Out and about, one of the more frequent comments I hear is: ‘C’mon, money’s cheap. We should be investing big time in infrastructure’.
Most people in Auckland can see that high levels of congestion and ageing infrastructure are holding back the city’s productivity and increasing the cost of doing business.
Meantime, sitting in traffic reduces our quality of life, as do creaky wastewater and storm water systems that foul our beaches.
The previous National Government significantly ramped up investment – think of the Waterview Tunnel, the City Rail Loop, now under construction, the electrification of the trains and the roll out of Ultra Fast Broadband – but we should be turning up the dial.
We’ll make progress if we do three things:
- Develop a long-term infrastructure pipeline that doesn’t chop and change all the time
- Focus on reducing the cost-structure of infrastructure provision in New Zealand, so we can get more for our money
- Innovate with funding mechanisms, so we’re relying less on Crown and council balance sheets.
On the first, sadly, we’re going backwards, particularly in the transport space.
The Labour/NZ First/Greens Government’s major action has been to cancel or postpone a dozen major transport projects - several of which were ready to go - and replace them with projects that are not ready to go, and won’t be for some time to come.
We would be progressing work on the East West Link (connecting motorways from the Mangere Bridge at Onehunga with the Southern Motorway at Mt Wellington), on Mill Road (a second main route south of Auckland), the next slice of the motorway north, from Wellsford to Warkworth – as well as some critical public transport jobs, such as a third rail line in Auckland to allow freight to move without disrupting commuter trains.
Instead of those road projects (and many others) the Government favours a slow tram down Dominion Road, which is yet to have any detailed design work or go through procurement or consenting processes.
So over the next couple of years there will be less investment in infrastructure. Budget 2019 showed over $3 billion has been shaved off projected infrastructure spending since predictions made just six months earlier.
This has been driven by ideology – a point blank refusal to build new roads. Phil Twyford, the Transport Minister, believes the country has ‘overinvested’ in roads and his Associate Julie-Ann Genter talks of not giving in to ‘car fascists’.
Ideological lurching links to the second point; reducing the cost structure of infrastructure provision. One of the best ways to get more bangs for our bucks is to have a clear, long term pipeline that can attract global players to compete and encourage all players to invest in skills and machinery.
The lack of infrastructure projects in the pipeline today will lead to much of our construction capabilities moving to Australia.
Reform of the RMA and re-assessment of some of the other regulations that are adding huge costs to projects in New Zealand is, of course, also critical. If the current government presents sensible suggestions we will support them.
As for innovation in funding, the previous National government made some progress with PPPs, SPVs and other mechanisms – think of the Transmission Gully project; Milldale’s housing development, as well as schools and prisons. We want to go further here.
As a country, we’ve been too conservative in the past. We’ll be open to funding innovation where it gets quality long-lasting infrastructure built more quickly.
It’s time to lift our aspirations in infrastructure so we can get on with things.