Covid 19 coronavirus: Yolanda Huo: Economic stimulus post-pandemic crisis

COMMENT

If I were Prime Minister, I would do three things to stimulate the economy and crank up businesses to take New Zealand out of the economic conundrum caused by Covid-19.

First of all, let's move Ports of Auckland's freight operations to Northport, now. The ports, which would still be used for cruise ships and ferries, should be part of a tourist attraction or a mega CBD centre. It could be a starting point to open up Auckland's waterfront, linking the Harbour Bridge to Mission Bay and St Heliers with cafes and shops dotted along the picturesque route.

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There were rumblings of annoyance recently at ews that a five-story parking building would be built on Bledisloe Wharf to accommodate the current open-space storage for imported, largely second-hand, cars.

Moving the ports will revitalise the Northland Region and free up Auckland's land, roads and sea.

A recent Government report found that upgrading Northport, a deep-water commercial port near Whāngārei, would cost about $10 billion; investment that would create jobs and revitalise the region. It would require a new railway line to connect Northport to the main trunk line.

Second, build a comprehensive network of railways, even bullet trains, to connect Auckland to Hamilton, Tauranga, Palmerston North and Wellington and then, via a tunnel or a bridge across Cook Strait, to the South Island.

With an efficient rail network, the housing crisis in Auckland would ease. Some teachers, for example, who may not be able to afford a house in Auckland, could comfortably buy one in Hamilton and commute easily between the two cities.

International studies have found rail travel is greener and more productive than driving or flying. Trains help alleviate traffic congestion and pollution and provide a safety valve for crowded cities.

Third, it appears we have reached some consensus that Auckland may need a tunnel rather than another harbour bridge, linking the CBD to the North Shore.

• Covid19.govt.nz: The Government's official Covid-19 advisory website

An undersea tunnel allowing the transport of vehicles would create more space and less impact on the environment.

In the case of Wellington, however, it may go both ways to have either a tunnel or a bridge to connect Wellington to Picton.

Cook Strait is considered one of the most dangerous and unpredictable waters in the world. It is 22km wide at its narrowest point.

The waters separating England and France are equally as dangerous but this did not prevent the construction of the Channel Tunnel, a 50km railway tunnel beneath the English Channel at the Straits of Dover.

The same applies to the waters separating Hong Kong, Macau and Zhuhai, where China has successfully built a mega-bridge. The bridge is a 55km network consisting of a series of three cable-stayed bridges, an undersea tunnel, and four artificial islands.

According to BBC news, it is both the longest sea-crossing and the longest open-sea fixed link on earth. It is obviously one of the engineering marvels that amaze the world. If they could build it, why couldn't we?

There are several ways of funding and financing infrastructure.

Institutional investors with a stake in infrastructure have doubled in the past decade.

Allocations among the top 10 global public pension funds with infrastructure investments have more than quadrupled. The NZ Super Fund has already been active in that space. These trends are likely to continue even post-Covid-19.

In many instances, government development of infrastructure provides best value for money. Once infrastructure is developed, the private sector can play a role in operating and the concept of "user pays" can kick in to help sustain the projects.

Infrastructure funding and financing can actually derive from both sides of the equation – supply and demand.

Successes in Japan and Hong Kong have demonstrated that infrastructure can fuel real estate booms. "Rail Plus Property", as a model, capitalises on investment in new or upgraded rail stations by developing and then leasing or selling properties around them.

The McKinsey Global Institute estimates infrastructure has a socioeconomic rate of return around 20 per cent. In other words, $1 of infrastructure investment can raise GDP by 20
cents in the long run.

In any event, given the Covid-19 conundrum, we will need to be bold.

Prime Minister Jacinda Ardern has done a great job in winning the war on this pandemic. The next step is to get those bold ideas assessed, tested and implemented.

• Yolanda Huo is a Year-13 student at St Cuthbert's College.