Bernard Hickey talks with Marcus Lush on Radio Live at 6.50 am about the uselessness of trains; the worsening Eurozone crisis and the problem with section prices

Bernard Hickey talks with Marcus Lush on Radio Live at 6.50 am about the uselessness of trains; the worsening Eurozone crisis and the problem with section prices

Bernard Hickey and Marcus Lush talk every weekday morning just after 6.50 am about business, economics, markets and personal finance.

Every weekday morning just after 6.50 am I talk with Marcus Lush on Radio Live about the latest news in business, markets, economics and personal finance.

I usually send through suggestions the night before or earlier in the morning. Sometimes we veer off into other areas or pick up on things that happen overnight.

But here's my suggestions as of 6.30 am the night before. I'll update later on Friday with a link to the audio.


1. It's time I outed myself. I am a passenger train hater. I commuted to work for four years via train in London and it eventually drove me both mad and then away from London. Maybe they can be made to work and for a reasonable cost. But I doubt it's in Auckland. We're much better off using buses and cycling. I'm serious about the cycling. I cycled up from the waterfront to Eden Park on Friday night. Perfectly calm. Arrived on time. Cost nothing. No congestion. Veolia is now in a world of pain and so are the respective Auckland councils because they relied on trains. See more here at NZHerald.

2. The section price situation in Christchurch is now a crisis and should highlight to others around New Zealand the problems we now have with artificial rules ramping up section prices. Here's the latest protest in Christchurch. See more here at Stuff.

3. Greece may be about to default. Germany is preparing to bail out its banks after they write down the value of all their assets that will be affected by such a default. The crisis in the Eurozone is building to a head. A key member of the European Central Bank resigned in protest over bond buying on Friday night. The eurozone is under enormous stress. The Dow fell 3% on Friday night. It means slower growth, high unemployment and lower interest rates for longer here. Luckily for us, our banks are not exposed to Europe in any major way.  See more here at Bloomberg.


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#2, section prices.

Really, the govt could make matters better for everyone by relaxing zoning laws  and releasing land for sections.  A big plus for the govt:  it would then be able to help close the colossal hole in its budget through making revenue from the windfall profits via its capital gains t....

Oh sorry, I forgot we're allergic to that in GodZone

Forget my silly comments.  I was thinking we were in Oz, US, UK or some such benighted place.

Cheers on a lovely sunny Monday morning

#1. I really don't understand why moe people don't cycle in Auckland. It's usually faster than taking a car in rush hour.The hills aren't that big and the weather is better than (say) Amsterdam. You do have to keep your wits about you but that is because motorists aren't used to or expecting cyclists. If there were more on the road it would become less dangerous. Parents won't let their kids bike to school because of the traffic so they drop them off in the SUV instead.

FYI from a reader Troy via email:



There was no reason to scare everyone into using public transportation. People were so burned using public transport during Game Day that they are NOT going to use it for the next game. Also there was so much overreaction to the amount of peopled driving into town that except for the Waterfront and Eden Park the rest of Auckland was deserted. It was as if the city was under monitory evacuated.




You need to move one of the Jumbo-Trons to the park next to the Fish market. There were too few people at the end of the new district. The first two bars and restaurants were packed but the last two and the fish markets were empty since nobody was walking down that far. There was no anchor to drive traffic to the lovely park area and all the rest of the bars and restaurants.

Also, you might want to use those Jumbo-trons to display a schedule of events so people in and around that area knows what is going on!


Eden Park:


Eden Park desperately needs temporary signage. But large post with international singes for bus and trains to show which direction to walk in to grab a bus, taxi, or train. Also, the signs need to have the gate letters on them to show where the gates are. Having people stand inside the stadium grounds, with bullhorns, directing traffic will not work since not everyone speaks English. This is an international event!!

Also, there was an overabundance of Police at Eden Park. Someone could have when on a minor crime spree around town and the police would be helpless to react. I would scale down the police presence at the stadium and send them to other areas of the city.


Local businesses:


Since Auckland was essentially evacuated there were too many people at the waterfront. Since the waterfront only has a capacity of about 5000 people the organizers need to setup temporary screenings in other areas around Auckland to help disperse the crowds and more effectively support the local economy. There could be projectors in Ponsonby, Newmarket, etc. showing the game and helping disperse the crowd around town and ensuring that they will have place to go to spend money and celebrate. I estimate that since the rest of Auckland was so deserted since people were too scared to drive into town it probably cost local business millions of dollars since everyone stayed home.


In short opening night was a total overreaction and an organized quagmire!

1. Certainly these days no parent would let their child bike to school. Not even here in Christchurch. There are too many cars on the roads. I do think a dedicated cycle way is the best idea but one that is quite separate from the footpath and the road. In Montpelier they have a footpath with bollards on the edge, then a step down to a two lane cycle way with bollards on the edge of that, then another step down to the road. Parking was only permitted on the other side of the road. It looked pretty sensible to me.

Relaxing zoning and development rules will result in cheaper sections?

More profits for developers and builders: yes. Cheaper sections for punters: not a chance.

If Christchurch has a lesson for us, perhaps it's that we need better zoning rules and most certainly some building standards that aren't considered a joke by the international engineering community.

[Note that I didn't say more rules, I said better rules.] 


Most of the opportunistic developments proposed at the moment feature sections priced at $200,000 for a small site to close to $275,000 for a larger 800m2 site say.

This is insane.  For instance in Kaiapoi, near one proposed development (about 700m away) you can buy a 10 acre block for about $300k incl GST.

Literally thousands of existing sections will become available in the city as soon as insurance woes are sorted.  There is absolutely no way sections could be developed cheaper, unless someone talks a bath once they complete their developments and find few sites have sold.

Sure, we should allow some more land, but anyone thinking supply is the only problem does not understand the economics of land development.


#2 -  The risk for ChCh isn't more earthquakes, it's that the current crop of politcians/civic leaders and the thinking they espouse do not adapt. I see little sign of them adapting.

Maybe this is what the reinsurers were thinking when they met Gerry Brownlee and the NZ delegation in London. They may have considered that rain for instance is a known risk and occurs with certainty. It is a problem for houses built in a way (to inadequate code/regulations) void of method to minimise the risks associated with rain. They may have considered the same about lightly regulated's, explosive atmospheres arising in coal mines, etc, etc. Seems ironic that Gerry Brownlee is hoping for a market solution from them, when misguided over-faith in the market and the call for deregulation, etc, has had a large causative influence in creating the problems we now experience. Earthquakes in ChCh were not and are not the real problem, as evidenced by some of the links provided on this site in the recent past. The risks are well known and can be contained. The problem is inadequate government and governors, here in England's southern most Home County. I think on aggregate they actually perform worse than the County Council of a sleepy shire - and if I was a reinsurer I'd weight my premiums accordingly. Wouldn't you?

#1 - why the surprise?

 Yes - Brownlee should be sacked too underperforming – in fact a long time ago (Pike River).

Again – when government grow too big (influentual) – conducting million$ investigations on the base of their own failure. When do we make them accountable ?

Les, absolutely correct.

I had a valuer out this morning, and he told me that CERA had approached them for proposals on the best way to determine values before the red zone announcement.  They had given several different solutions, all of which were totally ignored.

It seems that there is a "we know better" mentality.  They don't.

Building owners wanting to fix buildings in the CBD are told they can't and CERA then bulldozes them.

Home owners are told that being paid your arbitrary government valuation is fair.  It just isn't.

At the moment there is an absolute war between individuals defending their rights and government trying to control everything.

Are we in China?  Perhaps we are.  The government that favours individual freedoms has become the party of ultimate rule.  Recently the world earthquake engineering expert Kit Miaymoto quipped along the lines of: "no other country in the world would force a mass abandonment because of a little liquifaction ... except perhaps China".  He is right, what was John Key thinking?

I am a true National supporter.  They have betrayed us.  They have abandoned their principles.

Fairness was easy to acheive.  Offer market value.  Every property is being valued independent by the private insurer anyway.  Instead we see some get offered $100,000+ more than what their home was worth while others are offered $100,000+ below what theirs is worth.

Fairness would have cost no more.  In fact the buyout should not be a cost to Government.  The vast majority of losses are insured.  And there are the physical buildings which are worth hundreds of millions of dollars if dealt with correctly.  Of course the land that is left is of value as reserve land too.  And then there's all the infrastructure that can be salvaged too.  (Wally is probably salivating at the thought of all that copper cable scrap).  Then add in that the council doesn't have to repair the infrastructure.  Plus they can charge more development levies on new sections which they couldn't if they repaired the old ones.  So in all this is a much cheaper option than fulfilling their insurance options.  Yet they determine they are fair?

National need taught a lesson.

That lesson needs to come in November.

TRUE National supporters VOTE ACT.

Middle of the road National supporters, vote for whoever you like, just DON'T vote National.

It may not be enough to lose John Key the election, but if the message is sent, that your performance is not good enough, and it leaves National without a majority they may realise running roughshod over civil liberties can cost you an unloseable election.

It's dismal. ChCh is NZ writ small, sadly - many with the hearts of lions led by a few with the brains of donkeys. I was quite positive after the quakes and tried to help anyone I could get perspective, fight their anxiety and blues by appreciating what we have left, rather than becoming deeply negative and soley concentrating on what has been lost. (Recall I posted a few links for stories of manufacturers in ChCh bouncing back as best they could.) The losses cannot and should not be ignored, of course, plus I didn't think recovery and rebuild would be plain sailing. However, the negative effect of the losses seems to be getting compounded day-by-day with the way they are being handled and managed. As I say, it's dismal, and discouraging to see it.

A retired senior politcian once told a few of us at a CMA meeting, that he could see the benefit of policians having some senior management and leadership experience before going to parliament. He mused that it might be a good idea to require new entrants in parliament to have a minimum time in such roles. I quipped and filled the room with laughter, as I suggested:

"It'd probably be better that they demonstrate a minimum IQ first."

Dont forget, Illegitimi non carborundum.

Cheers, Les.