A new 30-year infrastructure plan is urging fewer mega-roads, more maintenance and a major lift in hospital spending. Will the government listen, asks Catherine McGregor in today’s excerpt from The Bulletin.
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A sobering stocktake
New Zealand spends heavily on infrastructure but gets poor value for money. That is the blunt message of the Infrastructure Commission’s first National Infrastructure Plan, tabled in parliament yesterday. Over the past two decades, we have invested about 5.8% of GDP a year in infrastructure, one of the highest rates in the OECD, yet we rank near the bottom for efficiency and asset management. The commission says that mismatch, combined with an ageing population and deteriorating public finances, means we cannot “afford to build our way out of every problem”.
With $275 billion worth of projects in the pipeline – many unfunded – the plan was commissioned by the government to provide a 30-year roadmap and inject some discipline into a system prone to announcing “new and shiny” projects while deferring maintenance.
Politics and priorities
While noting that the plan did not sugarcoat the scale of the challenge, minister Chris Bishop welcomed the fact that many of the commission’s top 10 priorities – including RMA reform, congestion charging and upzoning around transport corridors – reflect work already underway by the government.
But writing in The Spinoff, Joel MacManus argues the plan is also an implicit rebuke which Bishop seems unwilling to take onboard. The plan criticises the cost of the government’s flagship Roads of National Significance programme and urges decision-makers to prioritise low-cost solutions before major roading upgrades. But will the government listen? Doing so would require “a level of self-awareness and introspection” that MacManus doubts ministers are capable of, particularly on land transport. He concludes: “Until the government is willing to accept that they’re part of the problem and admit that some of its projects are a waste of money, it’s hard to put much trust in this plan.”
$9 to cross the Waitematā?
The most eye-catching recommendation is a potential $9 toll on Auckland’s harbour bridge. The commission carried out high-level modelling of a future second Waitematā Harbour crossing and concluded that tolling both the new link and the existing bridge would be necessary to raise meaningful revenue – potentially $7-9 billion over time. It’s also about incentives, says Stuff’s Emma Ricketts: “[Tolling] just one would sharply limit potential revenue. There’s a lot of people that would take a slower or older route to save $9.”
Bishop has confirmed that whatever form the second crossing takes – bridge or tunnel – it will be tolled, and said the high volume of around 200,000 vehicle movements a day means that “in theory, it’s a project that can wash its own face financially”. The more contentious question is whether Aucklanders will accept paying to use a connection that has been free for more than 40 years.
Hospitals take centre stage
If transport spending is to be pared back and better targeted, hospital infrastructure is one area where the commission wants a substantial lift. It recommends doubling health infrastructure investment from an average 0.2% of GDP between 2010 and 2022 to 0.4% over the next 30 years, amounting to more than $20 billion in the coming decade. New Zealand invests about 25% less in hospitals and equipment than comparable countries and lags behind on both the quantity and quality of facilities, reports The Post’s Harriet Laughton (paywalled). Much of the hospital estate dates from a 1960s-1980s building boom, and low investment since the 1990s has left a backlog of renewals.
With elective surgery waiting times high, ageing facilities under strain, and demand rising in every region as the population grows and ages, the case for reinvestment is stark. The hard part will be paying for it without repeating the mistakes of the past.
