Winston Peters Speech: Building A Road To Somewhere

As each wave of migration – be they the earliest Polynesian navigators or more recent voyagers from Europe and elsewhere – came to New Zealand, they saw a land of opportunity and potential.

They landed somewhere between –36 or –45 latitude and 174 longitude to find a small, isolated nation, located largely on two long and narrow Islands with several kilometres of rough waters between them. This presented them with unique infrastructural challenges, the same challenges we face as we seek to preserve and enhance our first world status.

Our geographical reality is not new, and the distinctive reality we confront was interestingly addressed by one of the more visionary of our early political figures, the illustrious premier Julius Vogel.

Vogel saw that in an industrialising world, the key to New Zealand’s future prospects lay in having developed infrastructure. He understood this meant ports, roads and railway networks which were inter-connected and effective in linking our people and our commerce.

Vogel also understood that only a coordinated effort through the central government could effectively achieve this. He knew that if left to individual provinces or in private hands, these national level infrastructure projects would be undermined and frustrated, and in reality would never occur.

His great vision as premier was to plan for and in set in motion the foundations for building this much needed infrastructure, the legacy of which remains with us today.

Sadly, despite Vogel’s great vision, New Zealand is going into the 21st century with a huge lack of coherency and direction to its infrastructure.

It is my privilege to serve as the Member of Parliament for Tauranga, one of the most critical and fastest growing ports in New Zealand. However, as anybody who knows anything about ports will tell you, ports in and of themselves are useless unless you can get goods to and from them.

Today I want to tackle many of the myths that have grown up around road transport infrastructure in New Zealand, and explain why perpetrating them on New Zealanders can only limit the progress of our infrastructure and by implication our economic growth over time unless they are addressed. Getting our roading infrastructure right is not an option, it is absolutely essential if we are to remain on a competitive footing with other developed nations. We are an export driven nation and roading infrastructure lies at the core of transporting our export goods. However today, in the time I have available I want to focus on just two aspects of the transport debate; the vexatious issue of funding and the strategic planning and consents processes which surround this issue.

Let us be clear about the nature of the myths which exist in relation to funding.

Myth number one perpetrated by this current government, although they are not alone in having done so, is that there is not sufficient funding for roads and transport infrastructure in general.

This is unfortunately a myth, wrapped up in a lie and underpinned by a deceit which has stifled any constructive debate on the issue.

In New Zealand, like many other developed nations, we have a so-called dedicated petrol tax which is meant to go towards roads and transport infrastructure. Yet it does not.

We go through a convoluted pretence each budget cycle of allowing funds that we know should be going into roads to go elsewhere. Now think carefully about this. Most of you here know that this happens, some may even decry it and yet it continues.

The reality is that around half of the money collected in petrol tax is directed toward roads and transport infrastructure. The rest remains in the consolidated fund to be spent how the government sees fit.

What exactly is the government spending this taxpayer money on? Well we know that a significant chunk is now to be paid to prisoners who claim to have hurt feelings or don’t have a fluffy pillow. We know that over $50 million has gone to Maori television, which no one watches and which has gone through three CEOs in less than three years.

We also know that such frivolous spending such as hip hop tours have been funded by this government out of taxpayer funds. The list is endless and I could go on, but you get my point.

One might be able to make an argument for diverting petrol tax away from roading and transport infrastructure if it were for saving lives through medical research or something equally noble.

But the reality is that it is not, it is instead being spent on trivial and inconsequential activities of little or no merit.

Yet the myth continues. As if to add insult to injury, we then have the Government adding four cents a litre to the price of petrol last year for the explicit purpose of addressing roading. This occurs with no recognition that the funds already exist, but they are simply being diverted elsewhere.

The taxpayer is now being forced to pay twice.

The Government is about to do it again with the Customs and Excise (Motor Spirits) Amendment Bill, where it intends to raise road user charges on diesel vehicles of five tonnes or less.

Quite simply, if the money that was taxed through petrol went to transport infrastructure as it was intended, then instead of spending around $1.3 billion on infrastructure this would be closer to $2.5billion.

This leads me to the second myth; that is our comparative spending with other nations. This current government has the gall to claim it is keeping pace with the top nations of the OECD when it comes to infrastructure spending.

This is a myth. The reality is that we spend under 1.3 per cent of our GDP on infrastructure and this is the OECD average. I would suggest that if the Government was ever really serious about seeing New Zealand move back into the top half of the OECD it would address its inadequate spending on infrastructure.

As the recent Allen report (a good document and I would commend it to all of you to read) clearly shows, there is a direct correlation between spending on infrastructure and economic growth.

You cannot have one without the other. If you want growth and more importantly sustained growth, you must have corresponding levels of spending on infrastructure.

The irony of all this is that this spending always pays for itself several times over, so really must always be viewed as an investment with a guaranteed return.

The converse is also true, and New Zealanders know this all too well. If you let infrastructure run down, then this not only limits growth, it also becomes a huge burden to the economy.

Now I want to address a third myth in relation to funding for roads before we move on to some solutions and planning issues.

This current government is fond of saying that money is not the issue and that more money alone will not solve the problems associated with infrastructure. On one level this is true and we will come to that shortly. But this has also become a cop out by the Government.

Herein lies the myth. There is no doubt that with increased funding projects would move faster. From the consent stage though to actual construction, every stage would run more smoothly and quickly with more funds and anybody who says otherwise is simply peddling nonsense.

The Government’s answer to this has been to put forward the idea of Public/Private Partnerships or PPPs. While on the surface they may have some appeal they are fraught with great dangers. This is because the nature on PPPs in transport infrastructure essentially equates to tolls on roads. Yet the entire concept need not be considered because as I noted previously the money already exists, it has just been diverted elsewhere.

Additionally, the concept of PPPs relies on dubious accounting principles, which I don’t have the time to outline here, but which at their core seek to hide exactly where indebtedness and liabilities lie.

Now New Zealand First is a party of solutions and I have a few for you today.

Our first priority must be to stop the nonsense of petrol tax being diverted into consolidated revenue. Unfortunately due to the level of tax commitment that has been allowed to be diverted into consolidated revenue, this will have to occur over time.

My commitment then to you is that New Zealand First will, when we are next in government, begin the process of moving petrol tax back toward the purpose for which it was intended – funding transport infrastructure, particularly roads.

How do you know we will deliver? Well look at our track record. Even the current government acknowledges that when we were last in government we had began this process.

It was a modest gain, but in 1998 we ensured that an extra 4.2 cents a litre went directly to roading, on top of what was already allocated. And remember, this was when National was still part of the Government. So you can see we are serious about this.

While we remain committed to reclaiming this funding for roads, we must also acknowledge that in the short term this still leaves us woefully short of what we need to spend.

In light of this New Zealand First also supports borrowing in the short term to get many essential projects completed or underway. Indeed we support the Allen report’s recommendation that we borrow up to $2.4billion to address areas of critical need such as Auckland, Tauranga, Wellington and over 400 passing bays which need to be completed.

This borrowing must be looked at in terms of the return which it brings, and also at the cost of not doing so. As I noted earlier, infrastructure investment directly corresponds with economic growth.

Now this is a lot to borrow, so it is worth asking ourselves why this industry is so vital. Over 80 percent of all freight in New Zealand is carried by trucks – interestingly this parallels closely with other developed nations.

The road transport industry employs either directly or indirectly around 45,000 people. It is a big player in our economy at many different levels.

It is also worth noting that our road transport industry clearly reflects New Zealand’s dependence on small and medium sized enterprises, with many of the businesses in the industry employing 20 or less people. These are more intimate and often family based businesses, with unique needs.

While I don’t intend to address this issue directly today, it is worth noting that a reduction or increase in freight rates has a dramatic impact on the viability of the industry.

For example one study suggested that a 10 per cent reduction in freight rates would not only create and estimated 33,000 new jobs, but that it would increase both exports by 3.9 percent and GDP by 3.7 percent.

The converse is also true of course. An increase in freight rates would cost jobs and reduce exports and GDP.

Now we cannot address road transport infrastructure without addressing the planning phase and more specifically the RMA.

Clearly infrastructure planning at all levels has become a nonsense in New Zealand. From the annual embarrassment of Transit and Transfund announcing their priorities for the next ten years, which foolishly seem to change annually, through to frustrations at getting resource consents at local government levels.

The issues must be addressed, and like Vogel more than a century ago, they require bold and visionary leadership that will not accept that just because things have always been done a certain way, things must remain that way.

For infrastructure to work, it requires both centralised and local long term planning, funding to match and a coordinated approach. While Transit and Transfund would claim this is occurring, clearly it is not working adequately and needs revisiting.

We must also be bold in attacking the RMA. New Zealand First is committed to removing many of the bottlenecks that exist in the RMA. This includes strengthening the pre-hearings and hearings stages. We will also limit the appeals process.

Most importantly, we will remove the nonsense of the so called ‘principles of the Treaty” from this legislation.

Time does not permit me to go into more detail, but my brother Jim is releasing a RMA policy paper outlining the details this week, and I commend it to you.

In conclusion let me re-emphasise the points I made earlier.

We must debunk the myths surrounding road transport funding in our nation. We must not pretend the money is not there and we must be courageous in funding road transport infrastructure properly. Our economic future depends on it. We must also address our planning and consent processes.

Let us continue the legacy Vogel left us, to be bold and visionary. Resolving this issue is not beyond our control – it simply takes the political will.

In 2005 that political determination will lie with New Zealand First.

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