The Government's mega-sized Roads of National Significance (RONS) programme is coming under increased scrutiny amid growing questions over the affordability of mega infrastructure projects.
Infrastructure Commission chief executive Geoff Cooper told Q+A that the flagship road-building programme still lacked detailed business cases and would require a significant jump in fuel prices to self-fund.
"We've certainly learned a bit more about the projects over the last few months, and I think there's a lot more sort of cost-benefit ratios out there than there has been in the past, but there's still a lot of water to go under the bridge of what it's going to take to actually deliver these projects, certainly in a way that is affordable for New Zealanders."
The commission's 30-year infrastructure plan found that half of all large projects seeking Budget funding lacked business cases to demonstrate they were ready to be funded.
Commission says the only game in town is maintaining and operating existing frameworks. (Source: TVNZ)
Released on Tuesday, the plan — the commission's first — sets out a view of how Aotearoa should plan, fund and deliver infrastructure, with affordability at its centre.
NZTA said the roads of national significance would require $49 billion in additional revenue to build, while the Government's planned increases to road user charges and fuel excise were only estimated to bring in about $1.2 billion a year from 2029.
Cooper said funding the major roads programme entirely from user charges would require a one-off 70% increase, equivalent to a 49-cent per litre increase in petrol tax.
"You be the judge of that," he said, adding when pressed, he personally "wouldn't want it".
Rather than pursuing the programme at its current scale, the commission has suggested staging and phasing road upgrades to fit within existing land transport fund revenue.
Officials take the first passenger trip on Auckland's City Rail Link after numerous budget blowouts and delays. (Source: 1News)
Cooper said that approach could still deliver maintenance of existing roads alongside targeted strategic upgrades over the next 30 years - a position he said was better than almost any other public infrastructure sector could claim.
"Schools and hospitals and the defence estate — they would love to be in this position, but they're not," he said.
The commission wanted to protect the user-pays model — the national land transport fund — underpinning investment so that future governments could direct general revenue toward social infrastructure that could not fund itself, Cooper said.
He also took aim at the culture of mega-project announcements, saying many big infrastructure builds were plagued by uncertainty and cost blowouts.
Infrastructure Minister Chris Bishop says he's embarrassed about New Zealand's low OECD ranking for asset management. (Source: 1News)
"It's better to try and push them into smaller programmes of work that you can do over a longer time period, and we can have better infrastructure," he said.
"Small is beautiful."
Infrastructure Minister Chris Bishop had championed the process of developing the plan and previously spoken about the need for staged delivery.
The Government has until June to formally respond, months before the election.
At the 2023 election, the National Party was scrutinised for the affordability and credibility of cost estimates on its pledged RONS projects.
Auckland density backdown
Speaking to Q+A, Cooper was also pressed on Bishop's decision to back down on his ambitious plans to increase housing supply in Auckland through more liberal zoning rules.
Cabinet has agreed to reduce the minimum housing capacity the supercity must zone for from approximately two million dwellings to 1.6 million. (Source: 1News)
Asked whether the reversal illustrated how short-term political concerns won out over long-term infrastructure decisions, Cooper acknowledged a short-term issue.
"It certainly creates gyrations in the short term — there's no doubt about it."
But he said the Government's commitment to upzoning to six-storeys around rapid transit station — train and busway stations — along with up to 15 storeys along certain rail stops, set to benefit from the new City Rail Link, was still "pretty good to me".
"What infrastructure needs is people living around it, and for a lot of the time, I think New Zealanders have thought they can have low-density and high-quality infrastructure, and in fact, the costs of that are exceedingly high — the two don't really go together."
He said a focus on needing to intensify housing closer to jobs and transport corridors had not changed. In its plan, the Infrastructure Commission advocates for more intensive housing around public transport nodes.
Infra head honcho optimistic better things are possible
Despite the scale of the challenges, Cooper described his broader message as one of optimism, saying issues were solvable if people accepted constraints and trade-offs.
Sean Sweeney said the costs of building infrastructure in New Zealand had a "premium". (Source: 1News)
"This is a solvable problem; we just need clear eyes, and I think understanding of what the limits are and the constraints are, and we can safeguard these services for communities and future generations," he said.
His plan had deliberately started from a position of what the country could realistically afford rather than an aspirational wish list, Cooper said. "If you don't understand what you can afford, you end up dreaming big and never quite getting there."
But he warned that the window for action was narrowing, particularly as severe weather events brought renewal cycles forward faster than expected.
"The problem is that we don't tend to save for a rainy day," he said.
"These costs come all at once, and if we're not managing them through the good years, we're going to find the hard years exceptionally difficult to get through."
Q+A with Jack Tame is made with the support of New Zealand On Air
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