ACT has announced a suite of measures to get infrastructure built faster at less cost to the taxpayer and ratepayer. These measures borrow from around the world where a range of vehicles are used to get infrastructure done, compared with New Zealand’s limited and parochial range of infrastructure ownership, funding and financing schemes,” says ACT Infrastructure spokesperson Simon Court.

“New Zealand’s limited, and parochial range of infrastructure ownership, funding, and financing schemes has held the country back. Basically, if the Government and Councils can’t put it on their balance sheet and fund it from taxes and rates, it doesn’t happen. This has made us poorer as a nation.

“It is easy to find examples of infrastructure problems. The last expansion of road capacity across the Auckland Harbour took place in 1969, only 10-years after the Bridge was first built. In 2017, the average water pipeline in New Zealand was more than 30-years old.

“Traffic congestion costs the New Zealand economy hundreds of millions of dollars a year. Plumbers who once did four jobs a day can now only do three because they’re stuck on the Auckland Motorway network. Freight which used to take six hours to get from Lyttleton Port to Queenstown might now take seven. These costs add up and are baked into the price of everything in New Zealand.

“New Zealand’s major housing affordability problem is really an infrastructure problem. There is no shortage of land in New Zealand, but there is a lack of connections from any given place. Councils routinely cite the inability of water, roading, or public transport infrastructure to cope as a reason to decline resource consents.

“Against this mess or trouble, New Zealand can either carry on declining or change how it works to do better. ACT says it is time to try new ideas, giving us a chance to succeed and achieve our goals. The new ideas ACT proposes to fund, finance, own and operate infrastructure include:

Electronic Road Pricing

“Electronic road pricing is increasingly used around the world. In Stockholm, Singapore, London and Sydney, road user charges are used to manage demand and/ or fund new roads. In the United States, tolls are commonplace. Yet, in New Zealand, there are only two toll roads, both operated by the NZTA.

“One of the best options for fairly fund new roads and manage demand on existing ones is to toll them. Put another way, we would give people currently stuck in traffic the opportunity to pay for new roads if they choose to.

“ACT would phase in electronic road pricing, initially as a voluntary measure. Those who wish to use it can get credits for fuel taxes paid to offset against their road user charges. Eventually, fuel taxes would be phased out completely and all road use would be paid using satellite tracked telemetry units. Naturally, we would adopt stringent baked-in privacy protections for the use of this data.

Crown Infrastructure Companies

“The NZTA and Kiwirail both operate massive networks of transport infrastructure, both with very limited sources of funding due to their Government ownership and statutory provisions. ACT would transform them to become utilities more comparable to Chorus, regulated private networks required to provide a service to customers using the flexibility and discipline of a business.

“Kiwirail would become the system operator for the rail network but would have to accept competing services on its line. It would be partially privatised and expected to make a return for its Crown and minority private shareholders. This would put some real focus and discipline on Kiwirail’s activities and open it up to outside competitors.

“Highways New Zealand would be the road system operator, operating those highways currently operated by the NZTA. Both of these Crown Infrastructure Companies would be expected to fund themselves from user fees. They would be able to issue bonds that are explicitly not underwritten by the crown in order to expand their infrastructure.

“Together, the Crown Infrastructure Companies would be able to expand New Zealand’s infrastructure network according to demand rather than according to what the political process decides to fund, then often de-fund when the Government changes.

Local Government Infrastructure

“Due to debt caps, local governments are unable to borrow sufficiently to build projects at the scale and speed required. ACT will make it easier for communities to create off-balance-sheet infrastructure special purpose vehicles (SPVs). The debt raised by these SPVs will be secured against the assets themselves. As at national level, we need a wider range of models for owning and funding infrastructure at council level so that more gets done.

“Under ACT, councils would also receive increased funding to pay for infrastructure pressures. This would be done by sharing 50 per cent of the GST revenue raised from new residential construction in their region with them. This would provide $1.2b a year for infrastructure development, concentrated in the most high-growth regions.

“Councils would be held accountable for their infrastructure performance through long-term planning. Groups of councils (e.g. regional councils combined with all of the district councils in their jurisdiction) would agree 30-year infrastructure partnership agreements with the Infrastructure Commission which would lay out measurable goals for infrastructure delivery.” 

ACT's Policy document can be found here.

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Simon Court