active engagement, training of Afghan forces and reconstruction. It had cross party support, strongly from Helen Clark when PM. Did that achieve anything?. Its not clear at the moment. Perhaps the Taliban are not the mujahedeen and that is a result of western influence. Wait and see, but the blunt answer may yet be probably not.

President Obama had noted placing Afghanistan second in priority was a mistake, but his determination faltered as the resistance, now named the Taliban continued.

The idea that the future of Afghanistan would involve a political settlement with the Taliban gradually took hold. Meetings started in 2001 after many years where the Taliban were denied a place in reconciliation efforts. Afghan peace process - Wikipedia It is hard to believe that such a long negotiation was meaningful. Arguably it only strengthened Taliban resolve.

The US under President Trump agreed to a troop withdrawal by 2021 – the Doha Agreement of February 2020. President Biden actioned that.  

A sad sequence of events.

Saturday, January 02, 2021

I have noticed, particularly in the past year, writers - and often social media posters - throwing in Maori words into their contributions. Now I quite often use Maori salutations, particularly when writing to people who are Maori, or when responding to people in institutions who are making an effort to be bicultural and use them when writing to me, or when I am opening some spoken contribution. I am not talking about those uses. 

Some Maori concepts and the words for them have been borrowed into New Zealand English because they were useful. I am thinking of Tapu and Mauri for instance. There are others that could be gainfully added. Nothing wrong with that - it is to be encouraged, enriching our English and cross-cultural understanding.  Recently I have been trying to render vowel length in names correctly using macrons and reflect it in how I say place names.

What I find odd is scattering words into NZ English as equivalents for perfectly standard words in English 
Kai for food 
Moana for sea 
Awa for rivers 
Whānau for family 
The list is long. Does the substitution add anything? People doing it are still writing sentences in the structure of English. Visitors or new arrivals here must find it an additional barrier. 

I am a poor student of languages. In a lifetime of mostly living here I have picked up quite a few Maori words and have some delight in their appearance in place names, but I have not gone beyond that to learn the language and I do not consider using them as substitutes in English sentences as having some sort of merit. 

There are many proverbial sayings and expressions in Maori. Know some and listen to formal speeches and they pop out - borrowing those into writing can help understanding. There are several about adzes - a tool much studied by archaeologists and I have used these proverbs on occasions. 

Real virtue would be learning the language. Random word replacement in English sentences is I suggest not. 

Tuesday, December 29, 2020

Listener Jan 2-8 2021: 

 “Miranda on the Firth of Thames commemorates a Royal Navy warship whose guns were fired on the Māori settlement of Pūkorokoro in 1863, Few tears would be shed if the Geographic Board decision to rename the locality Pūkorokoro-Miranda resulted in Miranda falling into disuse.” 

 The Listener describes it as having a “discomforting historical association”. 

 Well let’s not defend Grey’s invasion of the Waikato, of which this was part, but a name in long service has other associations that it acquires. 

 The name derives from the character Miranda in Shakespeare’s The Tempest and this ship was the first of three ships so named: HMS Miranda - Wikipedia. Like many of the military here she had earlier served in the Crimea. 

 Miranda is not just a locality – there is a cemetery, a hall, two roads and Miranda Hot Springs that bear the name. The shorebird centre has adopted the dual name change – but that seems the only instance. The troops on the assault built a redoubt – called Miranda Redoubt – still there.
What should it be called if Miranda is to fade away? It would simply be nonsensical to call it anything else and certainly not after the village that the troops bombarded and assaulted. 

 My old colleague Ian Barton has published a fine piece on the history of the use of the name: THE TREASURY Miranda. 

Last but certainly not least is my wife Miranda. Her ancestors owned land in the area in the 1800’s, sold on some of it and lost the last part in a bankruptcy in the great 1890s depression. Their descendants recycled the name. 

To us tears would be shed and we will not be falling into disuse! Names matter and contrary to the Listener they do not have singular associations fixed in time.

Sunday, November 08, 2020

Yea Biden!

The end of the Trump presidency will come as a relief to many New Zealanders. Will that end have a return to the normalcy of international relations that we might have seen as settled 10 or 20 years ago? It is unlikely.

Biden may have won an easy majority of the cast votes for president, but the Democrats did not carry much with him in the other national and gubernational races.

The beliefs that underpinned Trump, of 

• disillusionment with elites perceived as disconnected from everyday issues,

• the perception that America was being disadvantaged in international agreements, 

• America was overly relied on by others in geopolitical tensions, 

• dissatisfaction with the decline of earnings in the rust belt, 

• fear of socialism, 

• belief that corruption was rife,

• fear of the ‘other’ overwhelming the ‘now’ – immigrants, protestors, anti-police, green zealots, non-whites.

- are all still matters in political play in the USA. The slight change in the makeup of the congress just reinforces this. America is not suddenly different.

If these political issues remain then why did Trump loose? What is personal to him is the poor corona virus response and his lying persona. It is not hard to see these as the crucial matters.

Who might marshal these other matters in future? Trump is allowed a further turn, perhaps one of his family – dynasties are not uncommon in the USA. Perhaps someone from the present Senate.

The Republicans are not so silly that they will not carefully scrutinise where their potential for growing future support lies, so expect messaging to adjust to that.

One can see there will not be a vast step change back to internationalism by America.

Where does that leave a small nation like us, who have long felt comfortable being closest to the USA on international issues? As well, as a strong supporter of internationalism, which gave the opportunity for enhanced influence beyond our small numbers, minor economy, and a location of little strategic importance, where does future influence lie?
What we should do:

• Welcome reengagement with the USA on international issues but make it clear our usual position is sustained; that unconditional support is not what we are about,

• Work with like minded nations to strengthen international institutions, and especially work to the removal of any big power vetoes over their operation which have been so misused by Trump and could be by a future president,

• The big international issue is climate change – before all else. Get the US reengaged,

• Engage with Australia at a moral leadership level. They do not respond well to being told what to do, but well to inspiring examples.

Friday, August 28, 2020


Last year when we were all in shock from the horrific events in Christchurch I heard the perpetrator had put a manifesto on-line. I found it (I did not look for the video). I read the first page – and recognised it for what it was and did not bother to read any more.

I recognised it because I had read its like 50 years before – Mein Kampf – speed read over an evening when I saw it on the bookshelf of a place I was visiting. What struck me then was how mundane most of that book was. He expressed his frustrations with the outcome of the war and how he and people like him, were a victim of others. Its appeals were to some accepted truth, common prejudices and common sense, defined as his opinions.

Back then, 50 years ago, some people in social situations would seek to identify you with them by the most outrageous racist statements and jokes, expecting your agreement or at least tolerance of the statements. Racist ‘common sense’ opinions could be heard around many work lunch-room tables at least among men. Some of it was directed at Japanese (though I doubt many had any direct experience of them) – more often at Maori. Fortunately there is less of it now, and it is tolerated less.

Hitler had no intellectual power in his arguments – many were common-place – mundane. His book did not epitomise evil as I had expected it might. Nazism was what evil men could do, or lead others to do, through political action, if enough people accepted the erroneous premises on which it was based.

So back to the Christchurch perpetrator, was he mad? No – he could not have planned what he did if he was. Was he evil? - Yes. Was he frustrated?, did he blame others for his and his self-identified group’s situation?, was he seeking to inspire some sort of redemption? - all of that. Was he narcissistic? – I probably didn’t read enough, but his behaviour in court ……..

His manifesto was taken down and it is a banned document in New Zealand. See here for the reasons:

I did not read far enough to come to parts about justifying the particular attack and encouraging others to do the same. I do not object to people reading Mein Kampf – it was educational for me. Perhaps the Censor is justified in treating this differently:

“He said while the screed would not have persuaded the vast majority of readers, it was not written for them.

"It was written for the small number of readers who are already on the pathway to violent extremism. Sadly, that small minority of readers could well be impressed by the example set by these vicious atrocities.

The perpetrator was Australian. I am a citizen of both places. There has been little public recrimination over his origins, in the pleasant small town of Grafton NSW – though post-sentencing there is some call for him to be repatriated, which may have some origin in seeking some national blame. Overt racism is sometimes more apparent in Australia than New Zealand, but in both places there is institutional racism, inadvertent racism through not challenging stereotyping, failure to call out overt racism. Ardern famously said of the victims – They are us. If we look at the perpetrator, he could have come from either country. Whoever he circulated amongst while he was here failed to call him out. He is also us, a much less pleasant realisation. He is ours to deal with what ever the cost in dollars may be - and populists: be silent.



A neighbour was discarding old books a few weeks ago

I picked up a bundle and took them home. One I recognised, despite the loss of its cover and the first 20 pages, as a Coles Funny Picture book, an Australian production common in both countries, which I remembered from my childhood. From the content I judged this one to be from around 1900 to 1910. Jingoism, imperialism and racism were all on display.

See – I would guess this book is a No2. Version whereas in the 1950s I was reading Version No. 3. The 1950s version may have imprinted some of its stereotypes on me. No. 2 was my mother’s generation.

Here is some defence of the books and their original author: not all bad perhaps.

A common defence of racism is it was just a joke - not. It is no longer a funny picture book.

I would never put this edition in the hands of my younger grandchildren. There are some charming illustrations in it, but I will be binning it.

We have come some way in the past century.

Saturday, June 27, 2020

One view: Statues aren't our history. They're our archaeology.

An opinion piece worth a read.

My bit:

Statues were erected by democratic processes - let's respect the process and decide if they come down that way too.  Certainly there are some that are obnoxious enough that their continued exhibition should be challenged. But let's also think where this might be going - location names, street names, sites and buildings, books?  It might be a slippery slope.

Statues are part of our streetscapes and names of our history, or at least the history identified by some of us. Anyone who has had the experience of trying to erect public art knows it is a fraught process, so perhaps there is a case for 'one for one'. 

The default location proposed for unwelcome statues seems to be museums. Do museums deserve that?  They are not required to be the places to exhibit or explain our past colonialism, racism, imperialism, patriarchy, though the existence of more than a few have some connection. They may at times choose to do that explaining, but then only with objects that they chose, not those foisted upon them.

But let's not get too upset with a bit of paint. It is not a very imaginative protest, though certainly an affront to some. In art affront it is rather passé -  though now a long tradition. Graffiti is a form of debate. It is removable - and repeatable, which is not the case with a statue removed, by decision, or by iconoclasm.

Sunday, April 26, 2020

Level 4 to Level 3

Our daily new cases are back to a level we last saw in early March.

Our current cases are back to the level we last saw in late March.

Our deaths while sad are at a level below other serious health challenges and all the latest seem to have been source traced.

Ongoing testing is not revealing unknown cases.


We still have a trickle of new cases and while they mostly seem to get traced back to source the concern is that our earlier tracing and isolation efforts did not isolate the pathways and end them before there were new cases.

Our borders can never be absolutely impervious. Some returning New Zealanders will carry the disease.

Ongoing broad based testing can never be enough to eliminate the existence of the virus in unknown sources.

It’s a tricky virus, quite infectious and infectious before symptoms, and in some people infectious with very few symptoms.

We are an island without immunity in a world with far more potential sources of new infections than when we went into level 4.

Level 4 has reset the clock back to where we were in March – not fundamentally eliminated the risk.

A new sports event, or a wedding or social function with a single source of infection, radiated out to the community, or worse through another cycle of like events, could easily have us back to hundreds of cases, and back in level 4.

A vaccine and its delivery are not short term prospects.

“Zero Tolerance” rather than elimination sounds like a political reorientation – and it probably is – but certainty = elimination is a tall and probably unrealistic order.


Forget about large social / spectator sports events.

Social distancing is a new norm, for a bit longer yet.

Do not hold out for international travel outwards. But there is at least a prospect of an ANZAC bubble, perhaps with Niue and the Cook Islands. (Go the ABs? (ANZAC Bubblers))

Inbound tourism and sports exchanges are a very distant prospect (with the ANZAC exception maybe).

Inbound students may be possible with quarantine – but that has a cost, may be unwelcome to potential students and would need to be coordinated with Aus.

Airfreight may be constrained for quite a while. (Most went in cargo holds below passenger aircraft decks, and all-cargo aircraft are hen’s teeth right now).

We and the world are going to have a big financial hit.


We need to keep up border restrictions, testing and case tracing (even if we have seemingly a lot of tracing capacity just waiting).

We need to work hard on identifying what we can do here to benefit from our effective control of the pandemic here by being good risk managers for future levels 2 and 1 and the timing of the transition to those levels (… and push back against precautionary principle mongers. That is risk aversion not management).

Saturday, November 16, 2019

Philip Jew died this week aged 90. He reported to me in the Auckland Regional Council structure for a few years. He was a person of enormous energy and integrity and the emergence of the ARC Regional Parks as one of its great achievements was in very great part down to him.

The time we worked together was the aftermath of the "New Deal" political era where the territorial local governments had been trying to limit the functions and powers of the ARA. While there was money for running the existing parks there was none for new ones and no political will for even strategising where they might be, let alone using designation powers to acquire them. Phil had existing parks to develop and he was good at stretching funds to get as far as he could with them, perhaps not always quite where they were budgeted, but always to the general intended effect. His skills in managing countryside parks mixing pasture with existing and new indigenous vegetation was considerable. I see few others that are done as well.

While he had been formerly second tier in management it was a reflection of the lesser importance some politicians put on parks that he moved down to third tier, but my privilege that he was given to fit under me in the structure. I don't know what he thought of reporting within an engineering centered structure but I think he recognised my love of Auckland and its landscapes, and someone who had visited enough of the great botanic gardens of the world to be at least sympathetic to them.

We acquired a couple of additions to existing parks during that time, buying adjacent land. Phil was well aware where opportunities might arise and adept at developing political will when they did, but it was all opportunistic.I thought he should have an explicit strategy about where to go next but he pushed back. Perhaps he was right - it was not the time. While it was not written down at that stage, later when the opportunities to again purchase new parks arose under his successors the effort went to places that I am sure he would have been happy with.

Others in my position might have reduced his political contact to that more common in third tier, but because he was good at it, it was risk free and more than that, essential to keep the political support that Parks needed to succeed. Skeptical committee members turned into supporters under Phil's influence. His budgets I had to support upwards and they were always adept

I gave him my opinions on the Botanic Gardens - which were politely received. I have no idea if they had any influence, probably not. I argued that the proposed rose trial garden was too big and would take too much staff effort to sustain. It is now smaller. I certainly pushed on better attention to cultural heritage and with an eye to what was to happen with the water department catchment lands coming to parks, raising their skill levels in conservation. I hope my more personal advice on preparing for retirement, taking leave, less 'low flying' in the ARC car and that you could do some things other than 12 hours a day 7 days a week work on overseas visits, all had some good effect. He was an awful delegator and I don't think I cured that.

At his funeral I found out he was a lifelong Roman Catholic as well. I never knew it. It was never on his sleeve, but it was consistent with his decency, integrity and honesty.

Not many like him - It was a privilege.

Saturday, February 23, 2013

Solid Energy
Extraordinary how people latch on to the wrong idea. Since the announcement that Solid Energy is in financial trouble it has been a consistent message repeated by many, is that part of their problem is that they made bad investments in green energy. In the next breadth Southland lignite is mentioned. Nothing to do with Southland lignite is green. The very best green news that there could be about Southland lignite is that it is going to be left in the ground. Sadly the near demise of the firm and the consequent loss of jobs may be what it has taken to get there.

Wednesday, February 20, 2013

Eden Park

The change of control at Eden Park is a welcome move, but it is not enough. The pre-World Cup arrangements where the site was supposedly run independently were always a farce. Three times to my memory the Trust had to be bailed out by Auckland City. Strangely the City seemed to tolerate this and never forced a change of control.  The Government in funding some of the stadium upgrade for the World Cup insisted on appointing a majority of the board. Now it has handed that right back to the Auckland Council.

The decision to use Eden Park for the World Cup was a controversial one but it was the best option. The many temporary seats installed for the event lessened the risk of over-investment but still the stadium is overly large for almost any purpose – the chairman of the time spoke of wanting to leave a legacy – well that is it.

Auckland has a somewhat ill-matched collection of stadia but the Council is showing willing to prioritise what is spent where and what is played where. The Council is the guarantor of a substantial loan taken out by the Eden Park Board. The stadium barely breaks even and does not cover its depreciation. Is there another bale out on the way ? – well probably.  Was the control transfer to avoid the Government being called on for more funds?  It is hard to imagine the Government would have been sympathetic in its present circumstances. It could have easily said no with little embarrassment or consequence, so it was probably more to get the responsibility where it should be.

How that responsibility should be exercised is the question – the transfer is unfinished business. Auckland Council should have the Trust wound up and assume direct responsibility itself – through its regional Facilities CCO would be best. That ways we can see the stadium is put to its best use, stem any more legacy projects and reduce the moral hazard of the Trust operating off an implied guarantee from the Government or the Council. 

Sunday, January 13, 2013

Water Businesses
The reported move by the Government to consider consolidating local government water business into a lot fewer entities is to be welcomed, not least as it shows it has not spent its reformist bent in creating Auckland Council.

Watercare is indeed a good model to start with, for it shows the benefits of scale, focus and business-like disciplines, lead by a commercially experienced Board. There are like Australian water businesses that could be compared – some with quite different regulatory settings. Water is a highly capital intensive business and the best results only emerge after decades of good decision making on capital projects – so while there are some immediate gains on offer, the best may only come in a stable regulatory and governance environment where good long term decisions can be made. It is the business environment that needs careful consideration for what has worked so far for Watercare may need some further consideration before being applied elsewhere.

The claimed advantage of the ability of a larger business to pay for the cost of upgrades in neglected areas, or in servicing new areas is a dubious one. Heavily cross-subsidised services ferment poor investments.  Nor would greater use of private capital be a very likely outcome of a new industry structure. It is not precluded now. It is not popular here or in Australia simply because the cost of private capital is higher than public capital and the benefits of competitive design, construction, maintenance, operation and of combinations of these, have already been taken up by the industry with little more a private long term capital provider can add. Nor is this change cost and risk free to local government – they will have legacy costs of shared systems no longer used by the water businesses, like call centres and they will lose the abilities of the transferring staff in application to things like civil defence and other Council services. Some staff who enjoy the wide range of council work and the public interaction resulting may find the change unattractive. Councils too will not welcome service area decisions being separated from themselves, for water services can be a powerful driver of land development which has a myriad of other costs to a council.

The environment then: There is no public appetite for privatisation of this service – it should be excluded. But placing businesses in the ownership of multiple local governments in their service area can lead to weak governance. The owners may well be divided on what the new service area boundaries should be, conflicted on capital investment priorities and little experienced in holding a water business to account on customer service performance.  In this environment customers may be substantially disempowered, for their historic route of complaint through their council will be much less effective. There needs to be a stable expectation on financial performance.   The one applying to Watercare of no dividends and cost moderation is one option but there are others that could be considered. Allowing or requiring a return on new investments, at a modest level aligned to the inherent low risk of the business is worth consideration and it may increase the discipline on boards. The regulatory environment for taking and discharging water is pretty much indifferent to structure so this is no impediment. The health requirements may seem to be similar but local government has been an effective lobbyist in resisting drinking water quality improvements, so removing their direct role here might not be a bad thing.

The sort of settings that have applied elsewhere or in other utilities include state assumption of ownership (surely to be avoided), regulatory setting of a suite of performance measures and public reporting against them, regulatory setting of performance measure targets to be met, these set for each businesses, regulated control of service area boundaries, reporting and vetting of asset management plans (a key investment planning tool), customer charters setting service standards subject to regulatory approval, customer ombudsmen and regulated customer councils to help give customers some voice. Regulated price control is another step. However if one puts all these in place then the environment is exactly aligned to privatisation. That switch should not be made to be too easy. We should simply not regulate to this extent but rather give careful consideration of each of these. Analysis of the natural pressures on business will show some are unnecessary. Alternatively some can be left as threat, for no business welcomes regulation. With prices I believe the pressures on publicly owned businesses will be sufficient that the owner’s community interest will suffice and price regulation can be avoided.  Surely though some of these regulatory roles will be needed and where needed, the Government needs to consider where these powers will lie. There is no obvious current agent.  There are some pretty heavy regulation models available. Too much of that and the businesses will become focussed on their regulators rather than their customers – usually a bad outcome.

There may be a case for allowing inset private reticulation providers say in new development areas to give some competitive pressure but the settings to allow this are more complex again. A general power to place and access pipes would be needed rather than one which currently lies with local government. This would be analogous to other utilities and perhaps would not be a bad thing. The case for price regulation of such a private inset service provider would be strong for the service remains a natural monopoly.  As well the consequences of the performance or financial failure of such a reticulator need to have been established and be fair to the regional public business, which will be the provider of last resort.

The Government has a challenging task of analysing these options and then convincing the public of the answer. Some degree of consultation along the way might in the end speed the process, for there is a reservoir of distrust to be overcome.

Tuesday, October 30, 2012

Paul Moon: Water spirits wend way to Government's door - Opinion - NZ Herald News:
"...the demands placed on New Zealand rivers for most of the 19th century were so slight that the impression left was that there was plenty of water for everyone's needs, and probably always would be."
Comment: - Not so. There was early legislation to control the use of water for mining purposes. Rights and disputes were settled in mine wardens courts. Some rivers in mining areas were declared to be reserved for disposal of mine tailings - trumping any other uses of the river. There was early conflict over use of rivers for rafting logs, an action which destroyed Maori fishing stands - again the legislation was used to resolve use rights.
A professional historian should have known better.

Friday, October 19, 2012

Waitangi Tribunal and Water Ownership 

When the Waitangi Tribunal found the Maori retained a residual interest in the ownership of water it was to no-one's great surprise. To some it was a matter of “well they would wouldn’t they” but the reality is that historically Maori made a fairly broad use of water consistent with their culture. That use was an expanding one up until the New Zealand Wars, including the use of water for energy to drive flour mills. Subsequently Maori use was infringed, particularly in the disruption of indigenous fisheries and in ignoring the identity many Maori have with lakes and rivers. The Tribunal finding then was no surprise – its timing though is much more a matter of opportunity caused by the Government’s latest asset sales.  The proposed sales are not unprecedented. Contact Energy was fully privatised in the past and took into its ownership several hydroelectric assets once Crown property.

The Government’s public response seems to be limited to insisting no-one owns water and to only consult with Maori on the Waitangi Tribunals views. Strictly that may be true that no-one owns water but in some cases it comes pretty close to ownership. Contact Energy no doubt values its hydro plants on its books – but what would they be worth without the water use consents to operate them? Alternatively picture two farms with similar soils – one with water use consent for irrigation and one without – which farm is worth the more? The value of water use consents then is already capitalised and it is traded on capital markets. Sure the use rights can be modified or even cancelled but the regulators are rightly reluctant to do that without very good cause, because of the economic consequences. So no-one owns water? – No, but.  Simply put water has a very substantial value to its users, often far beyond any price they pay. Where a price is charged for water witness how little water use varies with price. The inelasticity of use with price reflects water’s large real value to its users. Very large parts of our community have an interest in using water commercially and recreationally. We do not have any history of resource use charges. We must be alarmed when such are in prospect, particularly if new interests have the opportunity to seek rents without limit.

Our modern law seeks to separate who regulate water from those who use it. It is a tradition going back to the gold mining days of mine warden’s courts. Increasingly the state has reserved to itself the rights to decide maters to do with the whole water cycle within catchments and beyond, where the infrastructure has allowed that. That is not to say it has always done it well. Until recently there has often been scant attention to cultural values and sometimes too little attention to recreational and environmental values. Never the less that control is fundamental. The consequence of the sort of private ownership of water that occurs in many US states is entirely unfortunate for those other values. As they say: ‘water flows uphill to money’. We should want none of that. Some are saying Maori owning water would look after it better than we have to date – but they are also users and have aspirations to use more. They will end up totally conflicted – it is no answer.

If change is in prospect the whole community needs to be consulted, not just Maori. We are all interested. Mr Key has a mandate to partially privatise some state assets. The mistake of his predecessors on the foreshore and seabed issue was to rush ahead – not just say ‘let’s pause for a cup of tea’ and talk about it.
Dame Anne Salmond has pointed to some sage advice about managing assets of the public domain. They align closely to what has been happening in the Land and Water forum and are worthy of consideration. Mr Key should have a pause for that cup of tea and then could usefully put some limits around the current debate, along those lines. He could say that:

  • The matters raised are an issue for the whole community and any changes need broad discussion,
  • The Government will continue to take the lead role in regulating how water is used, or left unused including considering cultural, recreational and environmental values,
  • No holder of a water use consent will have it infringed within its term, for the purpose of recognition of Waitangi rights and
  • The separation of regulators and users is a fundamental that will be retained.

Does that leave room for Maori aspirations to have past wrongs on water to be addressed, for Maori views to come into regulation and for water use by Maori? – In my view yes – but they are not all matters to be fixed by placing them “in the one pocket”.  That may not be compatible with some views of Maori sovereignty. So be it – we are one nation.

Wednesday, March 14, 2012

Survey shows mine water programme is working |

OECD report 'shows now is time for action' over water quality |

Wednesday, March 07, 2012

Water vital resource and key to health | Columns

Government Puts $800,000 Into Wainono Lagoon Clean-Up... |

Monday, March 05, 2012

Crown asks tribunal to dismiss SOE sale claim - National - NZ Herald News

Sunday, March 04, 2012

Radio New Zealand : News : National : Storm disrupts power and water supply

Further steps to improve NZ's fresh water |

Plant slammed for continued sewage dumping | NATIONAL News

Friday, March 02, 2012

Lack of action will cost water consent holders |

Tuesday, February 28, 2012

People key to success - small-business - business |

Saturday, February 25, 2012

Water storage may mean rise in Ashburton River levels

Friday, February 24, 2012

Huge economic spinoffs from water storage

Manawatu River quality not worst |

Sunday, February 19, 2012

Fracking the new 'nuke-free' - national |

Friday, February 17, 2012

Water tower closed on earthquake risk fears |

Is NZ sustainable in global market place? |

Thursday, February 16, 2012

Wairoa man saving rivers from pollution | NATIONAL News

Wednesday, February 15, 2012

Smart water meter generates its own power - FierceEnergy

River report hailed by conservationists | Otago Daily Times Online News : Otago, South Island, New Zealand & International News

Tuesday, February 14, 2012

Water quality to decide Transmission Gully fate |

Farmer adaptation to change with the threat of regulation | Scoop News

Public Ownership of Energy Companies and Water | Scoop News

Monday, February 13, 2012

Drive for more water from Lake Coleridge

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