Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


Potential for consensus on infrastructure planning

Potential for consensus on infrastructure planning, pricing and performance

Representatives from the Labour, Green and Act parties and the NZ Council for Infrastructure Development found common ground on the need for long term infrastructure planning, improved cost benefit analysis and pricing of infrastructure at the NZCID Building Nations Symposium on Wednesday.

"When you're planning investment for your grandchildren, it makes no sense to change direction every three years depending on the composition of government. You can't build a nation that way, and we certainly cannot afford to rebuild Christchurch that way." NZCID CEO Stephen Selwood says.

"It is clear from the debate that parties have difficulty reaching agreement over project prioritisation. Much of the panel discussion focussed on the relative merits of the so called "holiday highway", the motorway extension from Puhoi to Wellsford, as compared with Auckland's proposed CBD rail loop.

"But there is support for closer alignment at the policy level. In particular, there was continued support for further RMA reform, and all representatives expressed concern at the way cost-benefit analysis (CBA) is currently performed and applied.

"We need a more balanced outcomes focussed approach, one which better captures economic, social and environmental benefits and "disbenefits".

"This is critical for the development of national plans, especially for Auckland and Christchurch.

"One particular aspect of CBA which resonated with representatives was the blanket use of 8% discount rates, an issue that was specifically identified by Green Party Co-Leader Russel Norman.

"Discount rates are used by infrastructure planning agencies to project the value of net benefits into the future. In setting discount rates at 8%, the government is expecting an 8% return per anum over the measurable life of an asset on the basis that it could invest that money elsewhere and recieve that level of return. That's obviously out of line with the actual performance of the government's wider balance sheet and results in critical infrastructure investment being deferred or abandoned. Discount rates in Australia are 6% and in the UK and Europe as low as 3% to 4%.

"One of the key difficulties with a high discount rate is that long term benefits are effectively discounted away. When considering inter generational infrastructure projects like the Christchurch CBD development, Auckland's CBD loop or Puhoi-Wellsford motorway extension, all of which promise large long term "second order benefits", an 8% discount rate misrepresents long term project value, compromising investment which would otherwise bring jobs, business and opportunity to local communities.

"There was consensus on the need for a robust review of CBA processes to better inform strategic infrastructure decisions.

"We were also pleased that support was retained for central infrastructure planning and leadership.

"Labour's Transport and Infrastructure spokesperson Shane Jones rightly pointed out that the post-'Think Big' reaction to central planning went too far and has left New Zealand with a legacy of under-investment in critical infrastructure.

"There have been big advances over recent years in the coordination, alignment and integration of central government infrastructure planning, procurement and funding. We need these processes in place if we are to lift productivity and raise living standards. Markets perform better when there is confidence about central government direction and regulatory policy.

"Finally there was broad agreement that pricing of road use and water supplies was both environmentally and economically sound. Market pricing was strongly supported by Act Party spokesperson Sir Roger Douglas but also received support from Russel Norman and Shane Jones, as long as provision was made to support disadvantaged communities.

"Earlier in the day Minister of Transport Steven Joyce emphasised the importance of maximising the return on infrastructure investment, including optimising central and local government balance sheets. 

"Positively, the Minister didn't discount road pricing in Auckland, supported by Mayor Brown. But he was not yet convinced that additional taxes are needed, in the short term at least. He would want to be convinced of the economic case for introduction of any new funding mechanisms, that there is a sound business case for all major investments proposed and that maximum value is extracted from Council balance sheets before considering any such proposals.

"With significant funding challenges facing Government and Councils it is clear that the widest possible range of funding options will need to be considered, not only in Auckland and Christchurch, but across the country as a whole.

"The recognition of the need for new ways to plan, evaluate, approve and fund infrastructure investment by all political parties provides an opportunity for building political consensus around these important challenges. NZCID will now commission substantial research into these issues over the next 12 months and will look for support from key central and local government agencies to effect a change in the way New Zealand delivers critical infrastructure" said Selwood.

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On National’s Rampant Pandering To The Farming Vote

What on earth has happened to the political parties n the centre-right? Once upon a time in the US, the party of Lincoln was a respectable political party before it devolved into the cult of Trump. Here at home, the National Parry used to be able to manage and administer the economic orthodoxy in a reasonably competent fashion. Now it can barely do simple addition and subtraction. Something must have gotten into the water, and not simply out on the farm... More>>


Winston Peters Speech: The Gathering Storm Clouds: Ihumatao

Frequently around New Zealand you hear people say that politicians are all the same. It’s a convenient way to dismiss any careful investigation of the truth of that statement. New Zealand First since its inception has been committed to ‘one law ... More>>


National Agriculture Policy: Will Restore Farmer Confidence And Pride

A National Government will reduce regulatory burden and give farmers confidence for the future. Leader of the National Party Judith Collins and Agriculture spokesperson David Bennett announced National’s Agriculture policy in Gisborne today. “Agriculture ... More>>


Shaw: Wealth Tax Not A Bottom Line For Green Party But They Will Push For It

Green Party co-leader James Shaw says one of his senior MPs misspoke under pressure when she said a wealth tax was one of the party's bottom lines. More>>


Government: More Border Exceptions For Critical Roles

The Government has established class exceptions for border entry for a limited number of veterinarians, deep sea fishing crew, as well as agricultural and horticultural machinery operators. “Tight border restrictions remain the backbone of the Government’s ... More>>


Gordon Campbell: On Last Night’s Leaders Debate

Do political debates change voter intentions, and cause voters to switch sides? According to a 2019 Harvard Business School study conducted across 61 elections in nine countries involving 172,000 respondents, the answer would seem to be a resounding ... More>>


Dunne Speaks: The Election Campaign Just Grinds Slowly On And On

With just over three weeks until the General Election, the release of the first major pre-election opinion poll this week confirmed what was already being reported about this year’s campaign. Although the gap between Labour and National has narrowed ... More>>

Electoral Commission: Candidate And Party Lists Released

17 registered political parties and 677 candidates will be contesting the 2020 General Election Nominations have now closed and the Electoral Commission has released the electorate and party list candidates for 2020 online at vote.nz . Advance voting ... More>>

National: Plan To Restore NZ’s Prosperity

National’s Economic and Fiscal Plan carefully balances the need to invest in infrastructure and core public services while also reducing tax pressure on Kiwi families and businesses. National Leader Judith Collins and Finance spokesperson Paul Goldsmith unveiled National’s ... More>>


NZ First: Party List

New Zealand First has a proven twenty-seven-year history of bringing balance and common sense to our government. Amid the continued setbacks of COVID-19 restrictions, New Zealand First has once again sustained its profile by selecting a strong team ... More>>





InfoPages News Channels