Chris Bishop: Results of underinvested infrastructure in plain sight

National Party Spokesperson for Infrastructure & Housing Chris Bishop. Photo / Mark Mitchell

OPINION:

Infrastructure is the beating heart of every modern, vibrant economy. We all depend on it for our standard of living. For a young country like New Zealand, far away from world markets, it is even more important.

But for a generation or more, New Zealand has underinvested in infrastructure, and the results are in plain sight: congestion chokes our cities, critical projects spend years bogged down in the tight grip of labyrinthine planning processes, and on an island in a country the size of the UK occupied by a little over five million people, we have managed to create one of the world’s most unaffordable housing markets.

With the next election around a year away, I want to be clear that infrastructure investment will be at the heart of the next National-led government. If we have the privilege of being elected to the Treasury benches, National will focus on five areas to drive a step change in the way infrastructure is planned, funded and delivered.

First, it is imperative we do a much better job of utilising our existing infrastructure. We simply can’t build our way out of the infrastructure deficit we have created. On one estimate by the Infrastructure Commission, closing our asset and renewal deficits would require a near doubling of infrastructure investment as a share of the economy. That means we need new tools to better use what we have already.

National’s view is that the time has come for congestion pricing in our major cities (starting with Auckland). The policy has been extensively studied both here and overseas for decades (NZIER’s first report on the subject was in 1993!) and we know that it works.

The most recent study showed that congestion pricing is expected to reduce congestion at peak times by 8 to 12 per cent — equivalent to school holiday traffic congestion in Auckland, permanently.

There are clear economic, social and environmental benefits from a well-designed revenue-neutral congestion pricing scheme and there is political consensus across the Parliament — so let’s get on with it.

Second, to help close the deficit, National will work to significantly boost infrastructure investment, which will inevitably involve broader funding tools than we have now.

We need a more mature approach to private sector investment in infrastructure. Our view is that we are too capital-starved as a country to simply reject private investment on ideological grounds. It is noteworthy that existing privately owned infrastructure (telecommunications and energy, for example) generally perform well.

National is also considering the way central government funds major transport projects through the National Land Transport Fund (NLTF). Paying for new roads out of cash from the NLTF is like buying a new house with cash rather than taking on a mortgage and paying it off over time. It doesn’t make a lot of sense, and we are open to an approach which means the Transport Agency can provide much more certainty to users and local government over investment in major corridors. We are also enthusiastic about the transition to more modern road pricing, where all vehicles using the road are charged by kilometre travelled rather than using fuel consumption as a proxy for usage.

Third, we need a revolution in the way in which we deliver infrastructure projects. As is now widely acknowledged, our New Zealand’s consenting framework is broken. Our infrastructure developers spend $1.29 billion annually to consent their projects and the time it takes to get consent has increased by 150 per cent over a five-year period.

National is sceptical the Government’s RMA changes will make it easier to get things done. Senior RMA practitioners have told us it will likely be worse than the status quo. The 900-page RMA would be replaced by around 800 pages. There are yet more layers of bureaucracy being proposed. There will be more legal uncertainty, particularly when the new purpose of the Act will be to recognise and uphold “te Oranga o te Taiao”, a legal term that is completely new. It does not appear in our statute books. Years of legal wrangling awaits. I’m sure lawyers will enjoy it.

Fourth, it is critical we develop a long-term infrastructure pipeline and plan, for all the reasons that regularly get raised with me by the sector — confidence to invest in technology, equipment, and people, and efficiencies in planning and procurement.

Politics too often gets in the way of proper planning and we are cognisant know that the changing of political priorities is problematic. New Zealand needs a pipeline of work largely divorced from politics and that will be our National’s priority.

Finally, the debacle over the Three Waters reform, where the Government has managed to insult and essentially sideline local government, demonstrates that a rethink is required on the local and central government relationship

We intend that National will partner with cities and regions to support their development and we are interested in the “City Deal” concepts pursued successfully across Tasman and further afield.

• Chris Bishop is the National Party Spokesperson for Infrastructure & Housing.