By Graham Skellern
Chief executives want infrastructure development to speed up - off the back of what has already been a significant investment by the National Government.
In the Mood of the Boardroom Survey, CEOs were asked: What should be Steven Joyce's major priority as Minister of Finance? They replied sharply: infrastructure investment now, not later, and improve productivity.
Mike Bennetts of Z Energy says the priority is pace and focus on much-needed infrastructure - "what should the priority order be, what is a reasonable envelope of spend over the medium term?"
An investment banker maintains New Zealand's economic security should be balanced with the need to invest and borrow heavily on right-sizing infrastructure spend to reflect a rapidly growing economy and population.
Joyce became Minister of Finance and Minister for Infrastructure after Prime Minister John Key stood down as the Leader of the National Party in December last year. Joyce had earlier cut his teeth as Associate Minister of Finance and drove the Key Government's Business Growth Agenda as Economic Development Minister.
In his first Budget in May 2017, Joyce allocated new infrastructure investment of $4 billion into the transport, education, justice, health and defence sectors.
He said "the new investment and our total $11 billion commitment of new capital over the next four budgets takes the government's total capital investment over the next four years to $32.5 billion. That's a 40 per cent increase on the past four years."
Treasury is forecasting real GDP growth of 3.1 per cent on average for the next five years, and surpluses growing from $1.6b to $7.2b during that time. Net debt was expected to fall to 19.3 per cent of GDP by 2020/21.
In his Budget, Joyce said more than 200,000 jobs were created over the past three years and a further 215,000 are expected by 2021.
During the election campaign, National announced $10.5b funding for 10 new Roads of National Significance - billing it as the next generation of nation-building projects.
The funding would come from the National Land Transport Fund and the use of public-private partnerships. It also said it would create a new National Infrastructure Commission to lead more public-private partnership (PPP) projects and to utilise National's $32.5b infrastructure investment.
The commission would ensure that New Zealanders get faster access to new schools, hospitals and roading.
Joyce said National had a great track record of delivering transformative infrastructure investments, like the Roads of National Significance, Ultra-Fast Broadband and the Waterview Tunnel. We know how vital quality infrastructure is to the economy and people's lives.
"PPPs are very effective at getting quality long-lasting infrastructure built more quickly and using private capital to stretch the country's capital budget so we get more built.
"The National Infrastructure Commission will be responsible for expanding the number of PPPs so we can grow our $32.5 billion investment and have more new hospitals, schools and transport projects sooner."
National will merge two units from Treasury to form the core of the commission, with an additional $2.5 million a year in operational expenditure.
Joyce, a forthright politician and National campaign manager for the past five elections, also stirred the pot by claiming Labour has a $11.7b shortfall in its fiscal plan, and Labour was planning to increase debt by at least $8b. And he claimed Labour's alternative Budget would increase home loan rates when many New Zealanders had big mortgages.
Joyce has taken up the infrastructure investment challenge, but the CEOs are impatient.
In the Herald survey, Port of Tauranga's Mark Cairns said: "Probably against my vested interest, Auckland's infrastructure has to be sorted out. Waterview Tunnel is a great example of a transport circuit breaker but we need many more of these."
Stephen Selwood of Infrastructure NZ maintains housing and transport in Auckland and regional development nationally must be priorities to lift national productivity.
"We need to reform the local government funding and planning system to drive social and economic development through a partnership between central and regional government."
Thomas Song of Oregon Group wants Auckland's infrastructure and housing supply fixed. "Find the money and get value for whatever is needed to deliver. There's plenty out there, you need to know where to ask."
Michael Barnett of Auckland Chamber of Commerce says it's time for a new economic model that doesn't focus on reducing debt but managing it.
Forsyth Barr's Neil Paviour-Smith advocates Joyce should continue to pursue accelerated infrastructure investment using the Government's fiscal position and balance sheet.
Paul Glass of Devon Funds Management says "our GDP growth comes almost entirely from immigration and GDP per capita is flat or negative.
"We need smarter growth."
Don Braid of Mainfreight was direct. "He (Joyce) should move aside to allow fresh thinking and an investment attitude to prevail."
CEO priorities for Steven Joyce
Accelerate much-needed infrastructure investment
• Improve national productivity growth
• Reduce the corporate tax rate
• Share GST revenue with growing regions
• Maintain steady course of economic growth
The Herald's Mood of the Boardroom 2017 Election Survey attracted participation from 118 respondents. The results were debated this morning by shadow finance spokesman Grant Robertson and National's Finance Minister Steven Joyce.