More needs to be done for transport infrastructure say CEOs

The Herald drives through the new Waterview Tunnel. Photo / File

By James Penn

No doubt many CEOs were cheering on the opening of Auckland's Waterview tunnel in June, but they say there is more to be done: Auckland's congestion woes were ranked as the most impactful domestic factor for business confidence in New Zealand.

The adequacy of transport infrastructure was also chief among the concerns of business leaders.

Over half of Mood of the Boardroom survey respondents rated the issue an eight or above on a 10-point scale, ranging from no concern to extreme concern. An overall average concern rating of 7.4 tells the story.

The third and fourth ranked factors were "growth pressures in Auckland" and "housing unaffordability" respectively - both coming in at above 7 on the scale - speaking to concerns about a city that many consider to be bulging at its seams.

For Anthony Healy, CEO of BNZ, housing affordability was the top issue facing the nation. Healy had a wide variety of policy prescriptions for the issue: "Increase supply, RMA reform, more thoughtful immigration policy, overhaul local government funding model, incentivise regional migration and development, and increase infrastructure investment."

As one leader sitting on the boards of a number of organisations headquartered outside Auckland explained, "Although Auckland issues are not so concerning, we are all interlinked and there are impacts and consequences direct or indirect."

Craig Stobo, chair of the Local Government Funding Agency, said "the shortage of labour skills and pressures on growth city infrastructure" were constraints to further growth.

"Central government needs to rethink immigration policy and to share revenues with local government to incentivise them to invest in infrastructure," he suggested.

The latter of those suggestions, in the form of a policy sharing GST on construction costs, has been proposed by Act this election, and rated highly among CEOs - 3.47/5, on average.

"ACT is right on the button," said Stobo. "Sharing central government tax revenues with local government will incentivise local infrastructure investment currently constrained by Council's debt to revenue ceilings."

Stephen Selwood, chief executive of Infrastructure New Zealand, wants even broader reform: "We need to rethink how local government is structured and funded, in parallel with RMA and planning law reform."

"This requires some powers being aggregated at a regional level - economic development and infrastructure planning and delivery - and others powers devolved to communities - social issues and local amenities in particular."

Ross Buckley, Executive Chairman at KPMG, says much of the work is finally being done, but it's the timing that matters: "Recent investment in Auckland infrastructure (such as Waterveiw) is making a positive difference and paying dividends - it just always arrives 10 years late."

Other leaders point out the funds for these investments requires economic growth, and New Zealand's productivity has been flagging.

This reality was reflected in a rating of 6.3 on the concern scale for the labour productivity factor.

Indeed, after housing affordability Healy's next top issue facing the nation was productivity. "Incentivise investment in R&D, develop and grow ICT sector, encourage more VC and start up capital funds," suggested Healy.

Michele Embling's Top Three Issues

• Infrastructure pressures in Auckland including housing and transport: the Government needs to step in.

• The future of work has the ability to increase inequity in our society: Direct intervention from Government in partnership with the private sector is needed to equip the next generation to be resilient. We can't leave this to the teaching profession alone.

• Clean and Green. We need to lead the world on environmental issues but must address our own shortcomings.

The Herald's Mood of the Boardroom 2017 Election Survey attracted participation from 118 respondents. The results were debated this morning by shadow finance spokesman Grant Robertson and National's Finance Minister Steven Joyce.