National’s five-point infrastructure plan contains some familiar elements. David Williams reports.
Political speeches are peppered with anecdotes in an attempt to connect with their audience. A verbal journey from the mountain of political policy to the valleys of the people, if you will.
National Party leader Christopher Luxon, speaking at the infrastructure industry’s annual conference, Building Nations, held in Ōtautahi/Christchurch, today recalled a conversation with a veterinarian, who approached him to thank his party for “starting the Waikato Expressway”.
“She said the ease of that freeway enabled her to do one or two more jobs, and farm visits, each and every day, and enabled her to get home to her two little ones much quicker.”
That’s the point of infrastructure, Luxon said – to move people and goods more quickly to where they need to go. Making the lives of New Zealanders better.
“That’s why I want a lot more of it.”
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Setting aside the word freeway (motorway or highway, surely), this anecdote contains an inconvenient truth about large-scale infrastructure – one government might start it, but because of long construction times, and tweaks and the odd delay, another might finish it.
This was a theme picked up by the speaker who followed Luxon, Becky Wood, a UK partner of consultancy EY, who has experience in large rail and public transport projects, like Crossrail, and London’s Olympics and Paralympics.
One of her “elephants in the room” was the political context of massive projects spanning multiple administrative terms. “It’s absolutely essential to secure cross-party support in order to succeed,” she said via video from London.
Luxon managed to avoid several rampaging elephants.
A check of the speech notes confirmed there was no mention of floods, Cyclone Gabrielle, net zero, carbon, emissions, adaptation, or even the word 'climate'. This at a national infrastructure conference in 2023.
What was mentioned was “environmental resilience investments”, building renewable power schemes, and “more resilient highways”. Public transport was mentioned several times. But not potholes.
Risk management is simply one factor, he said, “but progress is the priority”.
Minutes into Wood’s speech, after Luxon had left the conference room, she mentioned the UK’s National Infrastructure Commission will, later this year, publish its second national infrastructure assessment – something that happens every five years.
The three main themes would be reaching net zero, particularly in transport, energy and heat, climate resilience, and supporting UK’s levelling-up agenda, a recognition of the variability of public transport.
The second theme would be familiar to the conference’s audience, she said, “given the recent floods and other environmental pressures you’ve experienced”.
Another significant theme for the commission was emissions from electricity, heat, and transport, which remain “far too high”.
Back to Luxon.
There’s an irony, perhaps, in the National Party leader painting a picture of a worried, frustrated and struggling nation, with a worsening economic picture and the cost of living biting, when hundreds of people have jetted to the conference, the tables heaving with merchandise, and rooms filled with stalls spruiking everything from legal advice to gondolas.
Even gloomier than the economy is Luxon’s view of the ruling Labour Party, who he criticises as wasteful, incapable of delivery, while accusing it of having no economic strategy “except to spend even more money”.
Certainly, resource consents costs have increased under Labour (although not all inflationary costs can be sheeted home to government decisions), and consent timelines (often in the hands of councils) have blown out.
Luxon said the time taken to get consent to build has increased by more than 150 percent over the past five years, while the cost of those consents has increased by 70 percent in seven years.
(This seems to echo a 2021 report for Te Waihanga by consulting firm Sapere, which said the cost of consenting infrastructure projects had increased by 70 percent since 2014. Meanwhile, in March, Infrastructure Commission chief executive Ross Copland said consent times had risen 150 percent in eight years.)
National’s big policy announcement, ahead of October’s general election, was a five-point plan for infrastructure. The “right framework”, as Luxon, a former airline CEO, put it.
There must have been some smiles in the room.
National said it would expand Crown Infrastructure Partners – best-known for managing the $1.7 billion rollout of ultra-fast broadband – into a national infrastructure agency, “to coordinate public infrastructure investment, act as a gateway for domestic and offshore capital, and deliver infrastructure for the future”. Crown Infrastructure Partners is a sponsor of Building Nations.
The new agency would comprise infrastructure funding and financing experts, as well as economic and legal experts, all taking a long-term view. The country had to “get to yes” more quickly, Luxon said, while cautioning “that won’t happen by being reckless”.
(The Government has picked its own vehicle for a new Ministry of Works – Rau Paenga, the repurposed Christchurch rebuild agency Ōtākaro Ltd.)
National’s second point was to use innovative funding and financing tools, including “streamlined public-private partnerships (PPPs), which involve long-term contracts to build and operate infrastructure”. Public-private partnerships have already been used, with mixed success, for many large projects, including the Transmission Gully highway north of Wellington, and 11 schools.
One innovation Luxon teased out was “value capture” – basically getting the beneficiaries to pay for the infrastructure, ensuring existing ratepayers/users/customers don’t have to pay more. This was the subject of a 2017 paper by consulting from PwC NZ.
PwC is a sponsor of Building Nations.
As Wood told the conference, the UK has had a “mixed experience” with PPPs and private funding initiatives, including the collapse of a partnership to modernise London’s tube system, leaving the British taxpayer with losses in the billions of pounds.
But, she says: “Harnessing the power of private sector innovation is absolutely a positive thing.”
National’s third point was for central government to do “city and regional deals” for infrastructure.
Fourthly, and perhaps most confusingly, is an infrastructure fast-track consents process – something that has been happening for years, whether it’s Transmission Gully or Queenstown housing.
The Government sped up some consents under legislation brought in to aid the country’s recovery from Covid-19, and, last year, when introducing its Resource Management Act reforms, said it would remain in place.
Fifthly and lastly, National promised to make a 30-year list of infrastructure priorities, “to deliver long-term certainty, enable more effective planning, and reduce project costs”.
The current Government has charged Rau Paenga with putting together a list of inaugural infrastructure projects.
Wood, of EY in London, said national strategies set a useful context, but implementation tended to require deeper thinking.
Kicking the can down the road
In the afternoon, Infrastructure Minister Megan Woods told the conference Governments have, for too long, delayed investing in “resilient and essential infrastructure”.
The Government conceded there was a significant infrastructure deficit. Last year, Treasury put the catch-up cost of $210 billion over 30 years.
Woods pointed to the global economic downturn, and high inflation “here and around the world”. She said the country was being tested by the earlier-than-expected effects of climate change.
The Government has invested $45 billion in infrastructure projects over the past five years, she said. And in last month’s Budget, it committed to spending a further $71 billion over the next five.
The Government has published an infrastructure action plan, and, as part of the Budget, earmarked $6 billion as part of a national resilience plan.
Says Woods: “The plan will ensure we build back better from recent weather events, with greater resilience to protect New Zealanders from increasingly severe and unpredictable weather events.”
Switching now to Wood, the London-based EY partner.
Some of her other insights for infrastructure professionals were about listening, and not becoming insular. To bring in outside eyes.
For infrastructure to be relevant it has to be rooted in the communities it’s intended to serve, she said.
“Reading through the strategy published by Te Waihanga (NZ’s Infrastructure Commission), I was particularly struck by the number of people engaged in the process of the development of that strategy.
“In what scenario might listening not matter, I wonder? And yet we could do it better.”
Luxon repeatedly told the Building Nations conference he would lead a government that would get things done, and remove obstacles. But there was no price tag for these infrastructure promises – something those voting in October’s election will be keenly listening for.
There was an expectation from some in the conference room, at least, that the next government, of whatever stripe, should shift from writing endless plans to approving projects. Or at least ensuring consent applications don’t languish for years.
