Bill English’s 30-year plan

The Kremlin used to write 5-year Plans—at the end of which they would admit that the last five years was not exactly a total success, but rest assured that the next five years would be glorious. Five years later, that same announcement would be made again.

The Kremlin’s planners have now moved to Wellington and appear to be writing Bill English’s speeches—for he has just announced an exciting Thirty Year Infrastructure Plan, that “sets out New Zealand’s response to the infrastructure challenges we will face over the next three decades.”

This would be something like the Auckland motorway network, which although planned for the world of five decades ago will only near partial completion in the next (like the Russian five-year plans, there is little flexibility in government planning once begun), and which has helped New Zealand enjoy among the worst traffic flows in the modern world.

As Andrew Galambos famously observed, the traffic jams we observe are the the result of a collision between capitalism and socialist planning: capitalism builds cars quicker than socialism build roads.*

But never say that a small country with a big govt like ours can’t over-underachieve in planning for tomorrow what might already be obsolete yesterday.

So. “Infrastructure.” Last year government spent nearly four billion of your money on transport infrastructure alone. Over the last five years they’ve spent over twenty billion. This was just part of their quiet plan to pump “stimulus” into the economy and, not incidentally, help elevate all construction prices. They achieved the latter; of the former, there neither is nor could be any.

Oh, and they borrowed every cent of those billions, and are borrowing still.

And now, with Bill’s new 30-year plan, they boast about spending $110 billion in the next ten years—every cent of which will, no doubt, be added to the present $100 billion debt mountain (and climbing) that Bill English continues to build up.

Can I get a Hallelujah?

A while ago I made some excellent points (if I say so myself) that public "investment" in infrastructure:

1. sucks capital away from profitable private investment; and
2. since real infrastructure investment repays the investment whereas public investment doesn't, the lion’s share of government spending on infrastructure is always and essentially consumption spending.

To say nothing of what government-borrowing to pay for deficits does to further bid real capital away from businessmen and entrepreneurs -- the ones we actually need to grow the economy. Nor of how little government planners today know about the world in which we’ll be living in 2045.

Six years ago almost to the day, when National began this conceit with a grandiloquently-titled 20-year Plan, Liberty Scott called it for what it was then and still is now in its current incarnation: another Muldoonist Think Big scheme, but with asphalt.

And even six years ago in their 20-year plan (the 30-year plan simply being that last plan plus inflation) they were talking of being “comprehensive” and “bold.” Of twenty-year plans and multibillions of borrowing.  Of “leadership” and “co-ordination.”  Of wisdom and clear direction. Oh, and of things like their long-promised and little-delivered ultra-fast broadband (which we might have already enjoyed by now if govt hadn’t crowded out would-be providers) and of “the growing price of oil” –which, let’s face it, is just another example of how governments can’t even pick losers, let alone winners.

Scott’s post deserves re-reading just for his many examples of earlier government planning failures.

Mind you, those ones didn’t cost as much as this one will.

Even the cost of government failure has risen.

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* Or even cycleways. Look at this as a small case study: the Wellington to Hutt Valley cycleway, about which “over a century ago, when cycling was a main mode of transport for many urban New Zealanders, there were Parliamentary debates over what should be done to improve the road for cycling, and working bees to remove sharp objects from the pre-existing gravel cycle path. However, nothing much got done…” Because that’s generally what happens –i.e., what doesn’t happen -- when building anything must begin with a parliamentary debate. Nothing much. And what’s happened here is that cyclists have waited a century for a cycleway that’s really not one.