Thank you for the invitation to speak to you today.
This is my second major speech as National’s new spokesperson for Transport, so what I’d like to today is outline our general approach to transport and infrastructure, and I’m very happy to take your questions.
National will be releasing a discussion document on transport and infrastructure soon. This will be the fifth discussion document we’ve released this year and comes after our very well-received document on the economy.
Not all the proposals in the documents will become policy. We’re deliberately putting some provocative and edgy ideas out there to see what people think of them.
As a party, we’re determined to do the work in Opposition now so that we can hit the ground running if we have the privilege of being elected to the Treasury benches
I think it’s now well accepted that this Government didn’t do that work in Opposition, and sadly New Zealand is now paying the price.
National is the party of infrastructure and we are proud of our record on transport investment. The last National government invested more in transport than any other government in New Zealand history.
We spent $12 billion on the first seven Roads of National Significance – transformational projects to connect our regions and unlock the potential of our cities, towns and provinces.
Nobody who has travelled through Auckland recently would get rid of the Waterview Tunnel. That’s National’s transport legacy to Auckland, alongside the Pūhoi to Wellsford project, the Western Ring Route, and Victoria Park Tunnel.
Down the road, the Waikato Expressway has created a much better and more efficient connection between our largest city and Hamilton.
The Tauranga Eastern Link has helped drive growth in one of our fastest growing regions.
And after fifty years of talk, National got on with the job of building Transmission Gully as part of the Wellington Northern Corridor Road of National Significance. My prediction is that when it opens next year, everyone will wonder why it wasn’t done 50 years ago.
Our opponents say that National is just the party of roads. That rhetoric belies the reality.
A record $2 billion was invested in public transport under National from 2015 to 2017, and now public transport use is at record levels.
In June 2019 we hit a great milestone; Aucklanders made 100 million public transport trips in the past year, making it the biggest year for buses, trains and ferries in the city since 1951.
It was National, in fact Simon Bridges as Transport Minister, which got the City Rail Link in Auckland underway.
The CRL will be a transformational project for Auckland; and will spur further increase in train patronage alongside urban regeneration.
Likewise in Wellington, the rail network reached a new annual patronage high of 14.3 million passengers in June 2019.
It was under National that the new Matangi trains were bought for the Wellington commuter network. I care deeply about rail in Wellington. Ten thousand people from the Hutt, my electorate, get on a train to get to Wellington each morning, including, frequently, me.
It was National that committed immediately to rebuilding the South Island Main North Line after the Kaikōura quakes.
Finally, we invested $1.4 billion into KiwiRail over our time in office.
Our 2017 Agenda
National – again, Simon Bridges – took an ambitious transport plan to the 2017 election.
We promised to complete the original Roads of National Significance and invest $10.5 billion to build ten more.
We committed to important projects like four lanes from Auckland to Whangārei, the East West Link in Auckland, extending the Waikato Expressway from Piarere to the Kaimai Ranges and from Cambridge to Tirau, Tauranga to Katikati including the Tauranga Northern Link, Christchurch to Ashburton and Napier to Hastings.
We promised $267 million further for the Auckland and Wellington commuter networks, including electrifying the southern line to Pukekohe, building the third main line in Auckland, and double tracking the line from Trentham to Upper Hutt.
It was an ambitious agenda but one I am confident we would have delivered. Our track record speaks for itself.
The National Party is the party of infrastructure.
Labour’s record: Infrastructure at crisis point
Almost two years into this Government’s term of office, infrastructure is, to use the words of the Prime Minister’s Business Advisory Council, at “crisis point.”
Budget 2019 showed over $3 billion has been shaved off projected infrastructure spending since predictions made just six months earlier. This has been driven by ideology — a point blank refusal to build new roads.
The Government’s 2018 Government Policy Statement on Transport immediately forced the re-evaluation of 12 major roading projects around the country, including Petone to Grenada, Ōtaki to Levin, Cambridge to Piarere, and the East West Link.
In the case of the Tauranga Northern Link, the project was funded, consented, and out for tender. It would have upgraded one of the most dangerous stretches of road in the country and facilitated the growth in Omokoroa outside Tauranga and other areas.
$5.5 billion has been stripped out of the state highway budget and unbelievable as it sounds, not a single major new roading or infrastructure project has started under this Government, nor will any.
The other day in Parliament, Paul Goldsmith asked Grant Robertson if he could name one major project started under this Government. The list he eventually provided was comically depressing.
The Awakino Gorge to Mt Messenger programme was announced by Transport Minister Simon Bridges in May 2017.
Dome Valley improvements were announced by Transport Minister Simon Bridges in May 2017.
The Kaeo Bridge and Loop Rd were – you guessed it – announced by Simon Bridges in May 2015.
Papakura to Bombay was announced by Simon Bridges.
You may be noticing a theme here.
The Opononi project he named is a worthy one – but is a $3.2 million sea wall.
Waipapa is a roundabout; and Takaka Hill is repair work following a weather event.
So there you have it. Even projects on the books are being whittled back.
As your CEO Nick Leggett has pointed out, at this late stage of the Manawatū Tararua Highway build – the Manawatū Gorge replacement – NZTA is proposing that what should be a full four-lane piece of highway will reduce to two lanes at a pivotal point, for three kilometres.
This is at the steepest point and will slow down trucks using the road, create congestion, and impact safety.
To make matters worse, a Stock Effluent Dump Site has not been included within the scope of works, despite strong support from industry.
I understand that a recent safety review of the design work says that going to one lane for a short section “reduces the perception that the new road is a motorway” and is “more in keeping with a rural look and feel for the road, to better fit in with the character of the landscape”.
This is ideology over common-sense.
As Nick says, this is a highway and first and foremost and it should be built properly.
The Government’s gutting of the roading budget is occurring at a time when the Reserve Bank Governor, the Prime Minister’s own Advisory Council, and New Zealanders are screaming at the Government to get spades in the ground.
Transport Minister Phil Twyford says New Zealand has “overinvested in roads for decades” while his Associate Minister Julie Anne Genter has made disparaging comments about “car fascists” on Twitter.
Phil Twyford and Julie Anne Genter need to stop showing contempt for New Zealand families and businesses that use roads around New Zealand every day.
According to the Treasury, currently $4.8 billion in projects are about to be completed but only $1 billion in projects are due to start.
With the country’s growth starting to slow sharply, the Government needs to listen to the experts and push go on transport projects around the country.
Instead, the Government’s policies are a disaster for civil construction.
The Business Advisory Council fears a construction cliff if work doesn’t get underway on new major projects soon.
Construction is 6 per cent of New Zealand’s GDP. It employs 250,000 people.
If we lose our roading capability it will constrain future governments’ ability to address the infrastructure deficit.
This is a real risk to our country’s economic growth. We can, and must, do better.
Australian Prime Minister Scott Morrison has just announced a $100 billion roading and rail investment package across the ditch – they will need workers.
As the National Party’s Roads of National Significance programme is wound down by Jacinda Ardern and Phil Twyford, and with no new projects on the horizon, I know where they will come from.
Even when it comes to rail, like in so many areas, the Government has talked a lot, but done little.
What has happened to the third main line in Auckland? Nothing.
What has happened to electrification to Pukekohe? Nothing.
Auckland Light Rail
That brings me to light rail.
Light rail in Auckland was the flagship promise of Labour on the campaign trail in 2017 and now it has been included as part of the Let’s Get Wellington Moving plan for Wellington.
The state highway budget has been cut by $5.5 billion over the next decade for these projects.
At the Auckland announcement, Phil Twyford and Jacinda Ardern said they had been advised it “was possible” to build the first tranche within four years at a cost of $1.3 billion from the CBD to Mount Roskill and $2.25 billion on to the Airport.
The cost has now ballooned to $4 billion, or possibly even $8 billion if you believe Shane Jones.
Project milestones have come and gone and we are still none the wiser.
Only next year will Cabinet consider two possible options for building light rail – the traditional procurement process led by NZTA or an audacious bid by NZ Infra, a joint venture between the New Zealand Super Fund and Canada’s CDPQ Infra group.
The idea of light rail to Mt Roskill by 2021 is now a fantasy and yet another example of Labour’s inability to deliver.
Light rail in Wellington, too, is on the slow track, much like the rest of the LGWM plan.
Our position on light rail
Let me be clear. We are deeply sceptical about the economics of light rail in both Auckland and Wellington.
National was advised that light rail didn’t stack up when it was assumed the cost was $2.3 billion in Auckland and around $700 million in Wellington.
This was the advice that Labour and the Greens based their election policies on.
No business case has ever been done for light rail and we now know the cost of the project in Auckland is much greater than initially thought, so the economics are now much more challenging.
So for now, and based on what we know, we remain unconvinced on light rail in Auckland.
National accepts that there will come a point that we cannot keep adding new motorways and adding lanes to existing roads that lead into our cities.
The great modern cities of the world all have active multi-modal transport systems where public transport, walking and cycling, and increasingly scootering, are ordinary, accepted, and valued parts of everyday life.
That’s the future that we in the National Party see for Auckland and Wellington and Christchurch. But is light rail really the answer?
In 2016, the New Zealand Transport Agency and Auckland Transport both commissioned a study that looked at the best ways to unlock the transport potential of Auckland. The study found that a bus-based solution would provide a credible approach over the next 20 years, up until the mid-2040s.
A bus–based solution has a number of major advantages.
First, it would allow us to start delivering transport solutions for Auckland almost immediately. The big advantage buses have over trams is that they run on roads and we already have roads - lots of them. Roads are also easy to build - we can do them more quickly that we can lay tracks.
Secondly, buses cost significantly less. A recent report from Treasury backed up the initial conclusions of the NZTA study and noted that we could save between 50-80% of the costs of light rail if we looked at road based solutions.
Perhaps the most significant and most important advantage is that the solution is flexible. Investing in a bus-based solution for Auckland would always allow us the option of transforming those existing roads into light rail in the future as long as we invested in building and protecting the public transport route (which the previous National Government was doing), but to do so at a pace that matched the demand for public transport and that allowed us to spread any additional costs over a longer period of time.
Finally, the problem with light rail is that we hard-wire our transport system by buying billions of dollars’ worth of train tracks and laying them down our streets.
In Wellington, the government has again made the political choice to go with light rail as part of the Let’s Get Wellington Moving Plan.
This is despite the 2015 Wellington Public Transport Spine study showing that light rail had a BCR of 0.05 to 0.1.
The preferred option was bus rapid transit. Light rail is almost five times more expensive.
So all in all we are deeply sceptical of the government’s fetish for light rail.
Let me now turn to heavy rail.
National is not instinctively anti-rail, nor are we blindly in favour of it either.
Rail is challenging in New Zealand. Let’s be upfront about that. We have a long and thin country, and a small population.
When the National Government took office in 2008, Labour had recently purchased KiwiRail for $690 million. KiwiRail was not in a good state when taken over. Treasury had advised Government that this price was double the market value. An independent valuation by PWC later confirmed the Government had hugely over paid for KiwiRail. “The sale of the century” is what Toll Holdings called it, and they were right.
The advice National received on taking office was stark. Government was told to retreat to the main trunk line between Auckland and Wellington and the East Coast Main Trunk between Hamilton and Port of Tauranga.
National rejected this advice and invested in turning around rail in New Zealand. We invested around $1.4 billion in KiwiRail, before accounting for the Central Rail Link in Auckland and the Kaikoura recovery package.
This translates to capital investment of about $200 million per year compared to $25 million per year while in private ownership.
This investment represented a balanced approach. We recognised the strategic national value of a functioning rail line but had to make some hard calls where lines couldn’t be financially justified.
A key point to understand is that this funding all came out of the general Crown account. The National Land Transport Fund was only used to pay for projects that were signed off by NZTA and judged to be the best approach to addressing transport needs, and affordable within the Transport Agency’s budget.
Investments such as improved metro rail in Auckland and Wellington were approved by the Transport Agency and funded out of the transport fund.
The Labour/NZ First/Green Government is pumping hundreds of millions into KiwiRail through direct Crown contributions and through the Provincial Growth Fund.
A week or so ago Shane Jones put out a press release announcing $95 million to upgrade the North Auckland Line between Swanson and Whangarei, and said it would have “significant benefits for Northland’s economy.”
Like many things Shane says, this seems to be based on hope rather than any particular analysis as 99 per cent of freight in Northland travels by truck, not rail.
We await the “Future of Rail” work that’s ongoing with interest. Likewise the Upper North Island Supply Chain Strategy work.
Finally, let me outline where we’re heading in terms of policy.
We will take a comprehensive and robust transport policy to the election, which you’ll hear more about next year.
In our economic discussion document released a month ago we flagged that we are interested in pursuing innovative approaches to infrastructure and transport investment.
The previous National government made some good progress with PPPs, SPVs and other mechanisms – think of the Transmission Gully project and Milldale's housing development – but we want to go further.
As a country, we've been too conservative in the past. We'll be open to funding innovations where they gets quality long-lasting infrastructure built more quickly.
We’re also open to using the Crown balance sheet and capital injections to get transformational infrastructure built more quickly.
We are very interested in exploring pricing mechanisms that will more efficiently manage the flow of traffic and are revenue neutral.
New Zealand is miles behind the rest of the world in terms of thinking creatively about these issues.
Some of these innovations will be politically challenging and technically difficult, given our policy immaturity with these issues. But we’re committed to getting started.
The next National government will be one seriously focused on the transport and infrastructure needs for the future of our country, building on the outstanding legacy of the John Key and Bill English administrations.
The current Government has dropped the ball and created an infrastructure crisis.
We’ll pick the ball up and run with hard by getting on with the job ahead of us all.