ISSUE 1. JUNE 2021 - Infrastructure New Zealand
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ISSUE 1. JUNE 2021
Kia ora koutou katoa,
Welcome to our first edition of InfraRead, a monthly
newsletter designed to keep you up to date with key
happenings in the infrastructure space. In this dispatch:
is the government making strides toward a more joined
up approach to solving the dual challenges of climate
change and our infrastructure deficit; and which ball will
master juggler Grant Robertson toss in the air next?
Ngā mihi,
Claire Edmondson
I S S U E 1 . J U N E 20 2 1 2
CONTENTS
What’s on the policy horizon? 4
The Hon Grant Robertson’s second act 6
NEWS 9
Water reform will create jobs and boost GDP 10
Government struggles to reliably prioritise projects 11
Long term thinking needed to lift our standard of living 13
Green light given to Bill which will encourage innovation 14
TEAM 15
I S S U E 1 . J U N E 20 2 1 3
What’s on the
policy horizon?
By Claire Edmondson, Chief Advisor
I S S U E 1 . J U N E 20 2 1 4
The government faces a critical test in infrastructure in the next five years that
will burn as much financial capital and as much political goodwill as it can muster.
In the last few weeks, with the The Commission’s recent consultation
Climate Commission’s final advice to document on a national infrastructure
the government sitting in the Prime strategy has brought together several
Minister’s in-tray and Te Waihanga’s issues, such as climate change, that
draft 30-year strategy about to arrive in have previously been discussed
Grant Robertson’s inbox, it has become either in isolation or in parallel to one
apparent the government is facing: another. The consultation document
steers clear of taking a stand on
• A shortfall in capital to address some of the more gnarly matters.
the 30-year demands of Nonetheless, to see issues like value
New Zealand under climate capture and a population strategy
change and Three Waters being discussed in the same document
• Pressure in the cities and is encouraging. It demonstrates an
regional centres where Three attempt at a holistic approach to
Waters makes sense in policy, addressing our infrastructure woes.
but not necessarily politically More immediately, 2021-2022 has
• Medium-term demands in public shaped up to be a busy year, fast. We
and private transport, with New expect to see an exposure draft of
Zealand Upgrade jumping nearly 30% the Natural and Built Environment Bill
in total capital in just 18 months to be released in the third quarter for
public submission potentially, work
The issue of climate change has
on the Strategic Planning and Climate
very quickly taken centre stage. The
Change Adaptation Bills will be initiated
extensive work of the Climate Change
in some form, the Three Waters Review
Commission has generated much
is gaining significant momentum, and
debate and discussion. Infrastructure
there will be an opportunity to get
decisions will have a significant impact
involved in and influence the review
on climate change adaptation, mitigation
into the future of local government.
and resilience. While the government
has used the COVID-19 pandemic to
justify canning some critical projects
from the New Zealand Upgrade
Programme, we are encouraged to see
the Infrastructure Commission giving
climate change serious consideration.
I S S U E 1 . J U N E 20 2 1 5
The Hon Grant
Robertson’s second act
By Owen Gill, Chief Executive
I S S U E 1 . J U N E 20 2 1 6
I often wonder what it must be like to work in Minister Grant Robertson’s
office. In the last few weeks, I suspect it has been like being a circus juggler.
The Finance and Infrastructure Minister has more balls in the air than perhaps
any minister since Bill Birch pushed through Think Big in the early 1980s.
As Minister Robertson notches up New Zealand Infrastructure Commission:
his fourth Budget (2018 was his Te Waihanga will present Minister
first – it seems a long time ago Robertson with its proposed 30-
now), he has shepherded into life: year strategy for New Zealand this
September and is currently engaging
• Three Waters, alongside on a consultation document. The
Minister Nanaia Mahuta government will table the final
• Te Waihanga, with assistance strategy to Parliament before the end
from then-ministers Shane of March 2022. Our pick is that the
Jones and Phil Twyford September version of the strategy will
• New Zealand Upgrade Programme be 99% of the story – Te Waihanga
and Minister Robertson will not
• A proposed resurgence of rail
want any surprises next March.
and rolling stock-making in
New Zealand, with assistance from Expect to see Te Waihanga make
Transport Minister Michael Wood a strong play for the idea of lead
infrastructure, which is identifying
• A housing acceleration fund,
and prioritising the big builds that
with assistance from Housing
produce significant results.
Minister Megan Woods
New Zealand fast fibre – which has
• A renewed assessment of light been a success in anyone’s
rail for Auckland proposed to books and an enormous credit
report before Christmas. to Crown Infrastructure Partners
and its contractors – is the
On top of all that, he threw a few
class-act in this regard.
curveballs in Budget 2021 – $306
million to rebuild Scott Base, and a
$300 million fund to encourage the
uptake of low-emissions vehicles.
Some saw Scott Base coming, but
the low-emissions vehicles piece was
a surprise. Three Waters received an
additional $296 million, to take the
total available to just $1.1 billion.
I S S U E 1 . J U N E 20 2 1 7
Finessing delivery
The big question for Minister Robertson In the 1990s, then UK Prime Minister
– who is proving to be remarkably Tony Blair had a group of senior officials
adept at juggling – is what next? who worked on what was known as
With the assistance of a handful of Deliverology – the art of taking an
others, he has catalysed a lot of action approved piece of policy and getting
in a short time. He must now be thinking action on the ground. Indeed, Sir
about his second act and what he can Michael Barber, Blair’s deliverology
do in the remainder of this term. As Te leader, went on to make an entire school
Waihanga opens consultation on its of thought out of the subject. Delivery
strategy, here’s our summary of Minister is one of Minister Robertson’s most
Robertson’s medium-term choices: problematic areas. The government
will raise its capital investment to near-
Private capital or not? record levels in the following year, but
PPPs have proved to be a vexed – as the national budget shows – the
thing for this government. One of the government is increasingly caught
Minister’s tasks is to figure out how between rising project costs, skills
the government can accept more shortages, and a lack of prioritisation.
private capital. Budget 2021 shows
the government’s balance sheet will
be stretched right through to 2028
or so, which means the minister
has little room to raise capital via
the government’s own means.
I S S U E 1 . J U N E 20 2 1 8
NEWS
I S S U E 1 . J U N E 20 2 1 9Water reform will create
jobs and boost GDP
Three Waters Reform Programme
On 2 June, the Department of
Internal Affairs (DIA) released a and metropolitan councils, bills could
second tranche of evidence-based reach between $1,700 and $3,500
reports, commissioned to inform per annum in today’s dollars.
the case for change for the Three
Waters Reform Programme. Auckland would be among the centres
gaining the least from efficiency,
Infrastructure New Zealand welcomes partly because Watercare has already
these reforms as they anticipate having picked-up much of the potential gain
significant positive impacts on the since the merger of local authorities in
economy, including increasing gross Auckland in 2010. WICS has advised
domestic product (GDP) by $14.4 billion the government that the biggest
to $23 billion in present value terms efficiency gains in water are made with a
over the next 30 years compared to population base up to 800,000 people.
the likely outcomes without reform.
Without service delivery reform and the But the risks in Three Waters are big,
associated efficiency gains, the real cost and the capital cost is high. WICS
increases to communities (households states New Zealand needs to invest
and businesses) of meeting the required $120–$185b in water services over 30
investment would be significant and years if it is to reach the same service
likely unaffordable for many smaller standards as the United Kingdom
communities and low-income customers. which is between four and six billion of
capital, year-on-year, over 30 years.
The reforms expect to create a
significant number of jobs spread Cabinet expects to make decisions,
across all sectors. The WICS Phase including the number and
2 analysis shows the affordability boundaries of new water services
challenges that local authorities entities, in the coming months.
would likely face without reform. Infrastructure New Zealand will partner
For some small, rural local authorities, with DIA to provide several workshops
average household costs in 2050 on the reform programme in the coming
could reach as high as $9,000 months. The complete reports are
per annum in today’s dollars and published here. For the key findings
would be unaffordable for many of each report click here.
households. In the larger provincial
I S S U E 1 . J U N E 20 2 1 10Government struggles to reliably
prioritise projects
New Zealand Upgrade Programme were costed at $12.8 billion, roughly
double the original estimates for that
The government announced the tranche. That led the government
New Zealand Upgrade Programme to a series of adjustments and
(NZUP) in January 2020, a $12 billion cutbacks, to get the top 16 projects
programme of 32 investments. under $7 billion total capex.
The majority of expenditure was The government has said these
in public and private transport. projects will result in the reduction of
There were lesser amounts for a vehicle emissions and decarbonising
handful of hospitals, a modest injection of our transport system.
of capital into schools, and the first
of a series of clean-powered public The National Party has made its
sector projects, mostly aimed at displeasure clear and has accused
closing coal-fired heating in hosptials. the government of deliberately
downplaying the programme’s costs
Eighteen months later, and the top in an election year and now using the
16 projects - mostly in road and rail - higher, more realistic costs to cancel
I S S U E 1 . J U N E 20 2 1 11projects it ideologically opposed. has been drastically cut back to focus
The government has added a very on safety issues and possibly involving
big project in Auckland, a walking and an upgrade of two lanes instead of the
cycling link between Auckland’s City four between Flat Bush and Alfriston.
Centre and the North Shore named The government’s announcements
‘Northern Pathway’, which is 90% bigger reveal that it continues to struggle with
in cost than its predecessor and a very one of the most vexingpolicy issues
ambitious piece of engineering. Indeed, New Zealand faces in infrastructure –
the revised and much-bigger Northern the reliable prioritisation of projects. The
Pathway in Auckland – effectively a decisions underline how difficult it is for
second bridge alongside the existing the government to hold to its original
one – surprised many Aucklanders priorities and maintain confidence in
when the government announced it, cities and towns, and with the sector.
partly because of the scale and also One of the purposes of robust
because of the proposed capital cost, prioritisation is to provide certainty –
at near-$700 million, excluding the $100 both locally, and to the infrastructure
million for the land section. We support sector regarding the quality and
a walking and cycling connection over depth of the pipeline of work.
the Waitematā Harbour, but without
seeing the business case, it’s hard to People who were hoping to see the
see how a new bridge would be justified. government’s climate policy tested
in court will have to wait for another
Similarly, the $692 million SH1 day. All Aboard Aotearoa had initiated
Whangārei to Port Marsden Highway proceedings in the High Court,
– an upgraded 22km four-lane arguing Mill Road is a breach of the
corridor – has been canned in favour government’s obligations under the
of safety improvements along the Paris Accord and under the Zero
existing highway and the construction Carbon Act 2019. It is hard to see that
of a new rail line from Northport case proceeding now, given the extent
to the North Auckland rail line. to which Mill Rd has been reduced.
Projects such as the $1.3 billion Mill Details of the updated NZUP
Road transport corridor in South can be accessed here.
Auckland – a 21.5km new four-lane
corridor with separated walking and
cycling facilities that would have served
as a new connection from Manukau
to Drury South and provided better
access for the 120,000-plus people –
I S S U E 1 . J U N E 20 2 1 12Bold strategy needed to
meet our infrastructure
expectations now
and into the future
Infrastructure Commission consultation
on ‘Infrastructure for a Better Future’
• Consultations closed on 2 July 2021. that result from the infrastructure) that
• Infrastructure New Zealand improves New Zealanders’ wellbeing.
has made a submission The Commission is required to prepare
• Member workshops held across a 30-year infrastructure strategy. It
June where Infrastructure sought feedback on a consultation
Commission presented document titled He Tūāpapa ki te ora:
Infrastructure for a Better Future to
New Zealand infrastructure deficit help develop the draft Infrastructure
is around $20 billion and results Strategy. The commission will submit
from decades of underinvestment a draft strategy to the Minister for
by successive governments. This Infrastructure in September 2021
deficit is affecting our wellbeing, (which will eventually be tabled in
costing New Zealanders in lost Parliament). It will contain a set of
income and productivity. recommendations for the Minister to
The matter is not helped by a constant consider and provide a response.
focus on the short-to-medium term. Our submission supported most of
Our Budget 2021 commentary outlined the findings and options identified.
that the Budget’s attempts are
primarily concentrated in the 2021 and We also held member workshops
2022 years, with capital investment to allow the commission to present
trailing off by 2025, see here. and engage directly with members.
These workshops were well attended
The Aotearoa New Zealand and provided a unique opportunity
Infrastructure Strategy could act for members to influence the
as a critical catalyst to changing commission’s strategy directly.
this. The Infrastructure Commission:
Te Waihanga was established in 2019
to coordinate, develop, and promote
an infrastructure approach that
encourages infrastructure (and services
I S S U E 1 . J U N E 20 2 1 13Green light given
to Bill which will
encourage innovation
Building Act reforms
The Building (Building Products and
Methods, Modular Components,
and Other Matters) Amendment Bill,
which represents the first of a suite
of reforms to the Building Act 2004,
was passed by Parliament on 3 June.
The Bill seeks to lift the efficiency
and quality of building work, provide
fairer outcomes if things go wrong, (iv) improved offences and
and support the building sector to penalties; and
shift to new and more effective ways (v) expanding the use of
of working. The Bill will help support the Building Levy.
productivity improvements by lifting
efficiency and quality of building work A key change that could significantly
and to improve trust and confidence speed up the building consenting
in the building regulatory system. process is a new modular component
The Bill has two parts: the first part manufacturer scheme allowing
amends the Building Act 2004, and offsite building manufacturers who
the second part makes consequential meet specific requirements to be
amendments to other legislation. certified, allowing them to sign off
their designs and construction.
The changes to the first part
are in five categories: The Ministry of Business, Innovation
and Employment is consulting with
(i) strengthening the existing the sector to develop new regulations
product certification scheme to support the modular component
known as CodeMark; manufacturing scheme, CodeMark
(ii) creating a new scheme for modern changes and the new building
methods of construction; product information requirements.
(iii) better information for building
products and methods;
I S S U E 1 . J U N E 20 2 1 14Your Policy Team
If you would like us to develop or advocate on a
policy issue, please contact Claire:
Claire.Edmondson@infrastructure.org.nz
09 377 5570
Claire Edmondson, Azeem Khan, Senior
Chief Advisor Policy Advisor
Claire has over 18 years’ experience as a consultant Azeem’s extensive experience includes
specialising in central and local government public infrastructure funding and financing, ministerial
policy advice and has worked on some tough and policy advice, and strategic insights and
policy issues – most recently the Wage Subsidy transport advice. He was involved in shaping
Scheme and the Resurgence Support Payment. several responses to Productivity Commission
She held several roles in Christchurch following inquiries, including critiquing Bills. Azeem
the earthquakes, including Chief Advisor to the also has spatial planning experience and
CEO of CERA, Acting Chief of Staff to the Mayor worked as a drafter of the Homes and Places
of Christchurch, Strategic Advisor to the Crown outcome of the Auckland Plan 2050.
Manager of Christchurch City Council following
the loss of their accreditation, Establishment Lead
for communications and governance in the crown
company Otakaro, and Senior Advisor on the
Canterbury Royal Commission. She was also Senior
Ministerial Advisor to the Minister of Education.
I S S U E 1 . J U N E 20 2 1 15You can also read
