New Zealand should have a no deal Brexit plan ready


29 March 2019 is a day that many in Britain are probably looking at with increasing alarm/excitement/curiosity. It is a day that will potentially define the career of British Prime Minister Theresa May. It is a day that will be the culmination of nearly 3 years of roller coaster Brexit politics.

It will be – for better or for worse – the day Brexit happens.

It might also be a day that New Zealand businesses, politicians and diplomats are looking at with increasing interest/curiosity/excitement as well, albeit for different reasons. On that day or in the days following, New Zealand like the rest of the world will either see a peaceful transition to Brexit with politics, economics and society continuing about its business, or a messy one akin I am honestly not sure what New Zealand can do since I do not think British diplomats are any more informed than their political bosses as to the potential fall out should a no deal Brexit occur. But for the sake of this country we need to know what the likely scenarios are, draw up a list of potential sectors that might be subject to adverse effects and consider what support they might need.

Right now to me the metaphor about a canary down the mine shaft is hard to ignore. In this case Britain is like a canary that is going down a mine shaft which will shortly diverge in multiple directions and choosing the wrong one might result in Britain being in a shaft with carbon monoxide or methane.

But before Britain reaches the mine shaft junction, there are a few things that can potentially save them from a chaotic problem filled mess:

  1. Perhaps foremost is the ruling of the European Union court that Britain can exit the Brexit process unilaterally if so desires. That means provided enough politicians come together to make it possible, Brexit would be abolished and Britain remains in the European Union. The one very big catch here is that the hard line Brexiteers would fight tooth and nail to prevent something like this happening. Also Members of Parliament from electorates that voted to leave, but whom personally realize the need to stay would be in danger of being outed at the next election
  2. Whilst running out of time to make one happen, there seems to be considerable movement in support of a second referendum.
  3. Let us suppose just for a moment that British Prime Minister Theresa May does somehow manage to stumble, fumble and bumble her way to a deal that survives Parliament, would the voting public accept it or reject it

There are also Brexit deadlines that have to be met if none of the above can happen:

  1. UNKNOWN is the day for the rescheduled U.K. Parliamentary vote – it was meant to happen on 11 December 2018
  2. 21 JANUARY is the final day for Mrs May to send a deal to the U.K. Parliament
  3. 29 MARCH is the day that Britain formally exits the European Union

Mrs May has challenges. Can she muster 320 or more M.P.’s in the House of Parliament to get whatever deal is sent to Parliament for the vote, over the line? If she cannot and given that the U.K Parliament will probably rise soon for the Christmas break, how long will she have after it resumes and before the 29 January deadline to present something to Parliament does she have?

But back to New Zealand and our readiness for Brexit in whatever form it comes. Yes we should have a look at the potential flow on effects for New Zealand, especially if it cannot reach a deal with the European Union. Yes we should definitely expect turbulence in the days afterwards either way in the markets – the N.Z. Dollar might abruptly drop or rise.

Lessons from Europe and Singapore: Tourism – Part 2


Continued from Part 1.

Generally the old town quarters of Ghent, Brugge and Ypres was cleaner than you would expect to find cities in New Zealand. I do not know what litter ordinances any of these places had in place, but little evidence of litter was found around them. This is important for all three, as tourism is a significant part of their economy.

Belgium towns have a lot of bars and cafes with a different culture to New Zealand. Namely if anyone drinks alcohol – and I did see a lot of people doing so – they would generally order something to eat as well. It could be something simple such as fries or a proper meal. All of them are bike friendly, and one could hire scooters for several hours or a day. Canal tours of various descriptions existed and seem to be well patronized.

The Hop on/Hop off bus is a well developed concept in all of the big cities – London, Stockholm, Goteburg, Brussels, Amsterdam and Singapore all have their own versions. The number of routes varied from one location to the next – Brussels had two lines – the No. 1 and No. 2 lines; Singapore has the Red, Brown, Yellow and Blue lines. All operated a pass system where one purchased a pass that would give them access to the network for 2-3 days or 5 days. It was an easy way to get around the city. The European cities also have a “_______” (enter name of city) City Pass that gives you access to the major attractions. Like the Hop on/Hop off passes they were set to last 2-3 days or 5 days.

I do not know if such passes exist in New Zealand, but it would be an easy way to ensure tourists used the public transport networks if it was too difficult for them to hire a rental car. In Auckland for example an “Auckland City Pass”, might include the Sky Tower, Auckland Museum, Auckland Zoo, Kelly Tarlton Sea Life Aquarium and so forth. The Hop on/Hop off route would have no trouble covering all of those in a reasonably quick time.

One thing that was notable in European cities was their charge for using the toilet. Many public places charged and I assume it was just their way of funding the up keep. Given – even if it was not necessarily said so – that it was polite to purchase something in the bars, cafes and restaurants that one would find themselves ducking into to relieve themselves, it did result in some otherwise unintended beverage and food purchases. On the other hand the bars, restaurants and cafes that I/we ducked into were not so fussy but we repaid them by having a round, a small bite or something whilst on the premises.

Given in some districts there is a small rate payer base, but high tourist numbers, such as the Mackenzie District in the South Island, a 0.50c fee for using the toilets would not be out of place. It would enable the charging council to keep a tighter rein on council rates as user pays would be a fairer model than simply making the whole district pay. With the summer tourist season coming up and local government elections due again next year, it will be interesting to see whether councils think about such approaches or elect to make the rate payers cough up more money.

Lessons from Europe and Singapore: Transport – Part 1


This article and the next few following it, is based on my experiences from a recent holiday in Europe.

One of the first things I did upon arrival into London was be shown how to ride their transport system. My mate Dave who has been living in London with his wife met me at Heathrow Airport. He made sure I had an Oyster card, which would enable me to ride on the buses. Each day Dave and I got a ticket from Maidenhead into London Paddington railway station. From there we either went walking or used the Oyster card to get on the bus network. Both seemed to be well used no matter which direction we went.

Integrated light right/bus platform at Skansen, Stockholm. (R. GLENNIE)

But it was in Sweden, in Stockholm and Gothenburg that I was able to see a well organized rail and bus system at work. I was able to experience the fast train from Stockholm Arlanda, which travelled into the central city at 180km/h and took about 20 minutes. It was also amazingly quiet inside. From central station it was just a short walk to get onto light rail going in all directions or the buses, which shared platforms with the light rail (see photo). Again, all seemed to be well patronized. I could buy a pass for several days which expired shortly after I left.

Could such systems work here? In Auckland I think the population is big enough that a scaled down system could, but there would need to be a change in the mindset. It would also need to overcome reliability and supply (capacity)problems that still need work done on them. It would need to look at Gothenburg whose population is around 1.5 million, rather than Stockholm.

Wellington has a well used railway system as it is. I am not sure that other than improving what already exists, and being a city of 400,000 people I am not sure that the demand for a larger more comprehensive network already exists. It would be challenging given the city’s geography essentially confines development to two distinct corridors.

What of the South Island cities?

Neither Dunedin or Christchurch are big enough for this sort of planning. Where Christchurch’s strength lies is in its bus network, which is a work in progress. Badly damaged in the earthquakes and let down by some poor planning decisions a spoke and rim network similar to what already exists, but with wider reaching bus services, is the way to go.

Dunedin is further compromised. Its population of 120,000 might be strengthened by a core bus system with an exchange along its one way street system. Its hilly terrain, which includes the steepest street in the world (Baldwin Street) means limitations exist in terms of geographical layout options.

The rise of petrol prices, caused both by taxes being introduced and high international tensions is not likely to bring any relief at the petrol pump any time soon. Whilst biofuel has potential, it is likely to be a complementary source instead of a replacement for petroleum and political reluctance to invest in such sources is slowing its introduction down. That only serves to prolong the pain in peoples wallets.

Lessons from Europe and Singapore


Over the next few articles, I am going to share with you a few things I learnt whilst overseas. I had experiences that helped to enrich my understanding of the world around me and realize that whilst New Zealand does very well in many aspects of life, there are some we can learn from – and can teach others about.

I have just returned from four weeks in Europe, during which time I visited the U.K., Sweden, Belgium, the Netherlands and had a brief foray into northern France. Aside from having a nice holiday and test driving some very nice Belgian beer and comparing our drinking habits with theirs (another article) and seeing all sorts of fascinating tourist attractions.

On the way back to New Zealand I stopped for a few days in Singapore for my first visit there. It was a chance to see how an island city state of 5 million people – all of New Zealand’s population and about another 900,000 people on top of that – get on. I will focus on  tourism, which is the core of Singapore’s economy and examine the challenges and opportunities that such a small nation faces.

Over the course of the articles I will cover public transport in major cities, as I stayed in several large European cities. They included London, Brussels, Amsterdam, Stockholm and Gothenburg. I will explore the tourism industries in these locations, where tourism has been a thing for periods of time longer than European knowledge of New Zealand’s existence. I will also explore living, as time was also spent staying in rented apartments in Brugge and Ypres.

 

Potential Brexit trade war bad for New Zealand


Fears are growing that a messy Brexit dissolution of the United Kingdom’s union with Europe could lead to open trade hostilities between the two parties. So great is the fear that Minister of Trade, David Parker, warned the United Kingdom and European Union against commencing trade hostilities.

Trade hostilities do no country any favours. They are the war like equivalent of two countries vying for some sort of supremacy or other advantage, except that tariffs take the place of bullets with exporters and importers being the casualties in the front line. And behind the front line, you and myself, the regular civilian consumers who can only make the best of the market conditions of the day as they can try, are the real losers. With increased costs passed on by importers, they will be more selective as to when they get out the EFTPOS card or the credit card or hard earned money that they will want to know is well spent.

The increasingly messy dissolution of the union between the U.K. and Europe as a result of the 2016 referendum has alarmed many. It stems from the desire of the two parties to divide up tariff rate quotas on agricultural products, The concerns are that this would have a negative impact on how New Zealand meat, butter and cheese gets into the E.U.

In a world with a slowing economy being buffeted by increasingly stormy conditions that exporters and importers have little say over what looks like an increasingly worrisome storm. The combination of E.U. discontent, high petrol prices due to increasing angst over the Iran deal and the desire of the U.S. and Israel to possibly launch military action against the Islamic Republic, to say nothing of a failure to address the causes of the last economic crisis all point to a potentially messy divorce.

In a part of the world where freedom of movement is celebrated by way of the Schengen free zone, people living in member nations can move freely within 27 separate countries.Would the Schengen free zone still exist in an economic sense when the issue is resolved? Would any dissolution of the zone or damage caused by tariffs affect non-European nations ability to conduct trade issues of the day?

None of this can be good for the global economy any more than it could be good for the New Zealand economy. This is shown by the number and range of countries that are opposed to the plan for tariffs. Alongside New Zealand are Canada, United States, Thailand, Uruguay and others.

Two years after that shocking June 2016 announcement that the United Kingdom would seek divorce from the European Union, the real economic costs are only now just starting to come out. And as they do, the criticism of the result whose implications probably not that many voterrs understood is only going to get louder and more diverse.

Was Brexit in a purely economic sense such a great idea now?