Roads-tinted glasses
National’s infrastructure vision stuck in past.
One thing we know is that these big projects end up costing far more than their original estimates (think Auckland’s City Rail Link and the light rail project).
One of the big issues facing New Zealanders in this election is what to do about our infrastructure, much of which is in a poor state. It is not just roading; it is also our public transport infrastructure, our water, wastewater and sewerage infrastructure and much else besides. In looking at proposals for dealing with these we have to ask the following questions: are the right priorities being addressed? Have we a clear idea about the costs of remediation, reconstruction or new construction? Will the solutions add to or alleviate our environmental challenges, especially those associated with climate change?
All of these questions are relevant to the grand transport plan announced by Judith Collins soon after taking over as National’s third leader in the last three months. Grand it certainly is. There are roads, expressways often, from here to wherever you want to go (well, at least from Auckland to other parts of the so-called golden triangle — a term more normally applied to one of the world’s largest opium growing areas). The vision even includes tunnels.
But does it stack up against the kinds of questions asked above? Many of the projects have been talked about for some time and some are already on the longer-term agenda. What is immediately noticeable, looking at the upper North Island part of it, is the great majority of the spending on major non-roading proposals is in the distant future. Given the life expectancy of National Party leaders these days, it is a little hard to take too seriously the promise of projects which are not due to start until at least three elections after the coming one.
Some of the grandest of these, such as a tunnel through the Kaimais, are not costed at all. Some, such as new harbour crossings, are costed, it would appear, by throwing a dart at a wall. One thing we know is that these big projects end up costing far more than their original estimates (think Auckland’s City Rail Link and the light rail project).
What we essentially have in National’s plan for the nearer future is a lot of big and expensive roading projects. National has made no secret of its disdain for anything over the last three years which has diverted funding from roads to alternatives to roading, or to alternative uses for roading other than cars.
Now, I do not share the views often expressed by the Greens that practically nothing should be spent on roads. I used to try to explain that the plumber or the glazier was not going to travel around by bicycle.
But a transport plan essentially designed for cars is only going to repeat the mistakes of the past, as Tauranga has done in reproducing Auckland’s problems on a smaller, but rapidly growing scale.
Even ignoring the problems of cost escalation, National’s plan does not add up. There are multiple billions of dollars of uncosted expenditure in the longer term. If we ignore those as well, there are still problems.
The magic trick in the plan, which accounts for one-third of the income over the next 10 years, is to “allow” (that is, force) NZTA to borrow a billion dollars a year. It is a trick because this borrowing does not appear on the core Crown balance sheet. But it still exists — it appears on the consolidated Crown balance sheet and, in the end, is still owed by the government. This trickery is justified by saying it is silly that an agency with $26 billion of assets should fund its activities out of $4b a year of “cash”.
First, those assets are valued substantially on the basis of the alternative use of the land underneath them. In any case, they cannot be sold, they are not like the assets of a normal business. Second, that $4b comes from tax revenue which the government could be using for other purposes (and was, under previous National governments). It does not belong to NZTA. Third, National appears to make no allowance for the cost to NZTA of its borrowings. Finally, it is nearly always cheaper for the government to borrow itself, rather than through an agency like the NZTA, and then transfer capital to NZTA. One thing is certain — international ratings agencies, which play a large part in determining the government’s cost of borrowing, will not be fooled by tricks using magic mirrors.
Let us indeed have a longer-term plan. Let us take a step back and look at rapidly developing an integrated electric bus network using dedicated lanes or routes which will actually reflect the travel patterns of Aucklanders. This will require much less expenditure and disruption and be far more environmentally sustainable.
Sir Michael Cullen is a former
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Labour MP, Minister of Finance and Deputy Prime Minister.