1 00:00:00,120 --> 00:00:03,160 Speaker 1: Question, how concerned should we be about the regional infrastructure 2 00:00:03,200 --> 00:00:05,600 Speaker 1: money that's now tagged as at restort to the Prime 3 00:00:05,600 --> 00:00:07,960 Speaker 1: minister about this yesterday we're talking half a billion dollars worth. 4 00:00:08,200 --> 00:00:11,720 Speaker 1: Crown Regional Holdings is suggesting half of the money is 5 00:00:11,760 --> 00:00:14,400 Speaker 1: at some risk of default. Now Leggett is the Chief 6 00:00:14,400 --> 00:00:17,680 Speaker 1: Executive of Infrastructure New Zealand and is with us Nick morning. 7 00:00:18,320 --> 00:00:18,840 Speaker 2: Hello Mike. 8 00:00:18,960 --> 00:00:21,239 Speaker 1: So we've got two different things going on here, or 9 00:00:21,280 --> 00:00:23,320 Speaker 1: the Prime ministers tried to explain these two different things 10 00:00:23,320 --> 00:00:26,599 Speaker 1: ones that labor the regional growth thing and this is 11 00:00:26,640 --> 00:00:30,360 Speaker 1: slightly different. Are they different or are they basically the same? 12 00:00:30,360 --> 00:00:31,280 Speaker 1: And we should be worried? 13 00:00:31,960 --> 00:00:34,440 Speaker 2: Well, I think there's a mix of projects here, like 14 00:00:34,680 --> 00:00:37,320 Speaker 2: some of them, some of these loans that are held 15 00:00:37,320 --> 00:00:41,400 Speaker 2: by Crown Regional Holdings were about funding businesses. And I 16 00:00:41,440 --> 00:00:44,200 Speaker 2: don't know about you, Mike, but I always get nervous 17 00:00:44,240 --> 00:00:48,640 Speaker 2: when the government picks commercial winners because usually they don't. 18 00:00:49,159 --> 00:00:51,200 Speaker 2: But a lot of these of what are of course, 19 00:00:51,360 --> 00:00:54,960 Speaker 2: regional infrastructure projects, and I don't really think it matters, 20 00:00:55,120 --> 00:00:58,240 Speaker 2: you know which fund they came from. If they've gone 21 00:00:58,520 --> 00:01:04,280 Speaker 2: towards building infrastructure, they've probably done good work. But we 22 00:01:04,400 --> 00:01:08,280 Speaker 2: need to know what was the case that justified the investment, 23 00:01:08,520 --> 00:01:12,120 Speaker 2: and then are the investments actually providing the economic and 24 00:01:12,280 --> 00:01:16,200 Speaker 2: productivity gains that were envisaged? And I guess the problem 25 00:01:16,280 --> 00:01:19,520 Speaker 2: with all this is we just don't have that sense 26 00:01:19,560 --> 00:01:21,040 Speaker 2: of transparency here, do we? 27 00:01:21,200 --> 00:01:21,280 Speaker 3: No? 28 00:01:21,400 --> 00:01:23,360 Speaker 1: We do not. So is that making it more political 29 00:01:23,400 --> 00:01:25,160 Speaker 1: than it does business? Or sense? 30 00:01:25,240 --> 00:01:29,600 Speaker 2: Well, this is political, isn't it? Because Crown Regional Holdings 31 00:01:29,720 --> 00:01:32,360 Speaker 2: is just the holding companies for the loans that government 32 00:01:32,400 --> 00:01:35,160 Speaker 2: have given out. I don't think we should beat up 33 00:01:35,160 --> 00:01:37,880 Speaker 2: on them too much because they haven't made these decisions. 34 00:01:37,959 --> 00:01:42,560 Speaker 2: They're just overseeing the loans and the structure of the 35 00:01:43,080 --> 00:01:47,000 Speaker 2: lending and obviously the payback. What we should be looking 36 00:01:47,000 --> 00:01:50,640 Speaker 2: at is how are these have these investments performed? Because 37 00:01:50,880 --> 00:01:55,240 Speaker 2: there is a case for the government seeding particularly physical 38 00:01:55,280 --> 00:01:59,800 Speaker 2: infrastructure projects with loans if that's going to attract private investment, 39 00:02:00,080 --> 00:02:02,240 Speaker 2: if it's an you know, if you think about flood protection, 40 00:02:02,440 --> 00:02:06,360 Speaker 2: or regional airports or even some roading in some cases here, 41 00:02:06,840 --> 00:02:09,480 Speaker 2: I think people would agree that's a good investment in 42 00:02:09,520 --> 00:02:12,800 Speaker 2: a country that sometimes you know, small communities sometimes struggle 43 00:02:12,880 --> 00:02:13,880 Speaker 2: to fund these things. 44 00:02:14,040 --> 00:02:16,440 Speaker 1: If I gave you four hundred and thirty three million 45 00:02:16,440 --> 00:02:19,160 Speaker 1: dollars though, and told you to do a proper job, 46 00:02:19,400 --> 00:02:21,799 Speaker 1: what percentage would you expect to be burnt? 47 00:02:23,840 --> 00:02:27,600 Speaker 2: Well, a lot less than fifty percent, right, And that's 48 00:02:27,639 --> 00:02:30,600 Speaker 2: to me, The question is, well, how the projects selected? 49 00:02:30,639 --> 00:02:32,440 Speaker 2: What were the and I mean I know that these 50 00:02:32,480 --> 00:02:34,360 Speaker 2: are sort of terms that he used a lot, but 51 00:02:34,400 --> 00:02:37,720 Speaker 2: what was the sort of the business case? And then 52 00:02:38,400 --> 00:02:40,520 Speaker 2: what we don't do in New Zealand for anything we 53 00:02:40,560 --> 00:02:42,760 Speaker 2: build is we don't look over our shoulder and understand 54 00:02:42,800 --> 00:02:46,400 Speaker 2: what the benefit was. And I don't think benefits or 55 00:02:46,400 --> 00:02:49,280 Speaker 2: potential benefits have been assessed properly here or we wouldn't 56 00:02:49,320 --> 00:02:52,920 Speaker 2: know because we don't have that transparency. But also there 57 00:02:53,040 --> 00:02:56,080 Speaker 2: might be cases here where there might be some struggles 58 00:02:56,080 --> 00:02:59,480 Speaker 2: for payback, but actually that the project is doing its 59 00:02:59,600 --> 00:03:02,359 Speaker 2: job the less because it's contributing to a local economy. 60 00:03:02,360 --> 00:03:03,920 Speaker 1: Do you worry, you say, don't be too hard on 61 00:03:03,919 --> 00:03:06,160 Speaker 1: the CRH. Do you worry that they've not been able 62 00:03:06,160 --> 00:03:07,840 Speaker 1: to put their audit papers in on time because they 63 00:03:07,880 --> 00:03:09,640 Speaker 1: can't get the information? Doesn't that a red flake? 64 00:03:09,840 --> 00:03:12,600 Speaker 2: Yeah? Oh absolutely it is, and that's something we should 65 00:03:12,639 --> 00:03:15,200 Speaker 2: be demanding. But I mean I suspect that was the 66 00:03:15,280 --> 00:03:18,239 Speaker 2: nature of how these investments were set up. And that's 67 00:03:18,240 --> 00:03:18,600 Speaker 2: when I. 68 00:03:18,639 --> 00:03:22,960 Speaker 3: Say they are dealing They are dealing with somebody else's 69 00:03:23,520 --> 00:03:27,800 Speaker 3: mess in some cases. And what we've got to do 70 00:03:27,919 --> 00:03:32,160 Speaker 3: is keep demanding that they are accountable. But we're also 71 00:03:32,200 --> 00:03:34,880 Speaker 3: going to understand where the decisions were made and actually 72 00:03:34,920 --> 00:03:37,160 Speaker 3: why they were made. And I don't have a strong 73 00:03:37,240 --> 00:03:39,320 Speaker 3: sense of that because of course we don't have that 74 00:03:39,400 --> 00:03:43,040 Speaker 3: kind of detail clarity here and reporting we just sort of, 75 00:03:43,360 --> 00:03:45,160 Speaker 3: you know, one or two might jump out because the 76 00:03:45,240 --> 00:03:48,360 Speaker 3: journalist does a good job at finding, you know, finding 77 00:03:48,360 --> 00:03:49,080 Speaker 3: where the money went. 78 00:03:49,200 --> 00:03:53,160 Speaker 2: But it does seem more a little but a little 79 00:03:53,200 --> 00:03:55,720 Speaker 2: bit murky given that you know, it is half a 80 00:03:55,720 --> 00:03:56,280 Speaker 2: billion dollars. 81 00:03:56,440 --> 00:03:58,360 Speaker 1: This is try nice to talk to Nick apreciate Neck 82 00:03:58,400 --> 00:04:01,160 Speaker 1: leg At, Chief Executive Infrastructure New Zealand. And of course 83 00:04:01,160 --> 00:04:03,520 Speaker 1: it goes to government credibility. With the last government, you 84 00:04:03,520 --> 00:04:05,760 Speaker 1: weren't expecting much and you just go, well, that was 85 00:04:05,800 --> 00:04:07,400 Speaker 1: the end, wasn't it. But this government it's a whole 86 00:04:07,400 --> 00:04:11,960 Speaker 1: different story. So watch this space for more from the 87 00:04:12,040 --> 00:04:15,040 Speaker 1: Mic Asking Breakfast. Listen live to news Talks it'd be 88 00:04:15,200 --> 00:04:18,920 Speaker 1: from six am weekdays, or follow the podcast on iHeartRadio.