National leader Christopher Luxon said trillions of dollars were held by institutional investors overseas looking to invest in safe things like infrastructure.
He said New Zealand should tap into some of the funds to fund its transport projects.
“There is $11 trillion in sovereign wealth money around the world, there’s over $50 trillion in pension funds around the world and they want to invest in infrastructure projects including in New Zealand,” Luxon said.
Prime Minister Chris Hipkin said it was tantamount to a $10b “hole”, saying the $9.5b of funding would still need to be paid for somehow.
“They think the Infrastructure Commission can just magic up $10b out of nowhere. I think they should be up front with New Zealanders about where that funding is going to come from.
“Even if it was coming through things like private equity, like public-private partnerships, someone still has to pay for that. There’s still got to be a revenue source associated with that and they don’t seem to know where that is,” he said.
Wellington’s Transmission Gully was built with private funding by the Wellington Gateway Partnership, but the Government raeportedly pays more than $100m a year for its use.
If National uses nearly $10b worth of similar arrangements, it would put pressure on the Government to front up with similar sums to pay the people who have invested in the roads.
The party said it was open to tolling and congestion charging to raise additional revenue, however it has also said it has no plan to lift fuel excise duty or road user charges next term, beyond ending the EV exemption from road user charges.
The National Land Transport Fund, Waka Kotahi’s pot of transport money earned mainly through fuel taxes and road user charges, is under strain thanks to people driving less and using more efficient vehicles, and because of the exploding cost of infrastructure.
Pressure on the fund means it could have difficulty funding new infrastructure, and paying charges to service other projects.
Luxon said “value capture, targeted rates, public-private partnerships, toll roads, other things like that” were options for servicing that debt.
On Tuesday Hipkins added further confusion to his ambiguous remarks about Auckland Light Rail.
On Monday, he committed to the project as the head of the government, but would not say whether the Labour Party would continue to campaign on the plan.
The light rail scheme has not started construction, and there is speculation Labour might walk from the policy, having campaigned on it at the 2016 Mt Roskill byelection and the 2017 and 2020 general elections.
The current cost of the scheme is $14.6b.
Hipkins said he was awaiting a detailed business case on the project before making a decision.
“The point of investing in a business case is you actually get an evidence base to make those decisions,” he said.
The Government’s preferred option is for a partly tunnelled project, but Parker on Monday said it could err towards a cheaper surface level option.
“We are in the process of requesting the Auckland Light Rail Company to do more analysis as to the surface option, economics and cost-benefit analysis of that,” Parker said.
“That’s something the Mayor of Auckland, Wayne Brown also wants us to do and we agree that’s prudent,” he said.
Act capitalised on the uncertainty over National’s funding by touting its own private sector-led funding arrangements.
Its transport spokesman Simon Court could not give any more definitive answer over how both parties would attract and pay for the private finance that would fund their roadbuilding, but he said Act’s 30-year infrastructure plans would allow more local input into what gets built in an area.
“It’s one thing to say you want more roads. It’s another thing to pay for them. Act has a clear framework for commissioning, funding and financing roads with locals getting a say,”
Green Party transport spokeswoman Julie Anne Genter said National and Labour’s pivot towards roading showed the Greens were “the only grown-ups in the room on public transport”.
“The question most people will understandably be asking themselves is ‘what are we to do when the two major political parties lack the courage to get on with what we know is needed?’ Every three years, uncertainty wins the day rather than a clear promise to invest in buses, trains and bike lanes. It means our streets will continue not working well for anyone, including for people who drive,” she said.
Thomas Coughlan is deputy political editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.
