The National Party’s roading-focused transport plan offers $24.8 billion of works over the next 10 years – but can they avoid the same claims of overspending they’ve charged Labour with?
Accusations of overspending have flown thick and fast at this Government from those in opposition.
But though the National Party campaigns on what it promises are fixes to a growing infrastructure deficit, the cost of its own to-do list are growing.
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As an expensive transport plan mostly focused on roads is rolled out, National is saying it has other sources of revenue up its sleeve.
Overseas private equity, improved productivity and user-pays systems are the trump cards National leader Christopher Luxon will be relying on to avoid being tarnished with the same ‘big spender’ label he and his team have been dishing out.
National is promising to pay for about 40 percent of its near $25 billion transport plan with private funding mechanisms that could include public/private partnerships and toll roads.
There are only three toll roads in the country at present – two around Tauranga, and one north of Auckland.
Just over half of a $2.60 toll goes towards debt repayments. For the Northern Gateway, it’s expected the debt will be paid off and the toll removed by 2039.
To entice offshore investors, infrastructure needs some kind of revenue to flow back to them. That could be train tickets, stadium profits, or in this case tolls.
Luxon said the plan was to leverage “value capture, targeted rates, public/private partnerships” and gain the attention of overseas pension funds who are “awash with cash”.
Targeted rates is a term usually reserved for local government, where ratepayers fund specific services or projects. They can be applied to all ratepayers or to the specific group who stand to benefit.
For example, in Auckland the owners of swimming pools pay an extra bit of rates to pay for fence inspectors.
National’s transport plan makes no mention of actually dipping into the rates pool of local councils, however.
National Party transport spokesperson Simeon Brown said local government would not be responsible for funding state highway projects under National’s transport plan.
“Under National’s policy, state highway projects will be funded through reprioritisations to the National Land Transport Fund and additional crown capital, and we will also be using new tools with value capture and cost recovery tools made available to fund state highway projects that unlock significant new housing and commercial development opportunities.”
The plan does mention tax levies on unlocked developable sites that would work similarly to some targeted rates – asking those who stand to benefit to pay up a little more.
Luxon called value capture mechanisms like this an “innovative funding tool” he was selling as a bridge to the gap without dipping too much into the public purse.
Along with levies for developers, National has turned its gaze overseas for potential investors.
At a meeting on housing in June, National's infrastructure spokesperson Chris Bishop railed against current levels of government spending but also acknowledged his own party’s visions for infrastructure would have their own costs.
He said a new National government would be an “infrastructure government” – meaning “central government is going to have to step up with more money”.
At face value it seems like a contradiction, but National politicians have stressed there are untapped streams of revenue and they know how to harness them.
This would be delivered through the establishment of a National Infrastructure Agency to coordinate government funding, connect domestic and offshore investors with New Zealand infrastructure, and make productivity-related changes to planning and procurement.
The National Infrastructure Agency would in essence be an expansion to the powers of Crown Investment Partners, the group overseeing rural broadband rollout at the Government’s behest.
Bishop said the agency would provide a link for overseas investors to get involved in public infrastructure projects.
Likely coalition partners Act came out saying they would shut the door on some overseas partners, however.
“If National’s transport policy leaves the door open for the Chinese Government to build New Zealand roads, Act’s well-thought-out transport policy shuts it,” said Act Leader David Seymour.
It follows reporting from Newshub questioning Luxon on whether he’d take investment from the Chinese government, essentially making New Zealand part of the Belt and Road Initiative.
Luxon said he was open to Chinese investment, but was targeting the likes of Australian and Canadian pension plans first and foremost.
