Should your fuel tax and road-user charges pay for roadside sculptures?

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1. 0:06Speaker 1: Kia ora, I'm Chelsea Daniels and this is The Front Page, a daily podcast presented by the New Zealand Herald. Music
2. 0:16Speaker 1: New Zealanders spend billions of dollars every year on transport through fuel taxes, road user charges, rates and tolls. But the ACT Party says we're not getting enough for what
3. 0:28Speaker 1: we're spending. New Zealand has spent an average of 5.8% of GDP in infrastructure each year over the past couple of decades. towards the highest in the OECD, yet we
4. 0:39Speaker 1: rank towards the bottom for getting bang for our buck.
5. 0:43Speaker 1: Today on the front page, Axe infrastructure spokesperson Simon Court is with us to walk through his party's plans to
6. 0:50Speaker 1: make every transport dollar deliver. So, Simon, you say that
7. 0:57Speaker 1: New Zealand has made simple infrastructure too complicated to build.
8. 1:03Speaker 1: Are you kind of saying that we have a habit of choosing a, you know, the expensive Rolls Royce option and we've got like a Hyundai XL budget?
9. 1:12Speaker 2: Nothing could be more true than that, Chelsea. What we've done in New Zealand is say, look, if we want a new bridge or a new road, let's ask everybody,
10. 1:23Speaker 2: all the stakeholders in the community, what they want us to add to it. And so the option that comes up is usually fully fledged, gold plated, platinum encrusted. And
11. 1:35Speaker 2: what we really need are safer roads that can be built and delivered on time and on budget. So what ACT is saying is let's start by publishing the lowest
12. 1:45Speaker 2: cost safe option first. And then if communities and stakeholders and other government departments want to add bits on, they can fund them out of their budgets or through sponsorship
13. 1:56Speaker 2: or philanthropy. But road users' money should pay for the roads and they should pay for the roads we need as soon as we need them, not decades later.
14. 2:06Speaker 1: So what evidence do you have that projects are routinely being over-designed?
15. 2:12Speaker 2: If we look at the Riverlink project in the Hutt Valley, for example, important project, it combines resilience with improving transport connections to the Hutt. The bridge over the Hutt River
16. 2:23Speaker 2: is designed for a one in 1,000 year earthquake. The problem is the bridge piles and the bridge itself are only designed for 200 to 100 something years. So if
17. 2:34Speaker 2: there is an earthquake in the next 1,000 years, the bridge will still be standing, but nothing else around it will be. And what ACT is saying is, look, If
18. 2:42Speaker 2: there is a genuine reason that a certain design element needs to be beefed up, make the case. But start
19. 2:50Speaker 2: with the minimum viable lowest cost safe design. Because for too long, we've been looking for the perfect bridge rather than the bridge that gets built. And what ACT is
20. 3:01Speaker 2: saying is if we want to keep New Zealand moving, we've got to start with that lowest cost safe option first.
21. 3:06Speaker 1: Given the uncertainty around climate change, though, and the frequency of severe weather events that our country has been facing over the last, what, like just five years, I'd say,
22. 3:16Speaker 1: isn't there a risk that saving money up front will just cost us more in the end?
23. 3:21Speaker 2: Look, there is a risk that if we don't have the right infrastructure in the right place, that communities will be cut off and vital services like wastewater, essentially, for example,
24. 3:32Speaker 2: will get taken out. But it's got to be fit for purpose. If you think about the Waitemata Harbour crossing, the Auckland Harbour Bridge, or the new road that's been
25. 3:42Speaker 2: designed north of Auckland from Walkworth up to Te Hana, I understand that the designers have used the most extreme
26. 3:51Speaker 2: climate risk scenario that the UN put out. Even though even the UN says now don't use that except for testing scenarios. Do not use that for planning an investment.
27. 4:02Speaker 2: So if our own transport agency is choosing extreme designs that add tens of millions of dollars of cost into projects, we can't accept that because we'll simply run out of money, as we have, to build the next road.
28. 4:13Speaker 1: Right, so you next want to make sure transport infrastructure keeps pace with housing and population growth.
29. 4:21Speaker 3: That sounds pretty uncomplicated. Why aren't we doing that now?
30. 4:24Speaker 2: Well, we've got the infrastructure system settings right under this government.
31. 4:28Speaker 2: I've been working with Chris Bishop in my role as Under-Secretary to the Minister for Infrastructure on how we actually make sure we identify the projects we need, we get
32. 4:37Speaker 2: them into a pipeline, they've got business cases. But one thing we don't have when it comes to delivery is the trigger to move a project from concept and planning into actually getting it built. When I think about Mill
33. 4:49Speaker 2: Road in South Auckland, 20,000 vehicles a day choking a two-lane road, or Kumiu in the northwest of Auckland, 35,000
34. 4:58Speaker 2: vehicles a day, productivity crushing for the local community and people trying to get to work and get their kids to school. At the moment, While those roads are identified
35. 5:08Speaker 2: to be built, everyone's pointing the finger at everyone else. Council, government, we've got no money, it's too expensive. What ACT would say is when traffic counts get to 10,000 a day
36. 5:18Speaker 2: on a two-lane road, that road needs to be protected for future expansion. We need to use designations, we'll be able to do that in the new resource management system
37. 5:27Speaker 2: with spatial plans. The next trigger is 15,000 vehicles a day.
38. 5:31Speaker 2: That should trigger detailed design, consenting, and making sure there's a funded plan to deliver. And at 20,000 vehicles a day, that should trigger construction. Now, if we get those three
39. 5:42Speaker 2: things right and we establish the guardrails around that in the system, then we won't end up with a Mill Road or a State Highway 16 Kumu problem like we have now. Those problems still need to be solved, but
40. 5:54Speaker 2: we want to make sure that we're setting ourselves up for the future. If we're going to unlock New Zealand's potential, we have to get this right. We'll all be stuck in traffic decades from now.
41. 6:02Speaker 1: Yeah, I think you hit the nail on the head earlier when you said, who pays? So basically, if a new development creates the need for a new road and bumps up those, you know, going from 5k to 10k
42. 6:12Speaker 1: to 15k, et cetera, and the people profiting from or benefiting from that development, should they be the one contributing towards paying for the infrastructure needed?
43. 6:23Speaker 2: Certainly they should contribute. This term of government, we've updated the Infrastructure Funding and Financing Act so that properties that benefit from a new road or say a new interchange,
44. 6:34Speaker 2: a new transport connection, they can be levied to pay for part of the road, but they will never pay for all of it. So we're going to continue to rely on road user charges, fuel excise duty and tolls
45. 6:44Speaker 2: as well. And so people who pay those costs, they're already paying the road user charges and the others. They expect the roads to be delivered on time and on budget.
46. 6:54Speaker 2: And if we can add an additional what we call layer to the capital stack through infrastructure funding and financing agreements, that's an important part of making sure we can fund
47. 7:05Speaker 2: the roads that we need as soon as we need them.
48. 7:08Speaker 1: When we talk about potentially ring fencing maintenance costs and funding within the National Land Transport.
49. 7:15Speaker 3: Fund, I would have thought that that was happening anyway.
50. 7:20Speaker 1: Have you seen any maintenance budgets that have actually been affected because something else has been overblown?
51. 7:26Speaker 3: A new road, for example?
52. 7:28Speaker 2: Well, most Kiwis remember the pothole crisis of the early 2020s.
53. 7:34Speaker 2: That took around seven years to develop because for seven years, roads that needed rehabilitation, reconstruction, resurfacing simply weren't. Well, that
54. 7:45Speaker 2: money was either spent elsewhere or wasted. What ACT is saying is we shouldn't be faced with a pothole crisis every seven years. The government has done a lot. We've
55. 7:56Speaker 2: put money in. We've ring-fenced it. But that's to deal with the problem that we encountered at the time. What ACT is saying going forward... that maintenance and renewals funding
56. 8:05Speaker 2: needs to be ring-fenced in the National Land Transport Plan.
57. 8:09Speaker 2: Infrastructure Commission says that 60 cents of every dollar should be spent on maintaining and renewing what you've got first.
58. 8:15Speaker 2: ACT wants to see that in the government's Transport General Policy Statement and have those tight guardrails in the agency so they can't use maintenance money to fund cost overruns
59. 8:26Speaker 2: on another project or nice-to-haves.
60. 8:28Speaker 3: Have you seen that, though?
61. 8:29Speaker 1: Can you give us an example of when maintenance money has been kind of moved around to have a nice-to-have, for example?
62. 8:36Speaker 2: Well, for seven years leading up to the early 2020s, the money that should have been spent on rehabs and resurfacing...
63. 8:43Speaker 2: simply wasn't. Now, you know, I wasn't in government then.
64. 8:46Speaker 2: I can't tell you where it was spent, but I was working as a civil engineer on roading projects and I ran a road maintenance contract and it was a constant battle with the clients to say, unless we can
65. 8:57Speaker 2: continue to maintain your asset, What will happen is a few years down the track, you'll be faced with a much, much bigger bill to reconstruct it, sometimes from scratch, instead
66. 9:08Speaker 2: of resurfacing it and protecting what you've got. So that's my experience as a civil engineer. And in government, I've seen how much we've had to sacrifice on other projects to catch up with this maintenance underspend. ACT wants to
67. 9:20Speaker 2: make sure that we don't end up in a situation like that in the future.
68. 9:23Speaker 1: One thing I found interesting, so are there government contracts being awarded now based on ethnicity?
69. 9:31Speaker 2: Government is very clear. When ACT came into government, we insisted on and we got Cabinet to agree on a
70. 9:39Speaker 2: need not race instruction from Cabinet to government departments. Now, we were concerned the previous government had put in an
71. 9:49Speaker 2: arbitrary target of 5% procurement to Māori business without actually identifying what were the benefits of that, but also who
72. 9:58Speaker 2: actually might have been better off to win those. contracts. So, Local government does not have the same controls on it.
73. 10:07Speaker 2: Auckland Council, Auckland Transport, for example, they have a target of getting to 5% and then 10% procurement for Māori and Pasifika businesses. It's actually locking other contractors out who
74. 10:17Speaker 2: employ Māori and Pasifika people who don't qualify in terms of the business ownership requirements around Māori business ownership. So
75. 10:24Speaker 2: what ACT is saying, ethnicity-based contracts, procurement targets, contract awards, they should not be funded by the taxpayer. If there's
76. 10:33Speaker 2: crown funding coming down to councils for roading and other infrastructure projects, that cannot be allocated to council projects that have these ethnicity-based targets.
77. 10:43Speaker 3: Does it happen very often?
78. 10:45Speaker 2: Well, Auckland Transport, now part of Auckland Council, spent around $ 64 million in the last year on awarding contracts based on ethnicity or race. So it is happening right now.
79. 10:57Speaker 2: And ACT says it should not happen.
80. 10:58Speaker 1: And do we know under what conditions a project needs to meet to be only tendered to Māori and Pasifika businesses?
81. 11:07Speaker 2: There was a car park contract, for example, where the tender conditions were only Māori businesses were able to tender.
82. 11:13Speaker 3: That was a Marae car park, wasn't it?
83. 11:16Speaker 2: Notwithstanding, if it's taxpayer funding, ratepayer funding, then the best contractor at the best price should get the job. We
84. 11:26Speaker 2: can't go forward as a country where we're accepting councils, government, allocating contracts on the basis of ethnicity. New Zealanders need
85. 11:36Speaker 2: better bang for buck from their transport spend, from their infrastructure spend. And there are good contractors out there who employ people from all walks of life, from many different
86. 11:46Speaker 2: nationalities and ethnicities. And if they are excluded from tendering because their owner's aren't the right race, New Zealand's going
87. 11:55Speaker 2: to end up like Zimbabwe. And ACT doesn't believe that we should go down that road.
88. 11:59Speaker 3: What happens in Zimbabwe?
89. 12:01Speaker 2: Well, it's a failed state with massive inflation. All the smart people and the farmers have fled. And I don't know if you've ever driven through Africa, but Zimbabwe's roads
90. 12:10Speaker 2: are amongst the worst. Keep New Zealand moving.
91. 12:19Speaker 4: The Act intends that transport infrastructure should get better value for money.
92. 12:25Speaker 2: We need more.
93. 12:26Speaker 4: Infrastructure built for every dollar spent. We need to stop road user revenue being wasted and ensure New Zealand's roads keep pace with growth. New Zealanders already pay a lot
94. 12:36Speaker 4: through transport, through tax, fuel excise duties, tolls, rates and user charges. They rightly expect that money to be spent
95. 12:46Speaker 4: building and maintaining the transport network.
96. 12:51Speaker 1: In terms of awarding a Moria Pacifica contract, are there some.
97. 12:55Speaker 3: Kind of like cultural.
98. 12:59Speaker 1: Situations where they would be the ones to be able to work on the land that's being tended?
99. 13:06Speaker 2: If there are projects that say a Moria wants to tender for a car park, they can choose whoever they want.
100. 13:12Speaker 2: But if it's being funded by taxpayers and ratepayers, what ACT is saying, no, procurement must be based on lowest price conforming, get the best tenderer to do the job,
101. 13:24Speaker 2: and ethnicity should not be one of the criteria that contracts are weighted against.
102. 13:29Speaker 1: Right, so let's move on to one that seems a little bit more uncontroversial.
103. 13:34Speaker 3: Make road money deliver roads.
104. 13:36Speaker 2: Indeed. Indeed. Well, I've just been walking alongside the Northern Motorway in Albany, just north of Auckland, where NZTA have
105. 13:47Speaker 2: installed a whole range of cultural statues and different features along about five kilometres of highway. They can't tell us what that actually costs. It's all wrapped up in the
106. 13:59Speaker 2: project budget. But I've driven through that section at 100 kilometres an hour, probably 100 times or more over the past few years. I've never noticed this stuff. but we've
107. 14:09Speaker 2: paid for it. And it didn't deliver the road any faster.
108. 14:13Speaker 2: Kiwis aren't getting to where they want to go on time because of these things. And what Acts says, look, if communities still want to have these cultural features, additional landscaping,
109. 14:25Speaker 2: then they can. But they should pay for it through sponsorship, through philanthropy, fundraising, road money that's collected for roads from
110. 14:34Speaker 2: road users, fuel excess duty, taxes, tolls, should be used to build the roads.
111. 14:40Speaker 1: Do you think Kiwis would be shocked to learn that their road user charges are going towards sculptures.
112. 14:45Speaker 3: For $ 1. 8 plus million?
113. 14:48Speaker 2: Some New Zealanders might appreciate those features on their journey, but let's be clear. If Kiwis are being taxed at the pump, road user charges if you drive a diesel,
114. 15:00Speaker 2: tolls if you're driving on a toll road, they expect that money to go towards the pavements and actually getting them to their destination safer and faster. So I have
115. 15:11Speaker 2: no objection to those features on the state highway network or on local roads, but they shouldn't be paid for out of the roading budget. And some people might say, oh, it's just a few million dollars out of hundreds of millions.
116. 15:22Speaker 2: But if we're going to accept that, then where does it end? Well, we know where it ends. It ends up with Kiwis feeling that, hey, they're still stuck in traffic while other people are getting paid to put art
117. 15:33Speaker 2: on the motorways. So ACT just wants to restore a sense of fairness for road users and Kiwis who expect things to be delivered on time and on budget and get value for money.
118. 15:42Speaker 1: And lastly, most people can't afford to buy a brand new car. How are the rules at the moment making affordable used cars harder or more expensive to get?
119. 15:53Speaker 2: Well, successive governments have introduced stricter and stricter emissions standards, which actually don't reflect the range of vehicles that we could buy from overseas. So, for example, the previous government
120. 16:05Speaker 2: introduced the clean car discount where they penalised utes and vans, including used ones, in favour of EVs. Well, there's never been more EVs arriving in New Zealand now, so it
121. 16:15Speaker 2: turns out that policy wasn't needed. We also have the clean car standard, and it's laudable for a country to have an emissions standard for vehicles. We don't want pollution
122. 16:25Speaker 2: coming out the back of old wrecks on our roads.
123. 16:29Speaker 2: But let's be clear, if these standards are actually tougher, then the standards of the vehicles that we could buy from Japan, and at the moment, a lot of vehicles that are coming out of Japan are 7, 8, 9,
124. 16:40Speaker 2: 10 years old. If the standards are tougher than that, we're just going to have fewer vehicles available. So what's happened in the past few years is the number of vehicles coming from Japan have dropped from about 160,000 a year down to about 85,000. So far fewer Kiwis now
125. 16:49Speaker 2: have access to safer, modern cars. And the cost of them has gone up. And as a result, the age
126. 17:00Speaker 2: of our fleet, the average age has gone up from around 14 years to over 15 years. So these emission standards policies and other rules around age and quality of vehicles,
127. 17:10Speaker 2: they're not helping Kiwis buy the next safer vehicle. So what ACT is saying, we will scrap existing rules that stop Kiwis having access to those safer, affordable vehicles.
128. 17:21Speaker 1: And those vehicles, are they not coming in because they're a bit too old?
129. 17:24Speaker 2: A used car coming out of Japan that's 10 years old is better than a 15- or 20-year-old rusty gas guzzler that people are driving around in now. But if
130. 17:35Speaker 2: Kiwis are priced out of being able to get those cars by vehicle emissions standards or unrealistic safety expectations that are fine for new cars but shouldn't apply to used cars,
131. 17:47Speaker 2: Kiwis are simply going to drive their old clunkers for longer and What we're trying to do is things are affordable and Kiwis actually have choice.
132. 17:55Speaker 1: So at the moment, can I not buy a 10-year-old used hybrid from Japan?
133. 18:00Speaker 2: It's becoming harder and harder to import them. There are a wide range of vehicles available, but the pool of vehicles that importers have access to, because of our rules,
134. 18:11Speaker 2: the pool has shrunk. So while they can still get vehicles, getting in about 80,000, 85,000 a year, that's far lower than the 120,000-odd average we used to get. And what
135. 18:22Speaker 2: that means is the smaller pool of vehicles, the price of them has gone up. So a used car used to cost somewhere around $ 10, 000 to $ 12, 000, 10 years old
136. 18:30Speaker 2: out of Japan. Now it's $ 15, 000 and heading to $ 20, 000.
137. 18:33Speaker 2: What ACT is saying is, look, let's not make rules that actually make our vehicle fleet older.
138. 18:40Speaker 3: Thanks for joining us, Simon.
139. 18:41Speaker 2: You're welcome, Chelsea.
140. 18:46Speaker 3: That's it for this episode of The Front Page.
141. 18:49Speaker 1: You can read more about today's stories and extensive news coverage at nzherald.co.nz. The Front Page is hosted and produced
142. 18:58Speaker 1: by me, Chelsea Daniels. Kane Dickey is our studio operator, Richard Martin, our producer and editor, and our executive producer is Jane Yee.
143. 19:08Speaker 3: Follow The Front Page on the iHeart
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