Big spending but so little to show for it

We are to have an infrastructure splurge – which in itself will apparently help the Treasury’s increasingly modest growth predictions be achieved.

It is good to see the Government finally deciding that it needs to invest seriously in new roading and other infrastructure, after handing the Greens the keys to the transport portfolio for the last two years. However the proof of this pudding will definitely be in the eating.

Let’s be under no illusion as to how quickly the infrastructure pipeline has been run down. There are currently 11 major roading projects, all started before 2017, that are building 120km of new and upgraded four-lane highways around this country. Nine of them are due to finish before the end of next year.

From that point in time there is literally nothing, no large new road projects, rail projects, or anything else to replace them. All of the big projects in the queue have been stopped, slowed down, or postponed because ‘‘we shouldn’t be building new roads’’ and we’re not ready to build anything else. The civil contracting industry has been tearing its hair out worrying about what to do with its workforce.

The problem will be how to ramp that infrastructure pipeline up quickly again. The Government finally acknowledged this week that NZTA has been pretty good at building stuff, but that was before the same Government took multiple billions out of the forward roading budget, unfairly shamed the agency over the Auckland tram fiasco, made key personnel changes, and operated a revolving door into and out of its boardroom. Treasury seems to acknowledge this issue, by projecting the Government will get little more than a third of their new $12b spend out the door by the middle of 2022.

Another challenge will be to build the right infrastructure, stuff that improves economic efficiency rather than damaging it. A useful hint is to invest in more of the infrastructure that people already use, like commuter rail and busy road corridors, and not the stuff that requires heroic assumptions about bending the world to suit your world view. Flights of fancy about faraway ports and returning to a time when 70 per cent of freight travelled by rail are examples of what not to invest billions in.

More broadly the Government must start demanding some accountability for all the billions of extra spending. The absence of any tangible results from all this spending is another brake on our prosperity, and the amount of wastage going on is insulting to hard-working Kiwis paying their taxes.

Most of those people would surely prefer to pay less tax to take the pressure off their own family budgets, rather than having to watch their spendthrift friend without a care in the world max out New Zealand’s credit card and have nothing to show for it.

New Zealanders worked very hard to restore the country’s fiscal position following the global financial crisis. We shouldn’t be frittering all those gains away.

All this wouldn’t be so bad if the Government had something to show for it.