Build for the Future
The depths of a COVID-19 recession might disguise the structural infrastructure and housing deficits we have built up over more than 20 years of inaction. Once we return to something resembling normal times, however, government failures in both industries will slow down growth and condemn people to poverty. If we wish to build a high-growth, high-productivity, high-wage economy, we must have the capacity to absorb the new people and the new traffic which will come.
Ending the Housing Crisis
Housing costs as a percentage of income in New Zealand are some of the highest in the developed world. An entire generation of Kiwis have
been locked out of home ownership. Thousands live in insecure housing; others have no home whatsoever. This represents a total failure of government policy for the past 20 years.
Successive reports, discussion documents, and white papers, commissioned by governments of the left and the right, have correctly identified New Zealand’s planning system as the principal culprit. We simply do not allow enough building – whether up or out – to house our growing population.
ACT would therefore remove much of the discretion around urban planning from hopelessly inept and distracted local councils. We would repeal the Resource Management Act and replace it with an Urban Development Act, which will allow property owners
increased rights to build on their own land and automatically free up land for development when land prices become too inflated.
We would also reinject dynamism into the construction industry. We would replace overly-skittish council inspections with compulsory building insurance, providing guranteed redress to homeowners, while allowing innovation and speed.
We would also automatically permit building materials allowed in jurisdictions with similiar conditions to New Zealand (e.g., Japan) to be used here. That ensures materials have been approved by a quality regulator, while increasing competition in the building materials market.
Closing the Infrastructure Gap
In 1989, New Zealand adopted a world-leading model of independent central banking, based on the sensible intuition that politicians cannot be trusted with interest rates. Based on their abject failure to deliver a workable system, politicians evidently cannot be trusted with infrastructure either.
Governments of all stripes have, for years, chosen where to build roads, bridges, and railway lines, based not on the economic need for them, but on the political advantage to be gained. Taxpayers deserve better.
ACT would replace this political discretion with economic discipline. If roads are built where they are needed, rather than where they will generate the most votes for the governing party, we can
produce much greater reductions in congestion for every dollar of government spending.
By abolishing the ineffective and unfair fuel excise and introducing transparent road pricing, like that used in Singapore, we could manage demand on the roading network, down to the minute.
Authorities could also see where new roads would be most valuable and cost-effective.
We would then remove infrastructure decision-making powers from ministers and vest them in an independent New Zealand Infrastructure Corporation.
This Corporation would cooperate with private infrastructure funders to significantly increase the capacity of New Zealand's road and rail networks.
They would decide where to build new road and rail lines not based on votes at stake, but on congestion levels and safety considerations. They would be judged based on transparent
performance indicators, like the average speed reached on major arterial routes.