Jason Walls: Luxon eyes bipartisan approach to solve $1 trillion infrastructure hole

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Prime Minister Chris Luxon being shown around part of the yet-to-be-opened Sydney Metro link. Photo / POOL.
THREE KEY FACTS:
Jason Walls is NewstalkZB political editor
OPINION
There’s nothing politicians seem to love more than a high-vis vest.

Basked in splendid fluoro — orange or yellow, donning a pristine white hard hat
with a small army of advisers in tow, it’s an irresistible photo opportunity for any MP.

During his recent trip to Australia, the allure of such a photo op was simply too much for Prime Minister Chris Luxon to pass up. Flanked by Shane Jones, Chris Bishop and Simeon Brown — the ministerial trio charged with the Government’s ambitious infrastructure pipeline — Luxon descended under the Sydney skyline.
He had been invited to tour part of the yet-to-be opened Sydney Metro link. And when he came face to face with the enormous project, Luxon was instantly hit by the heat.
As he whipped the condensation from his foggy safety glasses, he peppered officials with questions about the $21 billion project. “Where does the waste go?” he asked, referring to the boring machine extracting dirt and rubble from the tunnel.
“How far does the tunnel go; how many people will the link cater to?”
Luxon got his answers, and the publicity brought the issue of New Zealand’s infrastructure deficit directly to the fore of political discourse.
His “infrastructure fact-finding” trip to Sydney has also focused heads back home.
It’s still early days for the coalition — a coalition with grand plans when it comes to funding and facilitating major projects in this country. Infrastructure Minister Chris Bishop is poised to reveal more on the much-anticipated National Infrastructure Agency at Infrastructure New Zealand’s Building Nations summit today. Detail on the Government’s infrastructure priority list will come later.
Luxon and Bishop said they got many ideas from the Australia trip and, when the National Infrastructure Agency is unveiled, it’s likely to have many parallels to what they observed in New South Wales.
Although there may be differing opinions on how the new agency will operate, there is a bipartisan agreement on one thing: New Zealand has a vast infrastructure deficit. Estimates vary as to how large that deficit is, but a recent ASB infrastructure report concluded New Zealand is facing a bill of up to $1 trillion over the next 30 years to bring the country’s infrastructure up to scratch.
Luxon said how his Government planned to solve this issue had formed the backbone of the Sydney leg of the trip. “All New Zealanders understand we have an infrastructure deficit — we as a new government are determined to work incredibly hard to solve that,” he said.
Luxon’s Sydney fact-finding mission began at Beca — the Kiwi infrastructure consultancy business with offices across the Asia-Pacific.
Although headquartered in Auckland, its Sydney office is considered one of its flagships.
“We’re all here — my infrastructure ministers and I — because we want to learn about infrastructure,” he told those at the open plan office before a round of photos with Beca’s Aussie top brass.
“We really need to get the show on the road in New Zealand and get some modern, reliable infrastructure built given the deficit we’re facing.”
He made a similar point when talking to NSW Premier Chris Minns, then again during high-level meetings with State Treasurer Daniel Mookhey. But it was Infrastructure NSW chairman Graham Bradley who was one of the first to provide some much-needed answers to Luxon’s many questions.
He pointed out that governments must partner with the private sector through public-private partnerships and that, above all else, private businesses demand certainty when it comes to their capital.
“The certainty of commitment to projects is something the whole of the construction industry relies on,” Bradley said after their meeting. “It’s very important that construction companies have certainty that not only the projects being worked on right now are being funded, but a pipeline of future projects which justifies them setting up their business in Australia.”
That’s part of the reason Infrastructure NSW was created in 2011.
The then state government decided long-term infrastructure projects were too important to be left to the whims of the political cycle.
Bradley said the model has served NSW well and helped deliver projects such as the Sydney Convention and Exhibition Centre, planning of WestConnex and traffic management around Sydney Airport and Port Botany.
The commission has also been heavily involved with the Sydney Metro, although this project has been hit by delays and cost blowouts.
Nevertheless, Bradley said having the consistency of the politically independent commission had been pivotal in maintaining that critical certainty.
“It’s very expensive to stop and start projects, and one of the things about the successive governments in NSW is they have been able to make firm commitments to the delivery of projects.
“It’s very important for the construction industry, if the project is going to be cost-efficient, that it has certainty that a project will be seen through.”
In New Zealand, the infrastructure political football has been kicked hard over the years and, for many voters, it’s become somewhat deflated. Pumping it back up may prove challenging but, as it turns out, the Aussies may have the answer: a politically bipartisan approach to infrastructure.
In an age of ever-increasing political polarisation, the NSW state government has achieved what many may have considered to be impossible — getting a political consensus on major projects.
Luxon said political consensus was exactly what his Government was striving for. “I think the challenge in New Zealand is you get a change in political or economic cycle and you get on, off, on, off, on, off and nothing’s happening; so we have to do a much better job of that.”
He said the Infrastructure Commision’s soon-to-be released infrastructure priority list will put the framework in place to make this a reality.
“We want to be able to put those mechanisms in place so we can have that bipartisan support, so irrespective of the colour of government, the project can actually carry on.”
Although it’s still early days for Luxon and his infrastructure ambitions, he has hit an early snag in his quest to secure a bipartisan approach: the Opposition.
Asked about Luxon’s comments around an apolitical approach to infrastructure, Labour leader Chris Hipkins threw his head back and laughed: “That’s somewhat ironic given all the infrastructure work that was under way under the last Government, which was cancelled by his Government.”
He cited examples such as the cancellation of the inter-island ferry project and the work around school and hospital rebuilds that was put on hold by the Government.
Other well-known examples include the likes of the Auckland Light Rail project, which, after years of planning and tens of millions of dollars, was scrapped by National.
The Labour Government’s Three Waters plans were also changed significantly by the National-led Government — as were plans for a second habour crossing in Auckland.
This Government has continued to work on water, but the change of government set the project back years and many more millions of dollars as its scope was changed.
It’s well known in the infrastructure industry that a change in government leaves a lot of projects in limbo.
Civil Contractors New Zealand CEO Alan Pollard said as much recently.
“We have this strange situation where there’s a mountain of infrastructure work that the country needs, and it’s coming … but since the election, everything has stopped effectively.”
A Royal Institution of Chartered Surveyors global monitor survey, which reported that New Zealand’s construction sector is now the most depressed it has been since the survey started, shows more than half of respondents citing the change in government last October as the reason for their pessimism.
“I think a bipartisan approach to infrastructure would be great — it’s a shame the current Government haven’t shown any commitment to that,” Hipkins said.
But his Labour-led Government is just as guilty as Luxon’s when it comes to cancelling major projects.
Soon after being elected in 2017, the new Government stopped work on the four-lane State Highway 1 from Ōtaki to North of Levin; the Melling Interchange project in the Hutt Valley; and upgrading State Highway 1 from Whangārei to the Port of Marsden to four lanes.
Chris Bishop argues his new infrastructure priority list will help take the politics out of planning.
“If you have an independently verified list of projects that infrastructure experts have said ‘this is what the country needs’, then political parties can then get behind those projects in government or in Opposition.”
Just what those projects will be has not yet been made public.
But no doubt when they’re announced, Christopher Luxon will be one of the first ones on the ground, high-vis vest, gumboots and hard hat on, ready for the first photo.

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