The NZ Infrastructure Commission has recently published its Draft New Zealand Infrastructure Strategy. Prepared as advice to Government, the analysis to totally relevant to Hawke’s Bay infrastructure planning … and woes.
Admit it, you’re probably already bored!
‘Infrastructure’ is such a un-sexy and unwieldy word for the physical works that underlie all the activities and services we use and enjoy in our daily lives.
Connecting us with all modes of travel. Providing the clean water we need and treating the waste water we don’t. Providing hospitals and schools. Protecting us from floods and coastal erosion. Delivering our power and communications. Enabling our quality of life.
These assets are long-lived and expensive, raising thorny financing issues to ensure equity across generation and across users. And to anticipate inevitable shocks like climate changes and natural disasters.
Planning and paying for these assets (most, not all, are public) is one of the most difficult political responsibilities of our elected representatives, at both the national and local/regional levels.
And the record shows they often stuff it up … more by omission than commission. Because of chronic underinvestment, this Report says we’ve accrued an infrastructure deficit forecast to exceed $75 billion.
That said, according to the Report, after a period of low investment in the 1990s, NZ now invests a greater share of national income on public capital than almost all other developed countries. However we only rank 46th out of 140 countries in terms of the effectiveness of our infrastructure spending. The Report notes: “Internationally, countries with the best practices get twice as much bang for their investment buck as countries with poor practices.”
The Reports adds, diplomatically: “Internationally, there is evidence that public investment is often allocated in response to political concerns rather than actual need. Large iconic projects may be favoured over smaller, higher-value, investments. Where this occurs, it can reduce the value that we get from our infrastructure investment and reduce economic performance.” Doesn’t that sound like Hawke’s Bay?
So here’s the overall challenge.
But if we commit the money, we still need the capacity to actually build the stuff. The report estimates we’ll need around 118,000 more construction workers. The situation is worsened by on-going international competition for talent. Australia also has a severe construction labour shortage and with weekly wages that are, on average, NZD$500 higher than ours.
This is a rigorous 245-page Report replete with comparisons of NZ to international best practice, case studies and other empirical data to back up the Commission’s recommendations. Among the more provocative recommendations the Commission makes:
- Volumetric charging for water and wastewater to reduce the amount of water that is wasted. After water meters were introduced, daily water use declined by 25% in Kapiti Coast and 30% in Tauranga during peak periods.
- The introduction of congestion pricing and road tolling in urban areas to reduce demand for transportation infrastructure.
- Prepare existing airport infrastructure for zero-emissions commercial electric flights.
- A ban on products that are hard to recycle.
- Focus environmental limits and targets to matters sustaining life (e.g. air, water, soil, biodiversity) rather than human values and preferences (e.g. heritage, character and amenity).
- Establish an independent Infrastructure Priority List to build consensus around key projects and initiatives that address significant long-term problems. Can you hear our local councils howling at this?
- Require all infrastructure projects to incorporate waste minimisation plans in procurement and design objectives and use recycled products where feasible.
- After projects are completed, publish ex-post reviews in full and measure performance, benefits and cost against business case estimates. Imagine that … accountability.
- Local governments should be amalgamated where appropriate, to better align key infrastructure and planning decisions. ‘Nuff said.
This Draft Report has been given to the Minister for Infrastructure, who will provide feedback by year’s end, with final Commission recommendations submitted to Government by March 2022.