OPINION
In my time in transport, no Government Policy Statement (GPS) has been so eagerly awaited as the one that arrived last week.
To recap, the original draft GPS was issued in August last year by the previous government. This was effectively in place for the last seven months but, in reality, as soon as the government changed, it was defunct.
Much of the transport planning sector was effectively “parked” until this new GPS arrived, now available in draft form. But it won’t be approved until after a consultation period, potentially coming into force in July.
The GPS is important as all transport funding applications and business cases (the documents that go to the NZ Transport Agency Board to approve new projects) are required to be assessed for GPS alignment.
This is how central government policy directly influences each transport project. This mechanism also affects local authority transport projects of any magnitude to be presented to New Zealand Transport Agency Waka Kotahi (NZTA) for part-funding. But without the GPS in place, we are firmly at a red light.
What we are witnessing is to some extent a normal part of the political cycle. We see a temporary stall every time there is a general election.
This cycle is noticeable because of reductions in Government spending - a hallmark of National’s policy in response to previous Covid-induced spending and overstimulation of the economy.
The new GPS is bad for certain transport sectors, with cuts in spending in investment areas such as active modes (walking and cycling) and public transport. Looking ahead, this could be coupled with a tight fiscal budget.
However, there is a different, important prerogative: New Zealand needs transport infrastructure to facilitate new housing development and population growth.
Analysis of the economic growth profile of New Zealand quickly leads to the conclusion the majority of GDP growth comes from population growth (productivity has seen meagre gains despite technology advances).
This is likely to be more prevalent, as we will get no help from the housing market or cheap sources of capital now interest rates have gone up. Therefore, population growth is the predominant lever for growth.
These local factors driving transport infrastructure growth are solidified by significant global structural trends; most importantly, decarbonisation of the transport system means an inevitable rise in public transport patronage.
Even if the political bias in New Zealand (temporarily) lowers this as a priority, the global tailwind should reinforce the pressing need to improve public and active transport provision. So, this sector should grow in total investment dollars, even possibly in the current political term – but this growth is likely to be funded in different ways.
For the transport analyst, the most likely way forward for public transport is the jump-start that could be provided by private sector involvement. The new draft GPS has a section dedicated to private funding and rightly points out the absence of private sector involvement in New Zealand to date.
This is in stark contrast to other developed countries, in particular high-growth Asian nations that have reached out to the private sector to accelerate their transport infrastructure growth.
This GPS includes references to increased tolling, build-operate-maintain-transfer funding and value-capture mechanisms (designed to align transport investment capital with revenue from beneficiaries of the new infrastructure).
Together with Crown funding and loans to bridge the funding gap in the National Land Transport Fund, there is a mechanism for public transport to move forward.
This only occurs if there is firm and decisive action by the new administration.
There is no evidence of this to date (with only cancellations of large projects so far, and notably all the proposed light rail schemes).
But that is just a feature of the stop-go political cycle that has dogged infrastructure investment for decades. Interestingly, the GPS hints at remedies for this, with an extension of the GPS investment period to 10 years and also an emphasis on delivery of new projects. It is written in a clear, no-nonsense style, and emphasises innovation in digital technology and new financing options.
There are lots of unanswered questions – such as the prioritisation of the lengthy list of roading and rail projects.
It is unlikely these can be completed over the 10-year investment period.
There’s also concern among transport professionals around the wisdom of a large swing in National Land Transport expenditure away from active modes and in favour of reinstatement of the Roads of National Significance (the Rons). These Rons projects should be targeted at key economic growth opportunities and will somehow need to fit within a low-carbon environment that is an inevitable part of our future.
The fact the stop-go cycle for infrastructure is at least acknowledged in the GPS does offer a ray of light.
The transport analyst knows the massive toll on New Zealand economic growth underinvestment in transport infrastructure incurs; it can hold us back.
Enabling efficient and decisive long-term decision-making – decisions made for our children – is the route to success here. One potential avenue to explore, if we are really serious about infrastructure growth, is further independence for NZTA, perhaps releasing the GPS alignment requirements for a package of longer-term transformational transport projects.
The list of these projects is well-known and many are outlined in this GPS. Among them are a second Waitematā Harbour crossing, a rapid, public transport connection from the Auckland CBD to the airport and a prerogative to raise public transport patronage in our main urban centres.
We know this, but we need delivery, innovation and financing options to achieve it – all words used in this new GPS. But it is not words we need.
Andrew Couch is a business case author and a shareholder in ride-pooling start-up Kara.
The change may add $25m annually to costs during a cost-of-living crisis.