Rt Hon John Key
Speech to Auckland Chamber of Commerce, Sky City Convention Centre
Thank you for being here today. I want to acknowledge and thank the Auckland Chamber of Commerce for putting on this event.
Today I want to talk about some of the issues facing Auckland.
Auckland is not just New Zealand’s biggest city.
It is not just the home of one-third of New Zealand’s population.
It is not just New Zealand’s largest commercial centre.
It is not just the primary gateway into New Zealand.
Auckland is all these things but most of all, the city is, more than any other in New Zealand, the place that links our country to the rest of the world.
Auckland is our international face. Auckland is the city where we line up against the other great Pacific Rim cities.
In a country that is totally dependent on international links to succeed, Auckland is our premier shop window.
And its ethnic make-up, a unique fusion of Māori, European, Asian and Pasifika cultures, is an asset to New Zealand.
My Government is very focused on making Auckland a success not just for Aucklanders, but for all New Zealanders.
It is crucial for every New Zealander that Auckland succeeds.
Like every other city in the world, Auckland is growing and will continue to grow. Auckland is very important, but it is not separate from the rest of New Zealand. Most of the issues the Government deals with involve Auckland and every other region of New Zealand.
We are a government for all New Zealand, and Auckland is a third of New Zealand.
Decisions we make invariably affect people and businesses in Auckland.
A third of the Government’s budget is spent on Auckland – in areas like health, education, housing, law and order, and all forms of transport. It’s hard to break these things down with great accuracy, but we estimate the Government is spending about $24 billion in Auckland this year alone.
And what happens in Auckland affects the rest of New Zealand.
So I want to talk today about some issues that are important to Auckland, and because of that are important to the rest of the country as well.
We are backing Auckland to succeed in many ways.
One of those is by negotiating initiatives that contribute to jobs and growth through our Business Growth Agenda.
The Business Growth Agenda is about providing Auckland businesses with the things they need to be successful. It’s about providing better market access, better access to capital and resources, better public infrastructure, and access to innovation and skilled people.
Through the BGA we are greatly increasing the number of tertiary places in the city, and in particular South Auckland. We are supporting innovative firms through Callaghan Innovation – which has a significant and growing presence here.
We are rolling out ultra-fast broadband across the city – and the country - to connect our smart, high-tech, creative and IT companies to the world.
And we are providing a world-class international convention centre to attract conferences from overseas.
We are currently finalising arrangements with Sky City to build a $400 million convention centre, which will cater for 3,500 delegates at any one time.
Each year the convention centre is expected to attract around 33,000 new conference delegates and inject a projected $90 million a year into the economy. Estimates are that it will create 1,000 jobs during construction and 800 once it’s up and running.
The increase in gaming machines that is part of this deal will happen within the context of a sinking lid – yes, there will be more gaming machines within Sky City but there will be fewer in total across Auckland and New Zealand.
Auckland Unitary Plan
There are other ways in which the Government is backing Auckland, for example through speeding up the Auckland Unitary Plan process.
The first point I would make is that overall, the reorganisation of local government in Auckland has gone well. There is a single voice advocating for Auckland.
It has allowed a city-wide view to be taken, and the larger combined council means there is more grunt to get things done.
I know there has been a lot of debate about some provisions in the draft Unitary Plan, particularly around the intensification of development.
Those are matters for Auckland to determine.
The Government is playing its role by setting the overall framework under which the Plan is finalised, how people and communities can have a proper say in developing the Plan, and how quickly that can be done.
It was clear that if we hadn’t done anything special for Auckland in this process, it would have taken 7 to 10 years for the Plan to fully come into effect, with a lot of time and money spent arguing in the Environment Court.
That was far too long.
On the other hand, some wanted a very truncated process, with the Unitary Plan having immediate legal effect. We didn’t agree with that either, because it wouldn’t let people and communities have their say.
So we have gone for a balanced approach, which is a one-off, streamlined process by which the Plan will be in effect in around three years, but where Aucklanders can still contribute and have a proper say.
Special legislation is currently before Parliament to do this, and it will be passed soon.
On the housing front, the Government has two major concerns – housing affordability and the provision of state housing.
The affordability of housing is a particular issue here in Auckland, and I know a lot of people worry the next generation will not be able to afford to buy their first home.
But housing can be made more affordable in Auckland, and across the country, by focusing on the key areas that actually make a difference. These are land supply, consent processes, provision of infrastructure, and productivity in the construction sector.
The Government is working with councils – and in particular with the Auckland Council – on these issues because the decisions they make about housing affect the entire economy.
Rapidly rising house prices, for example, could force the Reserve Bank to raise interest rates which affects every mortgage-holder and every business in the country, and in turn would put pressure on the exchange rate which affects every exporter.
As part of the Budget, we introduced legislation to speed up the provision of new housing in areas where the pressure is greatest and housing is least affordable.
Special housing areas will be designated under accords between the Government and councils. Council approvals for new housing in those areas can then be managed under a streamlined process.
The first of these accords has been agreed with the Auckland Council leadership, and will be going to the Council for ratification.
It sets a target of 39,000 new residential houses to be consented in Auckland over the next three years.
That is a huge increase on the average 3,600 homes that have been consented each year over the past four years, and the 7,400 a year over the past 20 years.
In terms of state housing, we inherited a situation where a lot of state houses were in the wrong part of the country and of the wrong size, many were of poor quality, and many people couldn’t get housing assistance when they really needed it.
So we have set about to fix this.
By the end of this year, for example, every state house that can be insulated will be insulated.
Before the Budget we announced two big projects. One is to add up to 3,000 new state house bedrooms to 2,000 properties over the next two years - with three-quarters of them built in Auckland. The other is to build another 500 two-bedroom state houses in Auckland to address the big demand for such housing in the city.
The Government is also extending reviewable tenancies to all social housing tenants. This means people can be in social housing when they have high needs and for as long as those needs persists. But they will be given support to move into alternative housing when their situation improves and they are in a position to take that step to independence.
This will free up houses for other people and families with high needs, who would otherwise be shut out of social housing.
I want to turn now to the issue of transport.
Auckland needs a cohesive, efficient transport system combining roads, rail and other public transport to meet the needs of its growing population and to improve its contribution to the nation’s economic growth.
The Government has been spending more than ever before on building this city’s transport network. Currently we are investing around a billion dollars a year. That includes funding for state highways, local roads, rail and other public transport subsidies.
Aucklanders will see the culmination of much of this investment within the next four years.
For the first time in the city’s history it will have a fully joined-up motorway network and modern new electric trains running on an upgraded, electrified rail network.
We’ve already completed the Victoria Park Tunnel and replaced the Newmarket Viaduct.
Work is well underway on the Waterview Connection, which is New Zealand’s biggest road project ever, with a construction budget of $1.4 billion.
This will complete the Western Ring Route, providing a continuous motorway route from Manukau to Albany as an alternative to State Highway One.
The Waterview Connection will also create a continuous motorway link between the CBD and the airport.
In addition, the Waterview Connection and associated work already taking place or starting on the North-Western Motorway, will give better connections between the important west Auckland area of the city and the rest of Auckland.
We are also focused on improving connections between Auckland and its neighbouring regions.
Work is well underway on the Waikato Expressway, which will substantially reduce travel times between Auckland and Waikato, improve growth and productivity and also improve safety.
By the end of this year, half of the 10 sections of the Expressway will have been completed, and the whole project is scheduled to be completed by 2019.
Looking to the north, the Puhoi to Wellsford project will significantly improve access between Auckland and Northland.
Our political opponents call this project the “holiday highway”, but as you all know this is absolute nonsense.
The Puhoi to Wellsford project will effectively shrink the distance between these regions and provide a major boost to Northland’s economic growth prospects.
At the end of this project, and together with the Waikato Expressway, there will be a high-quality, high-capacity highway stretching from Cambridge in the south to Wellsford in the north.
But transport is not just about roads.
The Government is also investing $1.6 billion to upgrade and electrify the rail network and to assist Auckland Council to buy new electric trains.
This is the biggest single development in New Zealand’s rail network in decades. It has involved duplication of the entire Western Line - including construction of a $140 million rail trench through New Lynn - building a spur line to Manukau and electrifying the Auckland network.
By April next year, new electric trains will be running on the electrified network. All 57 trains on order are expected to be in service by 2016.
This will complete a step-change improvement in Auckland’s rail network, and provide reliable services at 10-minute frequencies in the morning and evening peak periods.
These improvements to the state highway and rail networks, together with increased funding for public transport, will make a real difference for Aucklanders going about their daily lives, for Auckland businesses, and for anyone who visits or does business with Auckland.
However, now is not the time to stand still.
Although conditions will improve as a result of current investment, the state highway network will come under further pressure as Auckland grows.
The New Zealand Transport Agency has some projects on its books that would address congestion, capitalise on the benefits of the Western Ring Route and improve access to the airport.
These include projects to:
· deliver a complete motorway-to-motorway link between the Upper Harbour Highway and the Northern Motorway at Constellation Drive, upgrade the Greville road interchange and improve the Northern Busway;
· widen the Southern Motorway between Manukau and Papakura; and
· reduce delays on the final State Highway 20A link to the airport from the north by upgrading it to motorway standard.
Under current funding assumptions, construction of these projects may be up to 10 years away from starting.
But the Government is not prepared to wait that long.
So Transport Minister Gerry Brownlee has asked the Transport Agency for advice on how to bring forward the construction start dates for these projects.
And we will be providing additional funding to enable this to happen.
While the projects I just mentioned are very important, there are three other major projects that are going to be required as well.
These are the next generation of major projects to further develop and improve transport in Auckland for the benefit of the city and the country.
The Council’s Auckland Plan includes an ambitious transport programme, which places the highest priority on three projects. These are:
· the combined Auckland Manukau Eastern Transport Initiative (AMETI) and East-West Link;
· the second Waitemata Harbour Crossing; and
· the City Rail Link.
These three projects have a price tag of around $10 billion. And they are projects that need to be planned for over a long period of time.
I want to talk about each of these in turn.
AMETI / East-West Link
The first is the Auckland Manukau Eastern Transport Initiative and East-West Link.
As you know, the area between Onehunga, Mt Wellington and East Tamaki is home to a number of industrial and logistics businesses that make a critical contribution to the Auckland and national economy.
About as many people are employed here as in the CBD and there is considerable potential for more growth.
However, the transport links in and out of this area aren’t up to the job.
Truck drivers have told us they can get stuck in congestion at any time during the working day and a seven-minute trip between Metroport and the Onehunga wharf can take as long as 40 minutes.
There are two major projects proposed in this area.
The first is the $1.5 billion Auckland Manukau Eastern Transport Initiative (AMETI). The first phase of this is underway, but the project as a whole will not be complete for another 20 years.
The second project is the proposed East-West Link between the Southern and South-Western motorways.
In combination with AMETI, the East-West Link will improve connections to the State Highway network, primarily along the Neilson Street corridor, and upgrade the links connecting to the eastern suburbs and east Tamaki industrial area.
Improvements to public transport infrastructure are also likely to be included as part of the East-West Link project.
The Transport Agency and Auckland Transport are working together on the initial options for the project.
What I can tell you is that resolving the transport problems in this part of Auckland is the Government’s next major focus for the Auckland transport network.
Given the economic importance of the area, delivering these projects over 20 years is simply not acceptable.
We have therefore asked the Transport Agency to tell us which elements of AMETI and the East-West Link can be accelerated with additional funding, and how that funding can best be targeted across both projects.
Second Harbour Crossing
The second new generation transport project is another harbour crossing.
The Auckland Harbour Bridge is one of the most critical transport links in the country. But forecasts indicate it won’t be long before demand exceeds the bridge’s capacity.
Despite recent strengthening, limits on the weight loading capacity of the clip-ons means heavy truck access may need to be increasingly managed from around 2021.
Congestion on the bridge is already a problem in the peak periods. Traffic forecasts indicate that, as the Auckland economy grows, this will increasingly spread throughout the working day.
So a new harbour crossing is likely to be needed between 2025 and 2030. A new crossing will address the issues I have just mentioned and provide for the expected growth in Auckland’s population and economy.
The Government agrees with the Auckland Council that the next crossing should be a tunnel.
The first step in what will be a very long-term project is therefore to protect the route for the crossing, which we expect will occur before the end of the year once the details of the preferred alignment have been confirmed.
City Rail Link
Lastly, we come to the City Rail Link.
The Auckland Central Business District is New Zealand’s main commercial and financial centre and, as it grows, it is important transport links into the city centre can continue to meet demand.
Over the past decade there has been a massive amount of government and council investment in transport projects to improve access to the CBD.
However, it is clear that supporting growth in Auckland’s CBD will require more in the future.
Last year, Auckland Transport’s City Centre Future Access Study concluded that the forecast growth in demand for access to the city centre would best be met with a combination of the proposed City Rail Link and substantial access upgrades for buses.
I can tell you that the Government broadly agrees with that conclusion.
We don’t, however, agree with the timeframes proposed in the report, which concluded that the City Rail Link needs to be in place by 2021.
Given the scale of the project, this would effectively mean construction would need to start in two years’ time.
So, as I indicated earlier this week, the Government is committing to a joint business plan for the City Rail Link with Auckland Council in 2017 and providing its share of funding for a construction start in 2020.
And we will be prepared to consider an earlier start date if it becomes clear that Auckland’s CBD employment and rail patronage growth hit thresholds faster than current rates of growth suggest.
Our current thinking is that an earlier business plan could be triggered if two conditions are met.
The first is if Auckland city centre employment increases by 25 per cent over current levels – that is half the increase predicted in the Future Access Study.
And the second is that annual rail patronage is on track to hit 20 million trips well before 2020.
But that is something we will discuss with Auckland Council.
We will also need to address funding, including how project costs will be shared between the Government and the Council.
In the meantime, the conclusions of the Future Access Study showed bus crowding and congestion coming into the CBD is a priority issue, and we will look to make funding available in the next government transport policy statement for projects to address this.
In conclusion, I want to return to what I started talking about today, and that is how the Government is backing Auckland to succeed.
I want to see a vibrant, successful, international Auckland, one that its residents are proud to call home and one that provides for their needs and aspirations.
Crucial infrastructure is vital to the city’s future and its inhabitants.
The Government’s direction is clear - we want to accelerate vitally-needed projects and get on with the job.
There’s no doubt that Auckland is going to continue to grow, and we have to be ahead of the curve in addressing the city’s crucial infrastructure needs.
Auckland projects map: Auckland_Projects_map.pdf