A review of things you need to know before you go home Monday; mortgage rate changes; migration; overseas visitors and travel; Peter Dunne quits; teacher numbers; regional road rail; local rates up; NZD stable

The maintenance of the narrative: benefits claimants are inherently suspect, because if they were better people they wouldn’t be on benefits. You have to watch them like hawks, and if you spend more money on surveillance than you could ever save from the detection of the fiddles you lie awake imagining, so be it – our own Department for Work and Pensions sanctions system is fantastically expensive, a fact of which the government seems perversely proud. Read more

SV and DC - Labour's Regional Rapid Rail (R-cubed) announcement actually stems from a volunteer-compiled proposal from Greater Auckland here:
https://www.greaterauckland.org.nz/2017/08/17/introducing-regional-rapi…

I commented on this (as Wayne Findley - yes, my cover is blown) to the effect that their costings were too patchy and would be picked to pieces by financially competent common taters.

The full proposal is here https://drive.google.com/open?id=0B9EZXXytda8uaHhwTWVoRGxZM2c, but what I want to highlight here are two replies: 1) from Patrick Reynolds:

This is an unfunded schematic proposal designed to stimulate properly funded market analysis, technical feasibility, and economic benfit cost studies. The question of how much detail to go into was hotly debated; basically you’re damned if you do and damned if you don’t. It absolutely won’t be perfect, but we hope we have struck the balance near enough to lead to much more in depth work. Which frankly requires more than the hard work in our spare time….

And 2) from Nick R:

Wayne, you’re not wrong. This is a first cut overview, not a fully resolved business case (Might I remind you we are a zero-budget volunteer organisation with only so many late nights and weekends at our disposal!). I would fully expect Treasury to demand all stages of the business case process before funding anything.

We certainly haven’t got this estimate perfectly right, but it’s right enough. I have full confidence that for $400m of capital investment we could get a well functioning rapid intercity rail network that covers it’s operating costs on a day to day basis. It might not look exactly like this, but it would be more or less like this.

However, we have intentionally planned a low overhead business model, and we don’t need to fund a lot of the things you have mentioned, e.g:
-The salaries for non-crew staff are based on the assumption that the operating company is part of a larger organisation (i.e. Kiwirail or NZTA, or an international consortium). Note that Stage 2 has opex budget for about 12 management/office staff in addition to the train crews, and excluding the depot staff which are accounted for separately.
-The crew salaries and schedules are based on only 1800 in-vehicle hours per year per crew, this accounts for leave, training, sick days etc.
-No ticket booths or access control, tickets are inspected or purchased from the train manager onboard, if not prebooked online for checking.
-No park and ride as part of this scheme: Park and ride is the responsibility of local councils, who would decide if they want to fund and build them near the stations. Same with bus stops actually, although the cities with bus systems already have bus stops at the proposed station sites.
-Lighting, disabled access and handrails are included in the station build costs. They will be very basic to start with, but will meet code. No separate toilets at stations to build and service, the toilets will be onboard the trains (disabled accessible, naturally).
-There is an allocation in the capital budget for track upgrades, including passing loops. $200m in stage 2 in fact. Note that almost all of the NIMT line is already double tracked, so it’s just the ECMT that would need additional passing loops (or lengthening existing ones rather).

This would indeed be an Interesting topic to dig into (but just be gentle on the Greater Auckalnd crew, they are earnest and I suspect tender souls, unused to the cut and thrust of politics, and certainly financially naive...).

The point is of course that Labour have adopted (at $20m) an estimate which is unlikely to survive the beady eyes of more experienced analysts. I surmise they've had a quick read of the estimates and the blog, thought 'here's a winner' to judge by the comments there, figured the estimates were shonky so doubled them (GA's opex needed $2m, capex $9.6m just for the pilot), and rushed it into the election cycle.

But any sort of a non-pilot service is gonna need (from GA's estimates, Stage 2) closer to $0.4 billion. Which, using Labour's logic, should be doubled so what the hey, let's say $1 billion. A billion here, a billion there, pretty soon it adds up to real munny......

Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi will be among the officials addressing this year’s installment of the annual conference hosted by the Kansas City Fed. The summit, held at a Jackson Hole mountain retreat, comes as central banks in advanced economies creep toward the policy exit after years of unprecedented easing, even with outlooks are clouded by stubbornly tepid inflation.

Prices have been slow to pick up despite solid growth and falling unemployment, suggesting that the long-observed relationship between inflation and labor-market slack might have frayed. That puzzle will likely surface as the conference debates this year’s theme of “Fostering a Dynamic Global Economy” against the backdrop of the Grand Teton mountains. Read more

So oveseas visitor numbers up to 3.7 million for the year. This means that unrecovered costs from providing them with publicly funded health care will now be in the order of 220 million annually. Capturing their insurance details at the border and matching this with healthcare received is essential and will eliminate the current public health funding deficit of the same amount. It is not right that the private insurance industry is being subsidised by public health this amount

The other change that has been made is that South Auckland campus of Auckland University of Technology will be allowed to offer the Bachelor of Education qualification from the start of 2018, making it easier for South Auckland trainee teachers to become qualified.

Excellent - now you can qualify as a teacher by "pulling hard" on a Christmas cracker.

This govt don't get it. No one in their right mind would teach in Auckland for a measly $47k - you can entice as much as you wish - you simply won't attract good teachers to the area unless they're young 25 and happy to share a flat/bedroom/ cupboard with 10 others.
Even those on the top of the scale $76k would see it as financial suicide.

"You know it makes sense Rodders" doesn't quite cut it.

Rail only works in heavily populated areas, think countries of 20 million inhabitants plus. It just costs too much to run half empty trains, it will be an endless money gobbler