Q+A on the Fast Track
Last Sunday, Regional Development Minister Shane Jones appeared on TVNZ’s Q+A, with Jack Tame. The interview largely concerned the Fast Track Bill, which the government seems to be looking to re-name, as I mentioned last week.
I know the Fast Track is getting old, and I keep saying I’d like to move on, but for this geek the Fast Track saga just seems to keep giving and giving. I also had a bit more interest in the Bill from readers when they saw that Andrea Vance had picked up some of my comments on it. So Tame’s interview was perhaps just as well.
Most of us were probably doing better things on Sunday than watching public television, let alone public television about politics. What follows is Brenty’s Two Cents on what happened.
What happened on Sunday?
In brief, Jones wanted to make an economic and regional development argument for mining under the Fast Track. In support of that argument, he cited Westland / Tai Poutini regional figures about potential benefits of mining both to New Zealand and the region.
If the YouTube comments are anything to go by, Jones was not successful in making that case. His comments about rates of Crown royalties on minerals seemed to draw particular adverse attention.[1]
The overall impression, to me at least, was that Jones wanted to present an economic case for the mining elements of the Fast Track. But he held this without actually making the case. He seemed to hope instead, perhaps, that gestures towards “economic” arguments might stick as a result of colourful rhetorical flourishes, or stick due to the certainty that an economic argument might end up being plausible if one actually did the work.
It is all becoming a bit like the “kayfabe” of professional wrestling, as Eric Weinstein might put it, where it looks like there is a real battle of ideas, but there isn’t, and where the rules would be broken not by engaging in unsportsmanlike conduct, but by the surprise appearance of actual sporting behavior.
So what?
To me, raising Westland mining, and economic and regional development figures brought up a veritable explosion of questions.
For example, during the interview, there was no mention of the other justifications for the Fast Track: infrastructure or housing or electrifying New Zealand’s energy supply in pursuit of decarbonisation.
Was this just due to Jones’ limited time talking with Tame? Did it have to do with Jones’ specific Ministerial wheelhouses? Was failing to speak to these other areas a sign of respect for Bishop, or of tension? Or is blurring these different areas deliberate?
Are we starting to see a two-track Fast Track? One that is about both over-restrictive planning and non-renewable resource exploitation, whose proponents make the very same case for both, without distinction?[2] Are there multiple political motivations for this one policy tool – with some aspects perhaps more soundly-justified, as for example with over-complicated planning; and some perhaps less so, as with mining conservation land? Are we starting to see, more figuratively, a “One Stop Shop” for both politicians and would-be developers alike? And what is the normal time horizon for ideas of simple fixes?
One could go on and on. Nonetheless, given their apparent centrality under Jones’ own account, testing some of the regional or economic development questions raised by Tame’s interview will be today’s focus.
Like most YouTube commenters, I’m no economist. Nonetheless, commenting seems appropriate having noticed the low bar for unanswered questions even in this area.
For me these started when Jones repeatedly raise GST on mining exports, when these are – I gather – generally levied at 0%. Was this just a tired Jones? A tired me? Or could this (low) quality of thinking be some indication of the level of intellectual grunt behind the mining elements of the Bill? Could any comment on Westland economic outcomes be solid, in principle, without some surety as to which projects will occur? Would that not have to mean that the fate of certain projects has in some way already been decided? If so why is “the Fast Track list” still under the control the Fast Track Advisory Group?[3]. Why is the list still under wraps, with “applications” having long since closed? Why, really, not just repeat something like the Clyde Dam Empowering Act 1982. Is all this just for political security, the ability to offer the “Shaggy” excuse in the face of sufficient opposition, as I have suggested?
It doesn’t take a genius to figure out that one key part of an economic-development-through-mining case could, and perhaps should, involve a public discussion about the rates of Crown royalty on minerals, royalty distribution and so on. No doubt it’s all very complicated with trade-off’s everywhere. So why did Jones pour cold water on a royalty discussion becoming a serious part of the korero?[4]
Serious Cases for Regional Development
Though New Zealand First’s Provincial Growth Fund has had a bad rap in recent years, serious cases for and against the exploitation of resources in regional areas have been made in the past.
I recently read Graham Searle’s 1975 book Rush to Destruction. This book is a time capsule example where regional development in Westland was rigorously examined. It dealt with government proposals to log beech forests in Westland and elsewhere, and I understand it was one catalyst in the eventual signing of the New Zealand Forest Accord.
1975 and 2024: Similarities and differences
As example of what we might expect to see by way of economic examinations of resource use today, some would see Searle’s study as limited. And perhaps it is. No doubt the economic orthodoxies have changed between then and now, and many circumstances have shifted, etc.
Nonetheless, in some ways Searle’s analysis seems superior to what passes for economic analysis today. For example, it considers a far longer time horizon than the 2040 of today’s draft “Minerals Strategy” currently also being developed by MBIE and Jones. This strategy is self-described as “long term” and “strategic”, despite just a 15 year time horizon and isolation from other potential development areas.
In other ways, Searle’s analysis offers a refreshing counter-point to today’s analytical style, neither offering or seeming to feel any need to offer a false predictive accuracy. Instead he simply makes educated judgements. (In my view too few, and often just eminent older authors, point out that today’s penchant for modelled analyses tend to be junk, or at least rest on unexamined assumptions. A good example of this position is here.)
In other respects, Searle’s analysis bears out a striking resemblance between 1975 and today’s situation, echoing perhaps the “back to the future” character that so many have noticed in the Fast Track.
Take the idea of a contest about the appropriate boundaries for an economic analysis. Here, no doubt some might suggest that today’s “Minerals Strategy” represents the economic case to support Fast Tracking mining. Similar things might be said about the Supplementary Regulatory Impact Analysis for the Bill.[5] In my view both have a decontextualised quality, matching Jones own comments that there is somehow a close economic relationship between mining and other parts of regional or New Zealand economy and life, but no relationship with other parts of regional or New Zealand life or economy. Mentioning mining in the abstract, he says that “mining on the DOC estate” would represent a mere “beauty spot” affecting neither ecology nor tourism.
It is interesting to notice the resemblance in such comments to 1975, where those wishing to advance the particular development opportunity of the day were “adamant that the development of different resources should be treated as separate projects”.[6] 2024: Back to the Future indeed.
For another example along similar lines, we might take Seale’s summation of the official case to clear-fell Westland beech, and insert “mine” in place of forestry. We might then see if we recognise anything familiar:[7]
“Put simply, the [government and regional advocates’] case… is this. On the West Coast, services currently provided in urban areas are capable of catering to larger populations than presently live there, and, if additional people migrating into the area to take up jobs in [mining] were to be concentrated into existing townships, the service industries could be maintained and would benefit from better returns on investment. Expansion of [mining] could substantially reduce outward-migration from the West Coast...”
These arguments are powerful… but are based on a number of premises which it is important to understand.”
Searle’s assumptions
For Searle, Assumption #1 was that the development opportunity “made overall sense.” Assumption #2 is a low ecological impact of the opportunity. Assumption #3 is that “New Zealanders wish to continue and to accelerate their destruction of their natural… heritage” which assumption no government “could ever risk a public referendum on”.
Searle’s analysis goes on to deal empathetically with the drift of young people from regions, and the responsibility of the nation to take regional issues seriously. For these reasons he explores a number of development alternatives, including agricultural opportunities, noting perceptively that reliance solely on tourism would “cause the seasonal death of the place”. He concludes that “each aspect of proposed regional development should form just a part of an overall pattern”.[8]
What of this can we recognise today? For me, this not only sounds familiar in 2024. Instead, Jones’ Q+A appearance almost exactly recapitulates the apparent pro-development arguments in 1975, right down to over-emphasising the capacity of a single sector to deliver a durable transformation, and to a very real base concern with losing youth and vitality from regions.
What do we find if we work through Searle’s underlying assumptions, and test them in 2024?
Seale’s First Assumption
It seems to me that Jones has not made out the case for the “overall economic sense” of any specific or integrated mining proposals today, especially perhaps with respect to coal mining.
As above, we saw that Jones got little further with Tame than making an incorrect comment on GST, and clamping down on a royalty discussion. The pair did not discuss Westland coal in any depth, so we have to go to the standard rhetoric. This seems to be that “we import coal instead of using our own” and this is “crazy”. On Q+A Jones added a handful of anecdotes about mates’ mates or sons around the world who would come home to mine “in a heartbeat”.
Without commenting on the actual merits of any economic argument, in which I am no expert, one can straightforwardly see that the depths of the economic Fast Track debate have not been explored.
Even the stylised exchange about coal above – hopefully fair – seems to bury still further assumptions about the New Zealand demand for coal. Doesn’t that come back in large part to the use of Huntly? And doesn’t Huntly represent expensive power, whose use is incentivised by the New Zealand electricity spot market? What does all this say about the depth of thinking behind the climate change rationale for the Fast Track? And so on.
Very seldom has the Fast Track mining debate gone anywhere near here: a little-known example is here. And it is not even as if these warrens are academic. Not as if, for example, everyone thinks New Zealand’s energy industry is perfectly structured.
If the government’s answer is that these things should be assessed at project scale, we can notice again the echo of 1975 where pro-development proponents wanted to separate proposals from their context as much as possible (and as was standard practice through my consenting career).
No matter what we might see from a wider or longer view.
“Overall economic sense” is, remember, Searle’s Assumption #1. The above is a mere intimation of the depth we might have expected to see from the government in testing its assumption. What less should we expect of an earnest administration? But this is not what we seem to have gotten in Fast Track 2024, instead we seem to be operating on low-resolution assertions.
Searles’ Second Assumption
Searles’ Assumption #2 is the ecological impact of the development opportunity, which issues of course Jones has waved away. Again some might say this assessment is best done at project level, and of course some concrete ideas are needed for that. But leaving it to project level alone will get the different and more decontextualised view mentioned above – it would not represent earnest administration.
It will be interesting when “the list” is made public. Only then will we get to see if assumptions about low ecological consequences prove to be fair or arguable for particular projects. Certainly many projects may offer few drawbacks or a complex picture – think of gas fields to supply a “transition fuel”, or offshore wind. Inevitably these complex pictures will annoy some harder-line greens, many of whom may push the real case about industry double-talk and avarice too far.
For my part, in Westland it seems almost certain that there will not be sufficient evidence even to fairly judge the ecological impact of mining many conservation land parcels. Insufficient ecological information was a key issue when much DOC land was retained as deemed “stewardship land” in 1987, and so it remained in Westland’s attempted stewardship reclassification process, run by then-Minister of Conservation Kiri Allen in 2022.[9] Under those information circumstances, common sense and possibly the law will dictate operating a precautionary principle.
At the very least, precaution located in a permissive regime should point to a serious adaptive management conditions regime as a marker for “sensible” changes to the Fast Track. It will interesting to see if anything like this comes about.
Searle’s Third Assumption
Searle’s third and final assumption is that “New Zealanders wish to continue and to accelerate their destruction of their natural… heritage” which assumption no government “could ever risk a public referendum on”.
Surely, the situation is much the same today. Even if some would point out that a “One Stop Shop” might have been mentioned some pre-election document in 2023, everyone can see this for the threadbare claim to a mandate that it is.
The most responsible analysis in this area is Grant Duncan’s, and he presents a mixed picture – with the sure consequence that a referendum on the Fast Track or any given proposal could and would not be risked.
What to make of all this?
Standing back, then, we seem to have near-identical material contours to regional development questions in the air in the 1970s. We even have one of the same regions involved.
Searle’s assumptions might be the only ones underlying the apparent case for regional economic development by Fast Tracked mining. But they do seem fair ones. So the strength of the policy, then as now, seems to be underlain by at least three unspoken assumptions. To date in 2024, the case for making any of these three assumptions has not even been seriously attempted. It’s merely been asserted, and sometimes attempts have been made to smuggle the mining case in with entirely different, planning-based, justifications for the Fast Track Bill.
With a preference for flourish over substance, and what could only include an element of laziness in failing to make out the very case he wishes to emphasise, Jones would seem content to undermine his own project to deliver regional development.
To be clear, I’m not making an economic case against mining elements of the Fast Track, which are qualitatively different than its planning elements. I’m just saying that even to a non-expert, it seems obvious that no economic case has yet been made.
I should finish this comment by saying that my aim and hope is not to straw-man Jones’ economic argument. That would have no possibility of offering anything at all. Any serious commenter should prefer to “steel-man” Jones’ position. If they feel suitably qualified, they might respond from there.
It is only because Jones has sought with Tame and others to rely so heavily on an economic case, but declined so steadfastly to make anything resembling case, that the “steel man” move is not possible.
Conflict of interest issues come back in new way
An economic and regional development case for Fast Tracking at least certain particular mining could be made, and we have seen what some of it might look like.
This case will also need to be made if Jones wants to generate that long run investment certainty he has mentioned so often, and which is so crucial to durable regional development. Nothing less can last.
Given that a positive case is so obviously necessary and lacking, once again the door is open to look for other motivations.
Down this line, we need to make the fair assumption that Jones is highly intelligent and competent. He can even be nuanced. Given all that, one good inference is that Jones is just less serious about regional development than he suggests. Perhaps he has been led to believe in the economic case by associates, without having critically examined it?
Perhaps he is motivated more by giving the feel of making a serious proposal, independent of actual seriousness? Perhaps he is motivated more by the vote winning potential of his proposals than an actual conviction in their effect?
When the widespread sense that something is amiss, it is natural that people might ask if something else is going on. Regrettably, then, the Q+A interview seemed to show a man unwilling to seriously attend to questions about whether he may be affected in some way by his associates’ interests.
Of course actual allegations in these areas, as opposed to mere questions, ought to be reserved for extraordinary situations involving compelling evidence. Equally, no doubt Tame’s questions may have felt to Jones like tacit allegations – especially if we make fair-minded assumptions about Jones propriety.
But Tame’s questions were not allegations. Jones’ refusal to engage is regrettable because speaking legally, Ministers of the Crown ought to have an easy hurdle to clear in clearing themselves of these issues.[10] Failing to clear these issues will put projects at risk of severe delay or worse in due course – whatever the economic or ecological case for or against them. Indeed, it seems that even trade competitors would be able to try to impugn projects on these grounds, if they feel it is worth it.
Is it possible to engage with these questions? Of course it is – there are avenues that may even give Jones room for manoeuvre. If, for example, he was able to publicly demonstrate absolute hygiene in these areas, and went on to include very strict conflict of interest and transparency protocols in a refined Bill, the case for retaining Ministers as final decision-makers would be much stronger. In such a situation it would be much more convincing to suggest that Ministers can and should be the ones to take responsibility for the wide, and long-run and fine judgements called for, much like they used to be so responsible. It seems strange that Jones, one with sympathies for ideas of planning parts of the economy, hasn’t tried such a move.
That he has not only raises questions about why not.
Here again, though this time for reasons perhaps as small and personal as mere annoyance with a perception of fielding unfair questions, Jones would seem content to undermine his own project to deliver regional development.
[1] According to MBIE, royalties are levied “to ensure the Crown receives a fair financial return for the development of its minerals to the benefit of New Zealand.” New permits granted since 24 May 2013 are subject to pay royalties under the Crown Minerals (Royalties for Minerals Other than Petroleum) Regulations 2013, with an older regime for older permits. Many are set at 2% of net sales revenue.
[2] Interestingly in this week’s instalment of The Working Group David Seymour gave a great illustration of this. Speaking notionally in response to Jones’ interview (about Fast Track mining) he made a planning argument for the Bill, citing a case where a wharf extension at Port of Tauranga had proved very difficult.
[3] Information about which had to be prized out of an Ombudsman process, and many of whose members turn out be Jones’ associates.
[4] As David Seymour did on The Working Group too.
[5] See from paragraph 26. The “full” analysis has not been made available.
[6] See Searle (1975), from p 160.
[7] See Searle (1975), p 161.
[8] Searle (1975), at p 167.
[9] I wrote about this with ELI an colleague in 2022, and contributed to FMC submissions on the same. I’ll come back to stewardship land another time.
[10] See for example Back Country Helicopters v Minister of Conservation [2013] NZHC 982, at [131]-[136].