Bishop’s goal is not to deny voters a say over what infrastructure will be built and where and when. It is to better inform democratic debate early on, and encourage politicians to focus on the medium term rather than making rash short-term election promises of new convention centres, light-rail projects, harbour cycle crossings or medical schools.
Roughly, Bishop’s constantly evolving 30-year National Infrastructure Plan (NIP) will list what will definitely happen over the next decade, what is on track for the following decade and what type of things will probably start in the third.
Whether a new expressway, metro system, dam, wind farm, hospital, major university building or secondary school, each would still need government or private funding. But politicians would not be expected to start adding or subtracting things in the short-term just because their focus groups, donors or powerful party doyens demanded them.
With such politically motivated projects usually turning into expensive fiascos anyway, this should even benefit politicians themselves. The Key Government would have been better off had some inexperienced new minister not decided convention centres would be the new backbone of the tourism industry, just as Zoom was being invented. Likewise, Dame Jacinda Ardern and her colleagues must surely wish she had never mentioned light rail in 2017.
If something has been on the agenda for decades and is now ready to get underway, it’s probably best it does go ahead, regardless of what the government-of-the-day thinks about it.
Likewise, if new ideas just happen to pop into politicians’ minds that haven’t survived years of scrutiny, it’s probably best they not get fast-tracked into election manifestos.
The most important part of Bishop’s NIP will therefore be the Infrastructure Priorities Programme (IPP), which will be updated every six months by the independent Infrastructure Commission, without the influence of politicians, and look at the full 30 years.
Bishop has invited all parties in Parliament to be briefed on the NIP and IPP every six months, and for them to then be subject to a big annual parliamentary debate, like the Budget.
Politicians would be perfectly entitled to disagree with the Infrastructure Commission’s priorities, and to say so. The commission is not intended to be like the Reserve Bank or the courts. But, informed by the commission’s analysis, politicians would be debating what should happen in 15 or 30 years, not the next parliamentary term.
Ideally, parties’ election manifestos would confirm support for the plan for the next decade, and then go on to detail the bits they think should be added or subtracted for the following two decades.
Proof the system works will be when National says that it opposes a particular project in the plan, but knows it is an important priority for Labour and the Greens so that it is staying in, and when Labour and the Greens grant National the same courtesy.
Bishop is from National’s more liberal wing, including on public transport and climate change. He thinks most of the differences across the parties will turn out to be more perceived than real.
He points to the Auckland city rail tunnel, where it was National’s Sir John Key and Simon Bridges who finally pressed “go”, despite Sir Bill English, Gerry Brownlee and Steven Joyce sharing Helen Clark and Michael Cullen’s greater scepticism.
Labour and the Greens – undoubtedly on the right side of history about electric v gasoline cars – must also accept they nevertheless need roads and expressways to drive on, and the straighter and flatter the better for energy efficiency.
Labour’s fiscally conservative finance spokesperson, Barbara Edmonds, also knows she will face an impossible financial position when she eventually becomes Finance Minister or Prime Minister. Her task confronting the post-2030 fiscal catastrophe will be made a little easier if her colleagues are politically dissuaded from dreaming up the 2026 or 2029 equivalents of light rail.
It would be surprising were Labour to reject Bishop’s approach, while the Greens’ commitment to discursive, collaborative decision-making demands they be involved.
There is greater room for political differences over how projects are funded, with National and Act more inclined to use public-private partnerships (PPPs) and strategic leasing arrangements and Labour and the Greens preferring government debt.
There’s something to the left-wing criticism that PPPs merely take the asset and liability off the Crown balance sheet but can end up being little more than expensive ways of borrowing. Act’s Simon Court, an expert in infrastructure development and assisting Bishop as his undersecretary, is promising that those hired by the new National Infrastructure Agency (NIA) will include those with the skills to make the Government a competent and engaged client, able to negotiate with investors to transparently allocate risk and responsibility and agree fair prices and payment schedules.
If he succeeds, it’s difficult to see why Labour and the Greens should object to those PPPs that really will reduce the Crown’s liabilities for maintenance and other risks, and spread the costs to taxpayers and users over many decades.
Yet, if private capital is to be used, the NIA will need to avoid the usual bureaucratic practice of flying around the world begging fund managers to invest in this project or that, but instead package them up so that the total ask exceeds the minimum required by funds’ investment mandates.
Not even our Superannuation Fund would waste its analysts’ time exploring an infrastructure project worth under a billion dollars, and the larger funds most certainly won’t.
Bureaucrats would be unwise even to make a trip to New York, Montreal or Oslo unless a project was worth at least $5 billion. Even then, they would be better keeping their mouths shut and leaving the talking to a suitable investment bank hired for the purpose.
Major funds such as Canada’s CDPQ and CPP have unpleasant memories of their last attempts to invest in New Zealand infrastructure while others remember with amusement efforts by New Zealand officials to get them to invest in rebuilding Christchurch.
Bishop’s approach makes sense, but will achieve little without Labour’s support. Even then, the Government will need to find ways to ensure its new NIA engages with potential investors and construction companies with an altogether higher degree of professionalism than its predecessor government agencies have ever managed.
