‘Politicians need agreed vision on NZ’s future’
OPINION: It’s now well established that New Zealand has fallen far behind in our infrastructure investment, both in terms of building what we need to improve our daily lives and economic productivity; but also critically in maintaining what we already have.
The debate therefore turns to how we address this problem and what we need to do to be successful in the estimated 30-year exercise to catch up.
New Zealand’s current $210 billion infrastructure deficit can be attributed to a historical lack of investment and a divisive and piecemeal approach to planning and funding. Individual projects have stood alone and decisions on supporting projects have more recently been subjected to rigid ideological debates, rather than considered as part of a comprehensive and nationwide programme of infrastructure improvement.
Infrastructure is a means to an end. We build what we need to move people and freight around (transport), to be safe and healthy (three waters and healthcare), to communicate information (digital telecommunications), to power our homes and businesses (energy) and to provide good public facilities so we can educate our young people.
Developing a bipartisan pipeline and plan, along with improving our structural settings, is critical to addressing our deficit and providing a more co-ordinated approach to the delivery of infrastructure.
Not having a decent future view over what we intend to build has a serious impact on both the cost and timeliness of projects. It means the infrastructure industry does not have the confidence to make the long-term investments in the people, skills and equipment required to deliver multiple projects. When the taps are finally turned on – or off – it costs us all more.
Even and considered thinking and planning is called for across the system.
Local government currently owns about 37% of our public infrastructure assets, yet only enjoys 7% of the overall tax revenue.
The model whereby local authorities are funded almost solely through rates has been failing for some time and is now resulting in eye-watering rates increases across large swathes of New Zealand. We will all be feeling that soon.
Establishing city and regional deals, as proposed by the new Government, could be a way of providing new funding tools to local authorities and allowing them to be major infrastructure deliverers in better partnership with central government.
The new fast-tracking legislation indicates an urgency to speed up consents to get infrastructure delivered.
We spend lots of time and money on planning and talking about potential projects, which often allow them to get picked off for want of money or a change in the political wind as cycles change. This must change if we are to get efficiencies out of our delivery system.
Like the local government revenue system, transport funding has significant holes. Along with a sensible, longer, 10-year planning horizon, the new Government policy statement introduces the idea that alternative funding mechanisms like road pricing will provide revenue sources for vital transport projects.
As someone reminded me this week though, these have been discussed for two decades; it’s now time for all new highways to be tolled and congestion charging in cities to become a reality. We literally won’t be able to afford our transport needs if we don’t do this.
Ensuring New Zealand can scale up its infrastructure delivery in the years ahead means we must lay these good foundations now.
A short flurry of activity will look good, but our long-term infrastructure challenges can only be solved by having the plans, systems and structures in place that allow us to maintain the pace of development through the decades to come.