Cheer up, Greens, all’s not lost on transport

‘We shape our buildings and afterwards our buildings shape us,’’ said Winston Churchill, channelling the great Roman architect Vitruvius. One person concerned with just how buildings may shape us is Julie Anne Genter, the Green MP and associate transport minister, who fears the approval of kilometres of new high-spec roads, costing roughly $5.3 billion, won’t do enough to encourage Kiwis to ditch the ute for public transport.

She’s not wrong – and she’ll have to wait a couple of years to take another crack at getting what she wants. That’s if the Government survives the election, of course.

Each government has one big opportunity to make its mark on land transport through something called a Government Policy Statement (GPS). It’s drawn up every three years by and sets out where a government wants money collected from petrol taxes and other transport charges to be spent.

NZTA takes the document as a blueprint for its own policy work, drawing up roading projects, public transport schemes, and repair work in line with what the government wants.

The current Government’s GPS, released in 2018, was radical. In the final plan, which NZTA releases in response to the GPS, light rail was given funding for the first time, equating to $460 million. Public transport spending went up by more than 50 per cent, and the cycling budget increased by 28 per cent.

Roads were the big loser, with the budget for state highway improvements slashed by nearly a fifth, equating to a cut of nearly $700m.

It was designed for ‘‘mode shift’’, which is transport speak for getting people out of their cars and into other forms of transport.

But as early as last year the plan was in tatters. As the light rail catastrophe rumbled on, the Government took $313m from its budget and spent it on an expressway. Then last week the Government topped up the road budget with $5.3b of its own money – this means money that isn’t from fuel taxes and the like, but from taxation and borrowing.

The only problem is that the money would be spent on projects developed under National’s very much anti-mode-shift transport plan from Simon Bridges’ tenure as transport minister. The

Government wants to stimulate the economy, prioritising projects that get money out the door quickly over projects it doesn’t necessarily agree with. This is why the infrastructure package has a very blue tinge to it. The Greens will have a tough time pushing this back.

All of the projects in the infrastructure package report to Finance Minister Grant Robertson, not the transport ministers. It’s an unusual, informal arrangement. Robertson hasn’t been given a new ministerial delegation, but he’s now established himself as the transport minister in all but name.

To turn the needle back, the Greens will need to win this year, giving them a say on the 2021 GPS.

Transport is a heavy loss for the Greens. It was one of the portfolios where they might have exerted the most control. They never had a hope of getting serious wins in welfare, despite the reckons of innumerate pundits. Welfare spending is operational. It has to be funded out of money collected through taxation, unless the Government wants to plough New Zealand into deficit – something no government, constrained by the Public Finance Act, would ever do.

That means that getting even a fraction of the more than $5b a year needed to fix the welfare system, as recommended by the Government’s own welfare working group, is impossible without the tax increases to which Labour would never agree.

It’s much easier for the Government to be a bit more liberal with infrastructure. It’s financed largely through borrowing, where the Government has quite a lot of headroom.

There are signs the Government is starting to shift the needle on the kinds of infrastructure it wants to build. Robertson said last week that it was looking at whether to lower Treasury’s discount of 6.0 per cent. Treasury uses this rate to calculate the current value of future cashflows. It helps guide its thinking on which projects generate good returns.

The only problem with this is that the 6 per cent rate is quite a bit higher than what the Government is charged for borrowing, currently a little above 1.5.

This change, if implemented, is an example of one of the silent shifts the Government is conducting behind the scenes, away from its flashy announcements and photo-ops. It’s quietly significant, an example of the Government ‘‘shaping our buildings’’, in the hope those changes will shape us.