Can roading promises be kept?
Those who do not learn history are doomed to repeat it. Our new Government is positioning itself to be a leader in infrastructure, and has a huge test ahead in terms of demonstrating its ability to reverse the rundown of our nation’s roading infrastructure.
In July 2023, National’s then transport spokesperson Simeon Brown announced a $500 million pothole repair fund, “our roads being in the worst state they’ve ever been”, he said.
Brown’s comments were based on a trend which showed the average remaining seal life of state highways across New Zealand had declined for 14 years, evidenced by widespread pavement failure, commonly known as potholes.
At the time, the Labour Government had budgeted around $2.8 billion for state highway maintenance for the three-year period to June 2024. Transport Minister David Parker responded that Labour’s budget was a 65% increase on what the previous National government had spent.
Brown’s reply was that the Government was spending more but delivering less for roading renewals.
Parker had been handed the transport portfolio following Michael Wood’s resignation. Wood had developed a draft government policy statement (GPS) back in December 2022 that proposed cutting road maintenance budgets and using the money to fund public transport and mode-shift initiatives in New Zealand’s largest cities, sparking outrage from many local government leaders.
But following Cyclone Gabrielle and a renewed national focus on the state of our infrastructure and resilience, Parker threw Wood’s draft on Labour’s pre-election policy bonfire and replaced it with an August 2023 draft GPS that promised up to $4.6b (a 64% increase) in state highway maintenance over the next three years, and up to $3.6b (a 38% increase) in local road maintenance funding over three years.
So roll forward eight months, and Brown is now minister, and has tabled a new draft GPS with further increases in local road maintenance budgets of up to $4.05b, 12.5% above the levels proposed by Labour.
Brown’s draft GPS also proposed increases for state highway maintenance of up to $4.85b, a 7.5% increase from levels proposed by Parker, with a focus on potholes.
So this all sounds like great news for our roads. Labour lifted its maintenance budgets. A new coalition government comes to power and commits to spend even more. Problem solved?
Well, the devil is in the detail, and the real test when someone “promises” to increase funding “up to” a certain number is how much they actually spend – and here’s where a history lesson is critical.
If you look at graphs of the systemic rundown of New Zealand’s state highway network, you will note that the trend starts around 2010. In March 2009, then-transport minister Steven Joyce announced a series of major transport projects, the Roads of National Significance (RONS). Does the name sound familiar?
Joyce increased fuel taxes by 9c a litre, with corresponding increases in road user charges, to pay for RONS, but the extra tax revenue wasn’t sufficient to cover the real costs of the ambitious projects.
By 2012, the auditor-general raised concerns that road maintenance funds had been diverted into RONS, and noted the adverse trends in pavement age and condition as concerning.
The auditor-general was ignored, the projects were delivered, and the maintenance budgets continued to be raided to fund construction of the new roads, while successive governments refused to increase fuel taxes and road user charges to adequately fund their transport policy objectives.
So will it be a case of deja vu for a government committed to economic growth?
Our new transport minister has two major problems, with his government committing not to increase fuel taxes for three years combined with the fact there is literally nothing left in the assets to be sweated. Joyce’s administration got away with his policy because the assets of 2010 were in fairly good condition. Those assets are rapidly approaching or past the end of their expected useful lives.
So the test for Brown will be in delivering. The cost of building and maintaining roads has increased by 30% in three years, so budgets have to at least grow by that level to maintain the status quo – a status quo that saw the assets deteriorating nationwide.
If the Government actually plans to reverse the trend, it will need to ensure that real budgets for both local roads and state highway maintenance increase by significantly more than inflation – and remember the cyclone damage?
The problem with Government Policy Statements is that they provide ranges, not fixed dollars, because costs can vary from year to year due to the timing of significant projects and delays. Ranges provide ambiguity that allow politicians wriggle room.
What New Zealanders have a right to ask of our new Government is, are they serious about improving the average age and condition of our local roads and state highways, or will they continue the trend of providing a range in budgets, then putting in the minimum amount of maintenance to free up funds for more glamorous ribbon-cutting opportunities?
New Zealand’s state highways have an average remaining pavement life of just two years, so it won’t take long for Kiwis to get a feel for our new Government’s approach to asset management, and whether it has the political skills, determination and financial capability to turn around what can only be described as a case study in political neglect.