Watch: MPs debate Interislander ferries’ upgrade project collapse

MPs are crossing swords on the new Government’s shock decision to cancel the upgrade of the Interislander ferries.

Finance Minister Nicola Willis made a ministerial statement on her decision to axe the project after costs blew out to nearly $3 billion.

Willis blamed the massive cost escalation on the previous Government. Former Finance Minister Grant Robertson urged Willis to “release the full documentation about this project so New Zealanders can see how hard the previous Government worked to deliver this project for them”.

Willis said the former Government has allowed the project to expand from its core remit of upgrading the ageing ferries to a project that focused too much on upgrading portside infrastructure, which was responsible for about 80 per cent of the cost of the project.

Robertson quoted a press release from NZ First leader Winston Peters - made when he was a minister in the Ardern Government, which greenlit the project - to show that portside upgrades were always part of the project.

Peters shot back alleging that the project collapsed when he left the Government after the 2020 election.

During Question Time which followed the ministerial statement discussion, Prime Minister Christopher Luxon dodged questions from Labour deputy leader Carmel Sepuloni about the Government suspending regulatory impact statements by criticising the party’s economic management.

A recently leaked Cabinet paper said proposals that “solely repeal legislation” and “not seeking approval for new policy” will have the requirement for a Regulatory Impact Statement (RIS) “suspended”.

Sepuloni’s questions about why the Government suspended the statements were often met with Luxon’s declaration that under Labour, the country’s economy shrank in three of the past three quarters.

He did defend the decision to scrap the statements, saying he believed they wouldn’t add value.

Figures released by Statistics NZ today showed the economy shrank 0.3 per cent compared with the June quarter and GDP per capita fell 0.9 per cent.

The data is weaker than economists’ consensus forecasts.

This morning, Willis said she feared she would be left with a “completely open chequebook” if she had agreed to pour more funding into the Cook Strait mega-ferry project, pointing to cost blowouts in the project.

She also appeared to rule out any government plans to privatise KiwiRail, saying it was the Government’s position that it would continue to own KiwiRail, including the Interislander service.

Asked if the Government would consider selling off the ferry service - with commercial operator Bluebridge already taking freight and passengers - Willis agreed Bluebridge did a good job.

“I do want to continue to see competition in ferry services across the Cook Strait. I think the Interislander is an important part of the mix.”

However, she told TVNZ’s Breakfast she couldn’t promise taxpayers the extra $1.47b required for port-side infrastructure, as part of plans to replace the ageing Interislander ferry fleet, would not have blown out further.

Question Time will take about an hour before Parliament continues to debate the Government’s legislation to repeal the clean car discount scheme, including the tax on higher-emitting vehicles that paid for it.

Earlier this morning, the repeal of Fair Pay Agreements passed into law after about a day of debating over it, and a union protest outside Parliament.

This afternoon from 4.30pm the four new NZ First MPs - Casey Costello, Jamie Arbuckle, Andy Foster and Tanya Unkovich - will give their maiden speeches.