We are also geologically young, especially in the North Island, and rain, rivers and lakes are still doing their work on the landscape. Slips and landslides regularly occur, some with tragic consequences.
This rebuild is another huge job. But it has been done before and it will be done again. We need to lean into our resourcefulness, our practicality and our common sense, to get it happening fast.
That means using structures that harness everyone’s skills. The public sector, the private sector and all our communities. There is no place here for the Covid-era mistake that the Government must run everything. There is precious little chance that bureaucrats in Wellington understand how to rebuild, dare I say it, the Three Waters infrastructure of Napier or Waipawa.
There are five key elements for a successful infrastructure build: the funding envelope; a delivery mechanism for spending it quickly and wisely; the people to do the work; the ability to move quickly without excessive red tape; and a method of paying for it all.
If we assume the funding is there for a moment, and it will be, then the delivery mechanism should be front and centre. The Government should take a flexible approach to dealing with each of the key lifeline utilities, recognising where the expertise lies. There is no time to needlessly set up new entities.
Transpower, the electricity lines companies and the telcos are experts in their fields. Their problem will be doing things that improve resilience but which customers don’t want to pay for. In the case of the electricity companies, they are prevented from doing so because the regulator won’t let them recover the cost.
These are sensible models in normal times but they won’t work here. The Government should borrow a leaf from the ultrafast broadband playbook and part-fund the needed investments to get them over the line.
The Three Waters rollout in Auckland, Gisborne and Hawke’s Bay should be immediately halted and those working on it redirected to fixing what’s there.
This reorganisation was a luxury in normal times and is a massive distraction now. We need the shortest path to success.
Some councils won’t be able to afford the expense of repairs, and the Government should partner with them to cover the cost. The same applies to local roads where emergency mechanisms exist to increase the Crown’s share.
The highways are the job of NZTA, but there is a real question mark over whether it can re-focus quickly to do the work.
Urgent flood protection works must be accelerated. This has been on the government to-do list for years, and is the least developed in terms of thinking and delivery. The logical partners are regional councils, but significant funding will need to come from government.
If it was me, I’d re-purpose the broadband rollout company, Crown Infrastructure Partners, as the primary public funder. They are used to partnering with people, understand contracting, and have a good track record of getting things done. They may need some new personnel to come up to speed quickly, but they are the agency most ready to go.
Just spending the money is not enough. One agency needs to have the power to cut through the regulatory thicket of the RMA and all the other restrictive legislation and get things done. In Canterbury that was The Canterbury Earthquake Recovery Authority and the extraordinary powers of the Recovery Act. The same thing is needed here.
We don’t have time for long regulatory processes to agree on plans to protect the Esk Valley or Wairoa from more flooding, or to replace the slumped parts of copious highways. We need to get started and design as we go, as with the rebuild of State Highway One around Kaikōura. This will be a real test of a Government whose instincts on planning reform are more likely to slow things down.
Finding enough people to do the work will be challenging. Many decamped for Australia as roading work wound down. Contractors must see a clear pipeline of work over several years in front of them, so they have the confidence to scale up. The Government’s visa announcement made sense, but nothing will happen without that confidence.
As for how the recovery is paid for, that is a political choice.
There is demonstrably no need for additional taxes. Our second-largest city was completely rebuilt after a devastating series of earthquakes without increasing taxes. At the same time, by any objective measure, the big-ticket public spending areas such as health and education were performing much better for New Zealanders than they are today. And the budget was subsequently brought back into balance.
Careful stewardship of the public purse would ensure these events could be addressed in the same way. All it takes is the willpower of central government.
Ministers seem to be limbering up to “not waste a good crisis” and use the floods to institute some good old left wing envy taxes, which sock it to the productive sector.
I suspect there will be little public patience for such politicking when the country’s economy will need to be running on all cylinders to pay for this investment.
Borrowing too much would also be inflationary, but it beggars belief that after spending increases in the tens of billions over the past few years, the Government couldn’t cut its cloth better to help pay for what’s needed. They could start by junking the preposterously expensive Auckland light rail.
There is much to do and no time to waste. Regional New Zealand will be watching closely. It hasn’t fared well under the current Government. The speed of the recovery in Northland, Gisborne and Hawke’s Bay will be seen as a measure of how much politicians care.
- Steven Joyce is a former National Minister of Finance. He is director at Joyce Advisory.
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