On The Nation: Lisa Owen interviews Simon Bridges

Youtube clips from the show are available here.

Headlines:
Transport Minister Simon Bridges says the Government will pay for half the cost of Auckland’s City Rail Link, even if the cost blows out further. He also says the Government isn’t concerned about whether central or local government own the asset.
Bridges says Cabinet will not hold up any move towards road pricing for Auckland, and he is personally open to congestion charges.
The minister denies criticisms that the Auckland Transport Alignment Project is too focussed on roads.
Bridges says he has called mayoral hopefuls Phil Goff and Vic Crone to discuss ATAP.

Auckland is home to a third of our population - and almost every one of those 1.4 million people would likely tell you that the worst thing about it is the traffic.
This week the Mayor Len Brown and the Transport Minister Simon Bridges announced a plan to deal with that - the Auckland Transport Alignment Project.
The report suggests that the most effective way to cut congestion is decreasing demand with road pricing - so I asked Simon Bridges why wait a decade to bring it in?

Simon Bridges: That isn’t about making money, from our perspective. It is about demand management. I think what the report says and why this is worth talking about and doing some very serious work on is that effectively once we’ve done that investment, once we’ve done the $24 billion or whatever it will turn out to be over the next decade, we would have fundamentally built the network. And you can keep doing more and more roads. You can keep doing these things, but you also need to do something else as well.
Lisa Owen: I want to focus in on it, Minister, as to why you won’t bring that in in the first decade. Because you say it’s about managing demand, and this report says that peak-hour congestion isn’t going to ease significantly until you introduce these kinds of charges.
Sure.
In fact, it says it’s going to get worse until you do that. So why not just do it now?
And I think, look, the report sets out a very cogent, actually, I would argue compelling case, but I think this should be seen as a journey, if you like, with off-ramps on it. And I say that because it is very—
What do you mean by that?
Well, what I mean by that is it’s not necessarily so it will happen. I think there’s a huge – and my officials tell me – there is a huge amount of work that needs to be done to get to a point where we could say yes. We could look at some trials. We could look at sort of moving this along. And I say that because—
But this report that you agree with and presented this week, it says you need those things to ease congestion at peak travel times. You’re not going to introduce them for 10 years at least. Why not? Why not just do it now?
I think, Lisa, even if I said, and this is not my position, ‘Right, you’re right. Let’s do this. Let’s do this today,’ we couldn’t do that. There is not the sophisticated, without getting technical about this, because I’m not a technical guy, but modelling in place where we could go out and say, ‘Okay, let’s just slap down this model.’ We will need a multiagency unit or project, call it whatever you like, that I want to discuss with the new mayor and council to set about doing the serious, substantial work over a period of time.
One of the potential contenders for that position of the new mayor, Phil Goff, thinks that some of these things could be brought in between four and five years. So I’m wondering is the problem Cabinet? Is that where you’ve got a problem with pricing?
No, I don’t think so. Look, I think the best—
So Cabinet’s fine with road pricing?
I think we’re open to explore this, and we’ve got a serious report that, as you say – you read out some of the quotes there – it makes a cogent and compelling case. But it’s not government policy, and I think before we would get to that point – in fact, it’d be negligent to be in any other position – we need to see the significant work. We need to see how this is going to stack up, because, and I’ll make just this final point—
The significant work is in here, isn’t it, Minister? It’s telling you. It’s got the facts.
I’ll make this final point—
If you introduce those road charges by 2036, you can drop the amount of time spent in congestion in the morning down to 21%.
There are countries in Asia, for example, I think possibly Europe as well where they’re down the track a bit on this, but there is no country in the world that has a fully fledged, what they’re talking about in that report, variable network pricing system. And so I’m open to it. I accept this, but I don’t think it is a case where, as I say, we could simply slap this down and be ready to go. There’s a lot of work, there are off-ramps, and there has to be because done badly, it could be an appalling model. Done well, it could really aid, as the report says, the issues that Auckland has in relation to congestion.
So just to be clear, you could get congestion charging or road pricing across the line with Cabinet? Are you confident you could do that?
Well, it all depends on what we see in terms of the work. We’re not there yet. We’ve got the reports. We’ve been open to that. If you go back a couple of years ago, I don’t think the Government was in a position to say, ‘Oh, yeah, we’d be open to that.’
That’s not the hold-up? That’s categorically not the hold-up?
No, it’s not the hold-up.
Dissent in Cabinet?
No. There’s a report here. We’re very open to it, but it would be negligent to not do the serious work in this area before we said, ‘Right, this is something we could do.’ And I think the other point is before you do it – and this is why I say there’s that need for the additional investment – before you do it, you do have to have public transport options in place, because otherwise you’re effectively taxing people without having the other options in place.
Regional petrol tax – you don’t need to have necessarily other options in place, public transport?
No, that’s right, but I’ll tell you why the Government is incredibly loath in relation to a regional petrol tax. It’s because effectively it would be an entirely new year for our regions. There’s a number of fish hooks with that. Let me give you just one. It would end up—
But it could replace the levy, the levy that will expire in the next couple of years.
Well, it could. Council’s got a range of options that it will, I’m sure, be looking at, but the Government’s loath. The reason for that is because it is an entirely new tax that we don’t have. Look, as a National government, we philosophically want to make sure we’re very cautious before we do that.
Okay, well, you’ve said that is this plan rests on a conversation with the new mayor buying into it. Now, you called Phil Goff to talk this through, didn’t you?
Yes.
Did you ring Vic Crone?
Yes.
Okay. The thing is, for both of them, a number of their priorities are not in this plan in the timeframe that they want.
And I think that’s exactly the value of ATAP, because we’re all entitled to our views. I’ve got views on projects I think particularly or potentially could be forward and so on, and this is not a plan that’s set in stone. But we’ve got one serious candidate who wants a Waitemata Harbour crossing much earlier – a several-billion-dollar project. The other one, of course, here wanting light rail. Actually, ATAP is about going through the evidence, having officials do that in a serious way on the basis of value for money and congestion and not just sort of, ‘This is my project. This is my project.’ It’s entirely designed to change the way of thinking about that.
And to align – that’s why it’s called the Alignment Project – to align both sides of the fence and their thinking, but the thing is you’re aligned into, what, the local elections and then you could be on completely different pages.
I don’t think so. The important thing we want to keep with ATAP is basically that approach. Actually, let’s be evidence-based. Let’s have officials from all sides and independent experts do the work, and let’s try and do this on the basis of an integrated value-for-money type approach. My conversation with Phil Goff and my conversation with Vic Crone makes it pretty clear to me. Actually, I’m pretty confident they can sign up to that sort of an approach. Indeed, the current council I think unanimously signed up to that approach. They can see the value for the first time ever of government, both centrally and locally, working so closely together.
Okay, another thing that caught my eye in this report was ride-sharing as a congestion solution.
Yeah.
You’re talking about carpooling and commercial options like Uber and incentivising that. How are you going to incentivise that?
Well, look, let’s see, but I think potentially this is a very big deal. Let me give you the stats here – 1.2 people per car in Auckland at the moment. You get that up to two, you’re making a really big difference. I mean, you raise an interesting—
But how do you do that? The important point here is how you do it, so how are you going to incentivise it?
Firstly, you’ve got to have the regulatory regime in place that enables this. We haven’t had that. We’ve got one that’s set back in the 1980s introduced to Parliament this week.
But how do you incentivise people to share cars? How do you do that?
Well, I think, actually, what we’ve seen around the world, make it London or make it a small-town area in the United States of America, people don’t necessarily need the incentive. They want to do it because they know convenient it is.
But why aren’t they doing it now? If they’re open to it, they could do it now.
I think it will happen. I think there’s a number of things that need to happen. Firstly, I make the point – the regulatory regime needs to change. We will have, I think, one of the most enabling regimes in the world when the laws that I’ve put into Parliament this week are changed. In fact, I’ve got a letter from Uber this week congratulating me because they see the benefits of it. We can have a lower-compliance level playing field that’s really going to create competition in this area. But you’re right. I think this is one of the game-changers. I actually think the reforms that I’ve introduced to Parliament are perhaps the most significant thing I’ve done in my career to date.
So if you’re going to ask people to do this, are you going to lead by example yourself? Are you going to start carpooling with Clayton Mitchell?
Possibly. If he’s up for it.
Is that a commitment?
He lives in a different side of town, though, so to get to the airport, that’s not necessarily going to happen, but—
You need an incentive. You need an incentive to carpooling, Minister.
No, I don’t need an incentive to do it with my neighbours, because, actually, what I know is this—
But you’re not doing it now.
No, I’m not, because there’s not a service in New Zealand. Actually, the law doesn’t fundamentally allow for it.
Okay, we’re running out of time and there’s a couple of things I want to cover off. This week you sealed the deal for paying half of the Central Rail Link, but half has got a lot bigger than before. Are you worried about that? Is there a cap to the spend for you?
I’m not worried. In a sense, there isn’t a cap, without being ridiculous about this in as much as we now have an—
So you’ll pay half of whatever it takes to get the CRL?
We have an agreement for that. I mean, of course, if we found that this was so much more, and it won’t be, that might change things, but in principle—
So how much is too much, then?
Well, I can’t say. In principle, we are at half. Bear this in mind, though. The ultimate—
Half of no cap?
Well, basically, the ultimate arbiter of this is going to be the marketplace. And the council and I are joined at the hip in terms of getting best value for money. There’s no question this will be the most expensive public transport project we’ve ever seen.
Phil Goff is worried about how much this is looking like it’s going to cost and the potential blowout here, so are you saying half, no cap? You’ll pay for half?
Look, what Phil Goff has also said is he’s committed to the project and he wants to see it happen. I share his concerns. I’m not worried. I want the best value for money contract I can get. We’ll be going out to the market—
Minister, you’re up for half of this, so I’m just wanting to clarify.
Correct.
Half of whatever it costs is basically what you’re saying?
Yeah, but let’s be clear. We’ve got a range here that we believe is realistic – between 2.8 to 3.4. We have had a variety of independent—
But what if it’s 4 billion or 4.5 billion? Will you pay half of that?
Well, I’m not going to get into those sort of hypotheticals. I think we’ve got a situation now, we’ve got a realistic range—
But that is realistic given that you’ve got, what, almost a billion-dollar increase in the estimates already.
We will be working incredibly hard, and, actually, I think this is a big part of why the central government does need to be in this project, because we have got the skills through the likes of the Transport Agency and others to bring to better this project, to get the best value for money we can. And, look, clearly you’ve seen in the council reaction—
So you can’t commit now to half if it goes over 3.4 billion?
Well, look, I can. What we’ve got here is a situation where we have signed a legally binding heads of agreement for half of the share of the CRL.
Okay.
But clearly, to your point, there has to be some realism in this. I’m not going to give you a figure. I don’t have a figure in mind. If it goes over a certain amount, clearly you’d be wanting to work out why that was and do your best to get that down.
Who will own it, Minister?
We haven’t made a decision on that.
So if you’re paying 50% and the Auckland ratepayers are paying 50%, will it be a 50-50 ownership deal?
That’s possible. There’s arrangements in place at the moment.
Probable?
No, I wouldn’t go that far. I don’t think, actually, the Government fundamentally has that big an issue about the ownership arrangement. What we do—
So you’re okay with Auckland owning it, the City Rail Link?
We’ve got to work through that. There’s, under the heads of agreement, going to be a sponsor’s agreement that will go through that level of detail. I think what we do need see, though, is that it’s going to be a safe, operationally well run operation, given the investment.
You’re open to Auckland owning the asset 100%?
Well, I don’t think we have a fixed position at this time because we’ve got to work through that detail.
Okay, finally, you’re talking about use of technology to ease congestion, and one example that you’ve mentioned is drones.
Yeah.
I mean, how’s that going to work, realistically?
Let’s be clear before I get cartoons and caricatured about this – this is not some serious part of our strategy for congestion in Auckland. But what I will say, seen as you’ve asked, is this. We’ve now got, a bit like I’m trying to do in the Uber space, the most enabling rules, I think, in the world. We’ve seen 50, 60, about 70, I think, applications in this area to do new things in New Zealand. We’re seeing great innovation in cinema and a range of areas. Actually in Auckland, we will have the first commercial ongoing trial of drone technology with cargo in the world. I’m told we’re one to two years—
So you’re talking about courier packages, mail?
That’s right.
This kind of stuff?
And let’s—
But at the moment there are restrictions about flying over people’s houses and all the rest of it. Realistically… That’s not realistic, is it?
Well, there’s a complicated set of rules here, but we have a position in New Zealand where if the risks can be managed, anything can be done. And of course we’ve got to take safety very seriously.
Because your critics would say you’re ignoring the straightforward answers to this problem – get people out of cars, into trains and buses, invest in public transport and apply road pricing, forget your drones.
$1.7 billion into CRL, 1.7 to the electrification of rail in the last little while – a very significant package here of $24 billion worth of investment I think proves those critics wrong.
All right. Thanks for joining us this morning, Minister.
Thank you.
Much appreciated.

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