10 September 2019

Infrastructure sector calls for transformational government reform to fuel New Zealand’s well-being

“Three-quarters of the infrastructure sector have called for transformation, rather than incremental change, of the culture and incentives between central and local government to work together to promote national well-being,” says Infrastructure NZ CEO Paul Blair.

Infrastructure NZ today released the results of Beca-sponsored polling taken during the 2019 Building Nations Symposium from 21-23 August. Over 720 industry leaders attended the conference and were polled after each session on current and proposed policies.

“Respondents overwhelmingly supported more tools for local and regional governments in order to unlock the full potential of our regions.

“Only 2 per cent of respondents believed that water provision should remain in its current state.

“Sixty-six per cent of respondents agreed that water services should not be owned by local councils and instead be delivered by regulated Watercare-type entities.

“City and regional deals, where central and local governments partner to drive regional economic development, also received particularly strong support, with 98 per cent of respondents believing the approach would be useful in our context.

“A core contributor to our governments' inability to respond to complex, multi-faceted issues such as housing affordability and transport needs, is a culture where central and local government lack trust and in fact often compete with each other.

“The city deal model incentivises regional governments with the money and the responsibility to take faster, localised action on the outcomes that matter to communities and the country. It builds a more collaborative relationship.

“Between 65 and 74 per cent of respondents supported a redistribution of central government’s GST, or income and corporate tax revenue, to local governments.

“Our political system has evolved to the point where central government takes 93 per cent of all taxes and rates revenue, leaving only 7 per cent for local and regional authorities. This is highly unusual internationally.

“Our proposal, which almost three-quarters of respondents supported, would double the current $3 billion Provincial Growth Fund into a $6 billion Regional Growth Fund and use it as a tool to align central and local government investment.

“An additional $3 billion over the next three years to regions who cooperate to develop spatial plans would drive regional growth and development for the benefit of the nation as a whole.

“Central government would trial this responsibility-sharing through a city deal-type arrangement where regions would be funded if they commit to and deliver on complex system-wide outcomes such as adequate housing supply, reliable transportation networks, healthy waters, and economic performance,” says Blair.

Greg Lowe, Group Chief Executive, Beca, commented that “New Zealanders want to see their tax dollars invested in projects and outcomes that will improve how we live, work and play in our communities. Encouraging stronger partnership between central and local government would lead to better decisions and more effective funding for regional infrastructure.

“Better long-term planning and a transparent project pipeline will improve New Zealand’s productivity and strengthen our economy. It will lessen the impact of political change and encourage industry to invest with confidence in upskilling our people and creating more jobs in our communities.

“We are not keeping pace with the infrastructure needs of our country and our communities - we need to be able to move together, both public and private sector, to plan and deliver quality infrastructure at a faster pace,” says Lowe.

The full results of the polling, sponsored by Beca, from the 2019 Building Nations Symposium can be found here.

A copy of Infrastructure New Zealand’s thought leadership report “Building Regions: A Vision for Local Government, Planning Law and Funding Reform” is available here.

ENDS

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