Peter MacDonald
For more than a century New Zealanders built a railway system for the public good. Generations of taxpayers funded it, maintained it and relied on it: a national asset designed to serve everyone, not just those who could afford a ticket at premium tourist prices. Today that vision is gone. What we are left with is a fragmented, restricted system whose most visible ‘passenger services’ are now private excursion trains selling nostalgia back to the very people who paid to build the railways in the first place.
This shift is not an accident. It is the direct result of a political and economic model that dismantled the public good ethos and opened the door for an oligarchic system, where select private groups inherit guaranteed profits from infrastructure built by ordinary New Zealanders. Passenger rail, once a common right, has been boxed into a tourism commodity.
And this pattern stretches right back to the founding era. William Larnach didn’t painstakingly earn the Catlins forests: he was effectively gifted vast native timber blocks by political allies. He hired a cheap labour force that lived in rough tents, felled the forests and created immense wealth for him alone. Public resource for private gain. From the very beginning, that has been the underlying economic story of New Zealand.
What happened after 1984 was simply the modern, corporate version of the same playbook. Public good systems were dismantled and sold off: rail, energy, telecommunications, ports, forestry, banks, airports. Assets built by taxpayers over a century were transferred to new ‘stakeholders’ who had contributed nothing to their creation. Those who bought them or who were positioned to benefit from corporatisation saw enormous gains. The public, meanwhile, remained responsible for maintaining, subsidising or eventually bailing out the remnants.
This model mirrored what happened during the breakup of the Soviet Union in the 1990s. Oligarchs seized state assets, privatised entire sectors and became billionaires almost overnight. After leaving office, Roger Douglas worked as an international consultant. In early 1992, he travelled to Russia and took part in a World Bank organised privatisation advisory meeting, consulting on economic and structural reform. This illustrates the export of New Zealand’s neoliberal economic ideas abroad, without implying any direct implementation by Douglas himself.
The only difference is that Russia eventually pulled back. When Putin came to power, he jailed or expelled many of the oligarchs and they fled to the UK and other sanctuaries. New Zealand, however, never reversed course. The oligarchic framework stayed in place. We kept the costs, while private groups kept the gains.
And now our railways illustrate the final stage. Recently, a new long-distance passenger service, the Mainlander, was announced, connecting Christchurch, Dunedin and Invercargill. Scheduled to begin in January 2026, the four-day journey includes overnight stops and is aimed at both locals and tourists. The service is operated by the privately owned Rail and Tourism Group, with ticket prices set at $229 for a one way trip from Christchurch to Dunedin and $449 for the full return. While mayors and local leaders have praised the service for potential economic and tourism benefits, it is limited, premium priced and infrequent, clearly designed more as a tourism experience than as a public good commuter or regional transport option.
The Mainlander illustrates exactly the pattern we’ve been seeing for decades: infrastructure built by taxpayers, now monetised and packaged as a luxury or leisure product. The public maintains the tracks and the system, but everyday affordable rail for Kiwis is gone. What remains is a controlled, nostalgic experience for those willing to pay, while the majority rely on buses, cars or planes.
The business model is simple: run limited seasonal services for cruise ships, tourists, and leisure travellers, keep supply low so demand stays high, fill every carriage, enjoy low overheads and minimal maintenance responsibilities, charge New Zealanders premium prices to ‘experience’ what they used to have as a public right.
It is profitable because the system is deliberately restricted. When you limit access, nostalgia becomes a commodity. And New Zealanders, longing for the days when rail served everyone, pay again for what their grandparents already built.
This is not simply a transport issue: it is a national pattern.
The railways tell the broader story of a country where the public carries the cost indefinitely, while private interests capture the profit reliably. From Larnach’s forests, to the 1984 reforms, from the Soviet sell offs to today’s tourism trains like the Mainlander, one theme runs through it all: public cost, private gain, repeated across generations.
Until that cycle is broken, New Zealand will continue losing the very systems that once held the country together, and paying a premium to access what we already own.
Post Note: New Zealand’s entire national rail network, the tracks, bridges, tunnels, signalling systems, and the rail corridor land itself is publicly owned. The land is held by the New Zealand Railways Corporation (a Crown entity), while KiwiRail, a state-owned enterprise, owns and maintains the physical rail infrastructure. Taxpayers fund the renewals, upgrades and long-term maintenance. In short, the entire system used by private tourism operators was built, paid for and continues to be maintained by the New Zealand public.
What makes this even more appalling is the sheer absolutism of the corporate-welfare model underpinning it. The private tourism operators running premium passenger services don’t just profit from taxpayer-funded infrastructure, they profit because they avoid the cost of maintaining it. KiwiRail and the New Zealand taxpayer shoulder the ongoing expense, while the operator extracts revenue from the same asset at virtually no infrastructural cost. It mirrors the behaviour of large trucking companies that tear up state highways yet contribute nothing toward repairing the damage. New Zealand has developed a cultural phenomenon where government and ratepayers funnel money hand over fist to corporations that double-, triple- and even quadruple-dip the free use of public infrastructure, taxpayer-funded maintenance, preferential tax treatment and the ability to sell the resulting service back to the public at a premium. It is corporate welfare disguised as economic development and it has become the norm rather than the exception.
