LABOUR’S POWER PLAY
NZ First’s return to Parliament is more important to the Government’s reelection prospects than if the Greens lift their party vote a bit.
Grant Robertson has been a man out to prove himself. Labour ministers of finance feel the pressure to show the markets, the punditocracy – and possibly themselves – that they are just as fiscally responsible as their opponents.
Robertson, the son of a Presbyterian accountant, has done precisely that. While he has loosened the Bill English-Steven Joyce purse strings somewhat, and changed Budget capital allowances, running surpluses has been important. He is keen to stress that, even as he spends more on infrastructure, there is no bottomless barrel of money.
So, having put in the ground work, he has now acceded to both pressure and reality and attempted to make a virtue of it, steering a $12 billion infrastructure package ($8b of announced spending, plus $4b to be rolled out over the coming years), covering new roads, rails, hospitals and schools. Some projects are expected to be approved by the end of 2020. Others are further out.
It includes an emphasis on roads, reversing both the Government’s rhetorical and erstwhile ideological opposition to new highways. Robertson knows that electric vehicles will still need roads and that public transport can’t easily help deliver goods to shops, kids to swimming practice, or take families on holiday.
The Government sees climate change as important, but recognises that roads need not be a zero-sum villain in its efforts to cut emissions.
This package also shows that Robertson is personally inserting himself into, and taking control of, infrastructure. By having the finance minister’s imprimatur on projects, he hopes to give confidence to a sector that has been grumbling about uncertainty. While Transport Minister Phil Twyford, a strong policy thinker who has struggled with the more hands-on operational side of both
KiwiBuild and transport, will still be in charge of the individual transport projects, there is little doubt that Robertson is running the show.
Remarkably, Prime Minister Jacinda Ardern even confirmed that all the ministers – from Shane Jones to Chris Hipkins – covered by the announcement will be reporting to Robertson on these projects.
The announcement is also a useful political tool by which Labour can distance itself from the Greens in an election year. Twenty minutes after the plans were announced, Greenpeace denounced them as missing ‘‘an opportunity to clean up New Zealand’s transport system’’.
Yet that notwithstanding, the plans will be disappointing for the Greens: they specifically got only $200 million for infrastructure decarbonisation, in a multi-billion package.
In comparison, NZ First gets $690m for a 22-kilometre road in Northland. Politically this is simple: NZ First’s return to Parliament is more important to the Government’s re-election prospects than if the Greens lift their party vote a bit.
Robertson, one of the keener political minds within the Government, will not be upset over the Greenpeace criticism. He is, after all from the party of labour, and if you work in a bluecollar job it will often be at the edge of town and one of the questions asked when applying for a job is: ‘‘How do you plan to get to work?’’
While this may be a roadsfirst announcement, there is a reasonable amount of money being set aside for rail improvements in Auckland and Wellington, along with some funding for more train stops in Auckland. If there’s one thing more expensive than roads, it’s railways. Some of the announced changes in rail might seem more mundane and boring and small fry, but the microeconomic effects could well be significant.
National is inevitably countering that this is the Government simply reinstating National’s roading plans that it had initially ditched. And into the bargain, it argues, the Government has smashed both confidence and the procurement pipeline that big infrastructure companies rely on. It will continue to argue that Labour doesn’t really ‘‘believe’’ in roads.
The Government, and Robertson, won’t be overly worried by these claims. It figures that people care only about what will actually be built and how it will help them get where they need to go, not how the Government got there.
One thing is for sure: the winner of the infrastructure retail politics battle will set themselves up well for September’s election.