Councillor Morrison is angry

Wellington.Scoop
Derogatory, offensive, pathetic, nasty, intimidatory, threatening, gutless and spineless.

Whoa! Councillor John Morrison is angry. And why? He’s telling the DomPost what he thinks of being sent a package pointing out that the costs of Wellington’s next big roading projects would be far greater than any economic benefits.

Not that he has anything to say about the message. It’s the messenger that has annoyed him. He’s angry because the package was sent by a group called the Economic Illiteracy Support Group. And it contained a children’s numeracy instruction book.

Councillor Jo Coughlan also received a package. She seems a little less certain about whether she should ignore the financial issues. “Probably not worth taking any notice of,” she says. Has the message registered with her, even slightly?

Last month, Wellington.Scoop published a media release from the Economic Illiteracy Support Group. It showed a commendable amount of good humour at the same time as it advanced its economic arguments against the Wellington roading plans.

And it was kind to the nine councillors (including Councillor Morrison) who’ve been defending plans for new roads:

“It’s apparent that these councillors need our support and advice rather than the criticism they have been receiving in some sections of the media. As should be obvious to all concerned, the roading projects they’re promoting are a complete money-waster and will destroy hundreds of millions of dollars of economic value for the region. However that’s not the important issue right now.

“The nine councillors are suffering from an easily-identifiable but debilitating condition – economic illiteracy. The most basic numeracy skills would have demonstrated that spending a dollar and only getting back 40 cents – as these roading projects do – was a dumb idea. So it’s clear that these councillors need every assistance in learning what a benefit/cost ratio is, what that little minus sign in the benefits column actually means, and how they can avoid looking like idiots in the media.

The Support Group may be anonymous, but it has its own website, where it shows an admirable level of sardonic humour, such as has escaped the angry Councillor Morrison. And this morning, the website says: “The one thing that he didn’t say was that we were wrong.”

TOP: This book is one of the favourites of the Economic Illiteracy Support Group. It may or may not have been in the package which has so annoyed Councillor Morrison.

Read also:
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21 comments:

  1. erentz, 10. May 2011, 10:46

    This is classic, well done to the people behind it. But the response shows why it’s so difficult to make any traction – these Councillors will not be rational about the matter. No matter the avenue you take to try to get the simple mathematics across, these Councillors will still ignore the message. It takes a rare kind of person to say 1+1=3 with a straight face, and we have nine of them at the reigns of our city.

    Let’s be clear, in case John reads this and gets his feelings hurt: You have the choice to say “I agree that these road projects have a terrible cost/benefit ratio and are a terrible investment, and that the $2 billion dollars would be better spent on other much needed infrastructure projects in the region that have a better business case, such as X or Y, but in lieu of the Government deciding to reverse its position and invest the money more wisely, I would rather see it spent in Wellington than spent in Auckland.”*

    * Note: This last part is actually still not a sensible position for Wellington or the country as it only makes it more difficult to get sensible investment downtrack, also as a whole the country suffers and so therefore does our city when such massive amounts of money are sunk into investments with negative returns.

     
  2. Laura Newcombe, 10. May 2011, 19:37

    Councillors – if you take away 9 car parks at the Riddiford Street heritage centre, and reinstate 3, how many are missing? You owe this city that values our heritage the whole 9! Give them all back!

     
  3. Mr windy, 10. May 2011, 19:57

    It’s great that this landed on the front-page of the DomPost! Well done to the anonymous group behind the effort in actually getting the issue in front of Wellingtonians’ eyeballs.

     
  4. Jamie, 11. May 2011, 3:42

    Re cost/benefit ratio figures, eight Councilors displayed an inability to analyse and evaluate these for the Manners Mall fiasco, so why would they be any better now? Having had 31 years in the maths classroom, I’d be willing to help them learn how to use a calculator and maybe also learn to apply some analysis, logic and valid deductions in the process! [Abridged]

     
  5. Nora, 11. May 2011, 13:55

    Just another “Mystery” to Morrison!

     
  6. Confused, 11. May 2011, 15:25

    I had a look at the economic illiteracy web site. I was disappointed not to find any reference to the source report that has the 0.4 benefit cost ratio they claim for roading projects.

    One would have thought that a web site that also claims to be “an organisation dedicated to improving the quality of public debate about economics in New Zealand politics”, would carry more than the group’s members’ (assuming economic illiteracy is more than one person) opinion and (often tongue-in-check) links. Where are the facts ?

    Can Erentz, Jamie or anyone else tell us the source report for their ongoing claims that roading projects in general and/or the Basin Reserve roading projects only have a 0.4 Benefit Cost ? I think it will add to the debate and their credibility.

     
  7. @ Confused: The NZ Transport Agency have done everything possible to obfuscate the numbers on their website, which is why we didn’t bother inserting a deep link. To be able to make any sense of the numbers, you’ll need to download and read your way through 166 pages of jargon-filled PDF, all 3.5 MB of it. The link is here if you’re interested:

    http://www.nzta.govt.nz/resources/rons-economic-assessment-2010-05/index.html

    The 0.4 cost/benefit payback comes when you look at the stated costs of the Wellington city projects versus the claimed economic benefits, assessed according to the NZ Transport Agency’s Economic Evaluation Model (EEM). This model is largely fictional and bears little resemblance to real life, as it ignores cost elements such as the loss in local property values from having large roads and flyovers built next door.

    However the economic assessment for the Roads of National Significance has been made even more hilariously inaccurate with the creation of “Wider Economic Benefits (WEBs)”. These are the economic equivalent of fairies at the bottom of the garden, and in some cases amount to double-counting the already very tenuous benefits claimed in the EEM.

    You’d think that in a rational world, the NZ Transport Agency would have a web page for each project it’s running, with the costs and the benefits clearly listed and able to be understood by the taxpayers who are being forced to stump up with the dollars, but unfortunately we don’t live in that rational world … which is why Steven Joyce is Minister of Transport, Gerry Brownlee is dictator of Christchurch and Kate Wilkinson is the Minister of Conservation.

     
  8. Confused, 11. May 2011, 18:16

    Thanks to the Economic Illiteracy Support Group for the link (and for such a quick reply!).
    Actually, I don’t think I could read my way “through 166 pages of jargon-filled PDF”, especially from the NZTA. As you have already read the report, can you please tell me what page has the 0.4 benefit cost figure for the Wellington Roads projects ?

     
  9. nick, 11. May 2011, 22:19

    I couldn’t find the cost benefit value, but there’s something else interesting looking through that document: there is a section on the wider benefits of RoNS and they talk about the fuel price -

    “The oil price is as difficult to forecast as the price of carbon. We defer to the comprehensive discussion and analysis in NZTA (2008) which shows a number of projections for the price of oil in 2028 ranging between US65/bbl and US$230/bbl, with an average of about US$115/bbl (all in 2008 prices). We assume a price of US$105/bbl in 2020, en route to US$115/bbl in 2028.”

    So they think in 2028 the oil price will be $115 a barrel? (Is there something they’re not telling us?) Right now it’s $117 a barrel. If we’re heading for $4 a litre petrol, then its certain there will be less cars on the road, not more! Possibly more concerning for the benefit ratio is that road freight will become more expensive, and it will be more efficient by rail. Just so long as there’s funding to keep our rail lines open eh.

     
  10. @ Confused But Too Lazy To Read The Material: We know it can be difficult to understand this stuff – we’re in the business of supporting the economically illiterate, after all – so we’ve summarised the material into nice easily-digestible chunks. We hope it helps.

    The overall costs and benefits of the Wellington Northern Corridor are summed up in the SAHA report we linked to earlier, but given it does require some reading and analysis the best idea is to read the opinion piece provided by Dr Michael Pickford, the former chief economist at the Commerce Commission and now an independent economic researcher. This was printed in the Dominion Post:

    http://www.stuff.co.nz/dominion-post/comment/4825016/Think-Big-expressway-projects-questionable

    The relevant parts of the SAHA report from which he drew his conclusions are nicely summarised on the Auckland Transport Blog, which reproduces the table that show a net benefit of the entire Levin to Airport link as only 0.6:

    http://transportblog.co.nz/2011/03/30/top-economist-questions-rons/

    Focusing on the roads in the immediate vicinity of Wellington city, the numbers are summarised best in the Ngauranga to Airport Corridor Plan Technical Report 3, available from the Greater Wellington Regional Council (yes, inevitably it’s a PDF) and written by Opus Consulting:

    http://www.gw.govt.nz/ngauranga-to-wellington-airport/

    Rather than expecting you to read it or anything equally complex, we can point you to Table 7.2 on page 58. This summarises the benefits over the next 25 years as follows:

    Basin Reserve = $80 million
    Mt Victoria Tunnel, Ruahine St & Wellington Rd = $125 million
    Terrace Tunnel = $5 million

    This gives total benefits of $210 million over the next 25 years. The estimated construction costs are then listed in Table 73 on page 59:

    Terrace Tunnel Duplication = $170 million
    Mount Victoria Tunnel = $175 million
    Basin Reserve = $35 million
    Ruahine Street to Airport = $45 million

    This gives total construction costs of $425 million. If we then use the simple mathematics outlined in the kiddie books and the calculator with the big buttons which we sent to some of Wellington’s more intellectually challenged councillors, we arrive at a benefit/cost ratio of 0.494 … or to put it in less technical language, if you Wellingtonians go ahead and build these roads, you will have summarily pissed $215 million against the wall.

    We could go on and on – about how the geniuses at Opus Consulting thought that oil prices would rise only 25% by 2026 (and not by 30% in a single year), how the construction costs are only estimates and the 95th-percentile numbers are anything up to $700 million (at which point the BCR would be a truly pathetic 0.3), and much more. But I suspect your eyes would have glazed over and we would have exhausted the patience of the kind Mr Shelton.

     
  11. vryn evans, 12. May 2011, 10:55

    That’s the wonderful thing about freedom of speech, but those who hide behind nom-de-plumes and anonymous groups somewhat tend, in my opinion, to dilute their subject matter. Incidentally, did the mayor and deputy receive the free gifts like some other councillors ?

     
  12. Jamie, 12. May 2011, 12:44

    Vryn. They certainly should have. There may be some Councilors (though I’m not sure who they might be) who use appropriate research, analytical skills, logic and deduction, tempered by common sense, especially as what they do has such an impact on the ratepayers whose money they’re using. But to play it safe, all Councilors need to receive help (and calculators).

    I have a now-retired friend who spent most of his working life at the very senior level in Councils including the WCC. His point was that most Councilors have little or no knowledge or qualifications on most of the matters on which they make decisions and spend masses of our money, so they rely heavily – and at times exclusively – on the assessment, advice and recommendations of Council Officers like the elsewhere-mentioned Teena Pennington, assuming, often wrongly, that these Officers are experts and know what they’re talking about.

     
  13. Pauline Swann, 12. May 2011, 16:56

    Having sat through three hours this morning at the Wellington City Council’s S and P committee meeting, where the only really good presentations were those made by members of the public, I have to agree with Jamie. Once again I repeat that if more ratepayers attended these meetings , very few of our elected members would be returned.

     
  14. @ vryn evans: It’s a bit difficult to see how being an anonymous group on the internet “dilutes the subject matter”. These are the costs and benefits as detailed by Opus Consulting, the Greater Wellington Regional Council and the NZ Transport Agency. All we’ve done is highlight the fact that they exist, but have been ignored by economically illiterate councillors. If you want to question the credibility of the numbers, you’ll need to do that with the organisations that developed them, not us.

     
  15. Ian, 13. May 2011, 12:12

    Note to TEISG – read Jamie’s comments. The WCC bureaucracy runs the council, councillors are highly paid window dressers!

     
  16. ViV, 14. May 2011, 9:17

    Ian, how right you are. I’ve said this on many occasions in the past and quite bluntly, but it keeps getting edited out, especially when Bryan Pepperell is criticized.

     
  17. greg, 15. May 2011, 0:02

    it’s called innumeracy, illiterate

     
  18. Keith Flinders, 10. June 2011, 11:58

    Anyone standing for any council should be tested for their economic literacy and disqualified if they fail. Here is another example of the WCC’s ability to waste rate payer funds:

    The Tee intersection of Cottleville Terrace and Grant Road recently had painted on it several white arrows and lines. The very next day the white paint was over painted with black. Yesterday both the black and white paint were water or sand blasted from the surface. Never mind only an estimated $7500 worth of ratepayer funds wasted.

    This intersection would be lucky to see 15 cars an hour during the day.

    I asked the WCC roading chair, Cr Foster for an explanation before the paint removal, but thus far have had no response.

     
  19. Laura, 10. June 2011, 20:49

    Keith, I sent Cr Eagle an email today and he responded immediately.
    Cr Foster could be out on a run or a bike ride.

     
  20. Jamie, 10. June 2011, 22:39

    Keith, your comment is only too apt and appropriate. Most Councillors and many of their highly paid officers are lacking in relevant knowledge, experience and understanding to deal with the millions of our precious rates dollars, despite any ‘paper’ qualifications they may claim. Sadly, even Councillors and officials who may have some of the above have proved over the years that this is not accompanied by realistic and practical commonsense! But do you think they would ever admit it? Of course not.

     
  21. richard maclean, 13. June 2011, 9:58

    Mr Flinders I’ve just seen your email. Yes one of our staff made an honest error re the markings at Cottleville Terrace. It was spotted by a more senior staff member and the markings were removed. The cost was in the region of several hundred dollars, not $7500.
    Richard MacLean
    WCC External Communications

     

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