Why can’t we get things built? Simon Wilson on a new infrastructure report

All that time, all that money and all that political capital: The Auckland Light Rail project. A Herald cartoon from 2022. Cartoon / Guy Body

Simon Wilson is an award-winning senior writer covering politics, the climate crisis, transport, housing, urban design and social issues. He joined the Herald in 2018.

OPINION

New report says it’s time our politicians started agreeing to agree

Why can’t we get things built? You know, roads and railway lines, wind turbines, sewers, schools, hospitals and enough houses to end the appalling crisis. And why, when they do get built, do they cost so much and take so long?

The easy answer is that there is no easy answer. If there was, we wouldn’t have to ask the question. Things would get built.

But we do have to ask. Successive governments have tried, along with several branches of the public service, the Infrastructure Commission, the Productivity Commission, Local Government NZ and sector groups.

The Helen Clark Foundation joins the fray today, with a report called Bridging the infrastructure gap – Funding and financing for a resilient Aotearoa New Zealand. The quick takeout: We have to stop squabbling over what to build.

“New Zealanders should agree on a shared vision to bridge the infrastructure gap,” says the report, “and prepare the country’s growing population for a resilient future.”

Yes, well.

Consensus on long-term planning seems like almost the hardest thing to do in politics right now. But it is not impossible.

The challenge to gain a consensus in New Zealand will be hardest in transport, where the two main parties have radically different core strategies. National believes the key to progress is four-lane state highways. Labour seems committed to public transport as the key to progress, with rail also becoming more important for freight.

And on both sides, les folies grandes have made everything worse. Labour wasted time, money and political capital on a tunnelled light rail project for Auckland. The chance of a consensus was always zero.

Yet National, astonishingly, is doing the same, with a dream to build tunnelled roads beneath Wellington. That project also has zero chance of a consensus and will almost certainly end just as badly, for just the same reasons.

Prime Minister Christopher Luxon, Minister for Auckland Simeon Brown and Auckland City Mayor Wayne Brown announcing a plan for water infrastructure in the city. Photo / Alex Burton

Transport aside, though, is the idea of a bipartisan consensus on infrastructure really so far-fetched? The foundation’s report, which was produced in partnership with WSP in New Zealand, suggests most of the goals in water, communications, health, education and renewable energy are already shared.

And in broad terms, they may not be far from agreeing on what we need to confront the climate crisis. The sticking points are not the goals, but how to get there.

This is where the report gets provocative, with some blunt messages for both the left and the right of politics.

For starters, it reveals that public-private partnerships (PPPs) are indeed likely to lower construction costs and timeframes. But it says there’s no clear evidence they cost less or work better over time. That will not quite please either side.

It makes a plea for more “mature conversations” around debt, which it says will remain at the core of funding for large projects and will have to rise. Not surprisingly for a think-tank on the centre-left, the report is unimpressed with the way debt is so easily demonised in our political debates.

But related to this, the report makes a strong appeal to governments to rethink the resources available to councils.

If the state had to pay rates on all the land used by ports, railways, schools, hospitals and other government activities, councils would be far better placed to meet the funding challenges of new infrastructure. Returning GST on rates – a tax on a tax, as many councils have said – would do the same.

Governments on both sides have to date resisted all entreaties to bend on this. But it is “unsupportable”, says the report, to expect councils to keep relying so much on rates to fund growth.

The report says the public service requires greater capacity and skill levels to handle procurement, especially with PPPs.

That’s a pretty frank acknowledgement of problems that have caused some high-profile delays and cost blowouts. It also reads like a pointed reference to the current downsizing of the public service.

Transmission Gully near Wellington: A PPP with worrying cost overruns. Photo / Mark Mitchell

Next, the report warns about the siren call of new megaprojects. Everyone dreams big, but making the most of what we already have should be at the heart of planning. National and Labour have both shown signs of forgetting this.

The report says we need more revenue streams. Water meters, road tolls, value capture, targeted rates and development contributions all collect revenue from the people who benefit most from the infrastructure. Sometimes, this has obvious advantages over blanket rates and taxes, but none of these options is widely used.

The report would like to see trials of “city deals” and “regional deals”, where central and local governments develop a genuinely collaborative approach to planning and financing. Most politicians say this is a good idea, but then central government makes the decisions anyway.

Prime Minister Christopher Luxon has suggested this could change but has not yet said how.

And the report puts a stake in the ground for the “three Es”: equity, efficiency and effectiveness. Efficiency without equity is false progress, it suggests. True that. Equity without effectiveness is too. And that is also true.