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Home / Business

Fran O'Sullivan: Simon Bridges can't bluff a dud poker hand

Fran O'Sullivan
By Fran O'Sullivan
Head of Business·NZ Herald·
30 Jan, 2020 04:48 AM4 mins to read

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National Leader Simon Bridges. Photo / File

National Leader Simon Bridges. Photo / File

COMMENT:

Simon Bridges must not have heard of the old poker maxim: "If you can't work out who is being screwed, walk away from the table because it is you."

Bridges' claim that the Government has stolen National's infrastructure policies by announcing a big spend-up on roads elicited a polished response from the Coalition Government. At its most basic this simply boils down to "Diddums".

READ MORE:
• Liam Dann: The $4 billion hole in the big infrastructure announcement
• Auckland motorways, Harbour Bridge Skypath big winners in Govt's $12b infrastructure spend-up

It would have been more productive for the National Leader to throw his cards back on the table and open a new attack game.

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But he dug himself into a corner by claiming (erroneously) that the Government had no new ideas of its own when it came to infrastructure.

Problem for him is the Government is on solid ground to say Bridges had plenty of opportunities himself, back in the day when he was National's transport minister, to ensure funding for projects like Auckland's Mill Rd and Penlink; two projects which have long been promoted to open the way to vast new housing projects in Drury (to Auckland's South) and commercial estates on the Whangaparaoa Peninsula, and, to get them under way.

But that did not happen.

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These projects did not emerge from the previous National Cabinet holding some sort of policy seance.

They emerged through sensible bureaucratic planning processes to evolve transport projects to meet Auckland's need to meet population growth projections.

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Not only will there be new roads - but as Transport Minister Phil Twyford indicated to me - there will be a strong focus on multi-modal transport including mass transit, dedicated cycleways, the expansion of rail lines and new stations.

These are covered elsewhere in detail in today's Herald.

What Twyford has not spelled out yet is whether the Coalition is intent on building a true satellite city to Auckland's South to soak up housing demand. The Mill Rd developments will pave the way for major house building projects which will be akin to a small NZ city.

But this needs to be accompanied by full plans including services such as schools and a district hospital. These may surface as Twyford puts the finishing touches on his urban development plans.

The Government has cleared the way for housing authorities to issue bonds to fund developments. But the detail has yet to be played out.

The other missing element is the light rail package for Auckland.

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As expected Finance Minister Grant Robertson has reserved $4 billion of the $12b infrastructure package for future projects.

Twyford will take two competing options for Auckland's planned light rail development to Cabinet in early March.

The NZ Super Fund promoted project - which Twyford has described as a "PPP" (in this case short for public-public partnership) will not involve a huge upfront drain on direct Government funding.

The traditionally funded proposal, which originated from Auckland Transport's planners, would be a "design build" project funded from public funds.

This is the field on which Bridges should focus his attack by demanding absolute transparency when it comes to Government decision-making on which competing mechanism to choose. If the Government opts for the Super Fund option, will there be hidden contingent liabilities? Is the Auckland Transport originated scheme - which the NZ Transport Agency (NZTA) put to the market for competitive tender on the procurement front - simply there for competitive tension? If so, that is a slap in the face for private sector companies who tendered in good faith.

The $12b infrastructure spend-up will boost the economy. Treasury estimates it will give the economy a $10 million boost over the next five years while providing an additional boost to productivity over time. NZTA estimated its projects alone will generate up to 1000 jobs in the first year and 7000 to 9000 jobs in the wider supply chain.

Yesterday's announcement was simply the first salvo in the election campaign.

The Coalition Government still has $4b of the $12b up its sleeve to fund new projects in the run-up to September 19 election.

This will challenge Bridges.

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