1 00:00:05,480 --> 00:00:05,920 Speaker 1: Kyoda. 2 00:00:06,000 --> 00:00:09,160 Speaker 2: I'm Chelsea Daniels and this is the Front Page, a 3 00:00:09,280 --> 00:00:17,400 Speaker 2: daily podcast presented by the New Zealand Herald. Fixing the leaks, 4 00:00:17,720 --> 00:00:21,480 Speaker 2: not just buying bigger mops. That's the theme of the 5 00:00:21,600 --> 00:00:27,200 Speaker 2: National Infrastructure Plan released today. It looks at seventeen sectors, 6 00:00:27,280 --> 00:00:33,760 Speaker 2: covering central government, local authorities and commercially regulated utilities. The 7 00:00:33,920 --> 00:00:37,640 Speaker 2: thirty year outline sets out how New Zealand can improve 8 00:00:37,680 --> 00:00:42,800 Speaker 2: the way it plans, funds, maintains and delivers infrastructure and 9 00:00:42,840 --> 00:00:45,640 Speaker 2: guess what, it turns out we don't actually do it 10 00:00:45,760 --> 00:00:49,920 Speaker 2: very well. Each year we invest over twenty billion dollars 11 00:00:49,920 --> 00:00:53,159 Speaker 2: on infrastructure, yet on a dollar for dollar basis, we 12 00:00:53,280 --> 00:00:54,600 Speaker 2: achieve less. 13 00:00:54,360 --> 00:00:56,760 Speaker 3: Than many of our international peers. 14 00:00:57,280 --> 00:01:01,120 Speaker 2: Today on the front page, New Zealand Infrastructure Commission Chief 15 00:01:01,160 --> 00:01:09,360 Speaker 2: Executive Jeff Cooper will take us through this mammoth report. So, Jeff, 16 00:01:09,440 --> 00:01:13,639 Speaker 2: what is the biggest headline from this What two hundred 17 00:01:13,640 --> 00:01:16,000 Speaker 2: and twenty five page report? 18 00:01:16,319 --> 00:01:18,920 Speaker 3: What are you telling family members at the dinner table? 19 00:01:19,280 --> 00:01:23,280 Speaker 1: One of the key findings of this plan, the cornerstones 20 00:01:23,760 --> 00:01:27,039 Speaker 1: of the plan is for folks to understand what it 21 00:01:27,120 --> 00:01:30,960 Speaker 1: takes to keep the existing services that we rely on 22 00:01:31,040 --> 00:01:34,200 Speaker 1: from day to day what it takes to make sure 23 00:01:34,240 --> 00:01:40,160 Speaker 1: that that happens, and we will over the next thirty years, 24 00:01:40,280 --> 00:01:43,919 Speaker 1: ending in the order of twenty billion dollars every year, 25 00:01:44,280 --> 00:01:46,760 Speaker 1: just to keep that stuff turning over. That is the 26 00:01:46,800 --> 00:01:52,120 Speaker 1: real megaproject that New Zealand can't avoid in its over 27 00:01:52,160 --> 00:01:56,280 Speaker 1: its next sort of thirty years. And getting that right 28 00:01:56,560 --> 00:02:00,400 Speaker 1: means that when we're thinking about those tech to call 29 00:02:00,480 --> 00:02:06,040 Speaker 1: upgrades that we need to make to various networks, that 30 00:02:06,080 --> 00:02:08,200 Speaker 1: we're able to do that in a way that doesn't 31 00:02:08,280 --> 00:02:12,560 Speaker 1: result in big cost blowouts and assets that we're unable 32 00:02:12,600 --> 00:02:16,360 Speaker 1: to renew and replace in the future. So this is 33 00:02:16,360 --> 00:02:20,840 Speaker 1: a plan which is clear eyed about that, and also 34 00:02:20,960 --> 00:02:27,559 Speaker 1: I think takes these issues of resilience from the storms 35 00:02:28,120 --> 00:02:31,360 Speaker 1: and the natural hazard disasters that are going to become 36 00:02:33,200 --> 00:02:36,960 Speaker 1: more with greater intensity and more severity. We need to 37 00:02:36,960 --> 00:02:41,720 Speaker 1: start planning for that in our capital appropriations now in this. 38 00:02:41,760 --> 00:02:43,960 Speaker 2: Report, I mean, do you think it's an eye opener 39 00:02:44,360 --> 00:02:46,600 Speaker 2: or I mean we know this right. 40 00:02:46,680 --> 00:02:47,680 Speaker 3: We know that we've. 41 00:02:47,600 --> 00:02:52,760 Speaker 2: Underfunded our country's infrastructure over decades. We see that every 42 00:02:52,840 --> 00:02:55,520 Speaker 2: time it rains in some parts of the country, you 43 00:02:55,560 --> 00:02:58,600 Speaker 2: can't go swimming at certain beaches when it's rained a bit. 44 00:02:59,360 --> 00:03:02,160 Speaker 3: And that's just only that's one example. You've got people 45 00:03:02,240 --> 00:03:04,560 Speaker 3: in you know, emergency. 46 00:03:04,080 --> 00:03:07,760 Speaker 2: Rooms citing mold, which you've got all these different things. 47 00:03:09,639 --> 00:03:11,240 Speaker 2: When is it going to be Do you think that 48 00:03:11,320 --> 00:03:14,240 Speaker 2: this is enough to give us a kick up the bart? 49 00:03:14,880 --> 00:03:18,239 Speaker 1: Every event kind of does feel a little bit like that. 50 00:03:18,320 --> 00:03:21,160 Speaker 1: But let me put this to you. New Zealand actually 51 00:03:21,240 --> 00:03:25,000 Speaker 1: spends on a per capita basis among the top ten 52 00:03:25,040 --> 00:03:29,200 Speaker 1: percent of all advanced countries on its infrastructure, So we 53 00:03:29,280 --> 00:03:31,880 Speaker 1: don't I wouldn't characterize this as saying we have a 54 00:03:31,919 --> 00:03:35,440 Speaker 1: funding problem. To struggle is turning that cash into services. 55 00:03:36,400 --> 00:03:40,400 Speaker 1: You know, we're among the bottom ten percent of advanced 56 00:03:40,440 --> 00:03:43,680 Speaker 1: countries for doing that, and so there's you know, I 57 00:03:43,720 --> 00:03:46,240 Speaker 1: think people get frustrated that we don't always have the 58 00:03:46,280 --> 00:03:49,120 Speaker 1: services we want. There's two parts to that, like we 59 00:03:49,200 --> 00:03:51,360 Speaker 1: need to get better at the delivery side so that 60 00:03:51,400 --> 00:03:56,120 Speaker 1: we do turn that cash into services that people people value. 61 00:03:56,360 --> 00:03:58,760 Speaker 1: But the other thing I would sort of say here 62 00:03:58,880 --> 00:04:03,200 Speaker 1: is that, interestingly enough, like when you look at the infrastructure, 63 00:04:03,200 --> 00:04:06,520 Speaker 1: the quantum of infrastructure that we have for the country 64 00:04:06,560 --> 00:04:10,000 Speaker 1: that we have in many places, actually we stack up 65 00:04:10,040 --> 00:04:14,480 Speaker 1: pretty well. And that comes to a surprise to some people. 66 00:04:15,440 --> 00:04:17,920 Speaker 1: But you know, let me give you an example. We're 67 00:04:17,960 --> 00:04:20,160 Speaker 1: a country that are the size where the size of 68 00:04:20,240 --> 00:04:23,800 Speaker 1: Greater Sydney five five and a half million people, but 69 00:04:23,920 --> 00:04:26,559 Speaker 1: we are trying to develop an area that is twenty 70 00:04:26,600 --> 00:04:29,960 Speaker 1: one times larger, and so that is far more challenging 71 00:04:30,000 --> 00:04:33,760 Speaker 1: on a Pacific island, the bottom of the world, with 72 00:04:34,040 --> 00:04:36,799 Speaker 1: very difficult geotechnical issues and so on and so forth. 73 00:04:36,839 --> 00:04:39,400 Speaker 1: So you know, the plan is really trying to make 74 00:04:39,480 --> 00:04:43,159 Speaker 1: clear some of these difficulties and and you know, so 75 00:04:43,240 --> 00:04:45,080 Speaker 1: that people can see that as one of the reasons 76 00:04:45,120 --> 00:04:47,159 Speaker 1: why that's not always is easy. 77 00:04:48,480 --> 00:04:51,160 Speaker 2: Yeah, I'm glad you brought up the what we actually 78 00:04:51,160 --> 00:04:54,279 Speaker 2: put in because it's you know, we invest around five 79 00:04:54,400 --> 00:04:58,800 Speaker 2: point eight percent of GDP annually on infrastructure. That's over 80 00:04:58,800 --> 00:05:01,400 Speaker 2: the past twenty years, making us, like you said, one 81 00:05:01,400 --> 00:05:04,560 Speaker 2: of the top spenders in the OECD, yet we ranked 82 00:05:04,600 --> 00:05:07,640 Speaker 2: towards the bottom right for bang for back. 83 00:05:08,080 --> 00:05:10,839 Speaker 3: Why is that? Where is that money actually going? 84 00:05:11,279 --> 00:05:11,520 Speaker 2: Well? 85 00:05:11,600 --> 00:05:13,480 Speaker 1: To my earlier point, I think when you look at 86 00:05:13,520 --> 00:05:16,600 Speaker 1: New Zealand as a you know, it's land mass, it's 87 00:05:16,600 --> 00:05:21,280 Speaker 1: geography where this long, skinny country we're spread out over 88 00:05:21,320 --> 00:05:23,880 Speaker 1: a lot of land. We're trying to connect very distant 89 00:05:24,040 --> 00:05:28,840 Speaker 1: things over very difficult geography. So one part of this 90 00:05:29,160 --> 00:05:32,320 Speaker 1: is that we have folks that are operating and investing 91 00:05:32,600 --> 00:05:35,760 Speaker 1: our infrastructure and dealing with actually quite difficult conditions. And 92 00:05:35,800 --> 00:05:40,560 Speaker 1: I think the more we understand the difficulty of those conditions, 93 00:05:41,360 --> 00:05:43,960 Speaker 1: the more difficult they seem. So at the moment, a 94 00:05:44,000 --> 00:05:46,600 Speaker 1: lot of work is being done on things like flood mapping, 95 00:05:47,320 --> 00:05:52,480 Speaker 1: seismic risk, wind risk, for instance, and we're getting a 96 00:05:52,520 --> 00:05:57,000 Speaker 1: picture really actually Landslide risk is another one where we're 97 00:05:57,040 --> 00:06:00,320 Speaker 1: learning more about it and we're seeing that the difficulties 98 00:06:00,320 --> 00:06:03,279 Speaker 1: of build and delivery on New Zealand is really difficult. 99 00:06:03,360 --> 00:06:08,080 Speaker 1: So that's one part to this. Other times, I think 100 00:06:08,120 --> 00:06:11,880 Speaker 1: we sort of do this to ourselves. Right, let me 101 00:06:11,920 --> 00:06:14,880 Speaker 1: give you an example. We have somewhere in the order 102 00:06:14,920 --> 00:06:19,159 Speaker 1: of twelve hundred different land use regulation zones in New Zealand. 103 00:06:19,440 --> 00:06:24,080 Speaker 1: Japan has thirteen, right, So we have in many ways 104 00:06:24,160 --> 00:06:27,000 Speaker 1: quite complicated rules that make it difficult for us set 105 00:06:27,000 --> 00:06:30,840 Speaker 1: owners to deliver cost efficiently as well. And I think 106 00:06:30,880 --> 00:06:33,640 Speaker 1: that's why the plan really talks to the need for 107 00:06:34,160 --> 00:06:38,360 Speaker 1: sustained focus on things like resource management reform, making it 108 00:06:38,400 --> 00:06:42,839 Speaker 1: easier to build the services that New Zealanders need and 109 00:06:42,880 --> 00:06:43,719 Speaker 1: want and rely on. 110 00:06:44,240 --> 00:06:45,680 Speaker 3: I saw this in the report. 111 00:06:45,720 --> 00:06:50,200 Speaker 2: There are currently two hundred and seventy five billion dollars 112 00:06:50,200 --> 00:06:53,800 Speaker 2: of projects in planning and delivery across New Zealand. And 113 00:06:53,800 --> 00:06:58,400 Speaker 2: that's just over eleven thousand, nine hundred projects. Now, this 114 00:06:58,600 --> 00:07:01,960 Speaker 2: means absolutely nothing to the average key we and when 115 00:07:01,960 --> 00:07:04,000 Speaker 2: I read this, I was like, that does seem like 116 00:07:04,040 --> 00:07:04,440 Speaker 2: a lot? 117 00:07:04,960 --> 00:07:05,919 Speaker 3: Is that a lot? 118 00:07:06,040 --> 00:07:07,920 Speaker 2: And is that a lot of money in terms of 119 00:07:08,279 --> 00:07:10,920 Speaker 2: or is that just how many projects are happening at 120 00:07:10,920 --> 00:07:11,800 Speaker 2: any given time? 121 00:07:11,960 --> 00:07:13,240 Speaker 3: What's kind of the average? 122 00:07:13,640 --> 00:07:16,640 Speaker 1: Well, it is a lot, but most of those about 123 00:07:16,680 --> 00:07:19,480 Speaker 1: ninety eight percent of those projects are under one hundred million, 124 00:07:19,560 --> 00:07:22,440 Speaker 1: so they're actually small. So the real bread and butter 125 00:07:22,560 --> 00:07:26,880 Speaker 1: of infrastructure is actually really small projects. We have about 126 00:07:26,880 --> 00:07:30,559 Speaker 1: forty four that are over a billion dollars and most 127 00:07:30,600 --> 00:07:34,360 Speaker 1: of those really are not funded, don't currently have a 128 00:07:34,360 --> 00:07:37,560 Speaker 1: path to funding. So you know, when we kind of 129 00:07:37,600 --> 00:07:41,160 Speaker 1: look and feel like are frustrated that these projects are 130 00:07:41,160 --> 00:07:44,200 Speaker 1: not getting across the line, it's actually a very small 131 00:07:44,280 --> 00:07:48,600 Speaker 1: proportion of projects. You sort of asked this question about, well, 132 00:07:48,600 --> 00:07:50,840 Speaker 1: how should we think about two hundred and seventy five 133 00:07:50,840 --> 00:07:53,320 Speaker 1: billion dollars. It sounds like a big number. What does 134 00:07:53,360 --> 00:07:56,520 Speaker 1: that actually mean? And we sort of comment on this 135 00:07:56,680 --> 00:07:58,880 Speaker 1: that it is a big number. It's an enormous number 136 00:07:58,960 --> 00:08:02,720 Speaker 1: for a country of five and a half million. The 137 00:08:02,840 --> 00:08:07,720 Speaker 1: capital appropriation each budget that the central government runs, the 138 00:08:07,800 --> 00:08:12,280 Speaker 1: allowance for that, as signaled previously is three point seven billion, right, 139 00:08:13,160 --> 00:08:15,960 Speaker 1: So that's you know, not central government doesn't do all 140 00:08:16,000 --> 00:08:18,480 Speaker 1: of our infrastructure. They do about sort of forty to 141 00:08:18,480 --> 00:08:23,040 Speaker 1: fifty percent. But it gives you a sense of the 142 00:08:23,400 --> 00:08:27,720 Speaker 1: affordability pressures. And you know when we will often look 143 00:08:27,720 --> 00:08:29,840 Speaker 1: at these projects and say why are they why are 144 00:08:29,880 --> 00:08:32,960 Speaker 1: we continually to push things out further and further and further. 145 00:08:33,679 --> 00:08:36,800 Speaker 1: One of the reasons for that is because you know, 146 00:08:36,840 --> 00:08:39,360 Speaker 1: there are people looking at whether or not we can 147 00:08:39,400 --> 00:08:42,920 Speaker 1: afford the operating and maintenance costs of these of these assets. 148 00:08:43,040 --> 00:08:46,160 Speaker 1: You know, the moment you build a new bridge or 149 00:08:46,240 --> 00:08:49,680 Speaker 1: a new road or whatever it is, it comes with 150 00:08:49,800 --> 00:08:53,520 Speaker 1: a tail of expenditure that needs to be funded either 151 00:08:53,679 --> 00:08:59,280 Speaker 1: through rates, taxes or user charges, and you know, there 152 00:08:59,320 --> 00:09:02,480 Speaker 1: needs to become confidence that households can afford this and 153 00:09:03,040 --> 00:09:06,400 Speaker 1: some of these levels of expenditure that we see in there. 154 00:09:06,600 --> 00:09:10,240 Speaker 1: You know, we look at that and go, actually, households 155 00:09:10,280 --> 00:09:12,520 Speaker 1: are going to struggle to afford some of that, and 156 00:09:12,559 --> 00:09:15,200 Speaker 1: so we need to sort of think about sequencing and 157 00:09:15,240 --> 00:09:18,440 Speaker 1: staging of these projects to keep them affordable for every 158 00:09:18,520 --> 00:09:20,400 Speaker 1: Achiis well, it feels like. 159 00:09:20,440 --> 00:09:23,079 Speaker 2: That should be something that should be thought about before 160 00:09:23,120 --> 00:09:24,439 Speaker 2: it's announced to the public. 161 00:09:24,559 --> 00:09:25,160 Speaker 3: Is that right? 162 00:09:25,440 --> 00:09:28,120 Speaker 1: Well, I mean I think that this is an essence that, 163 00:09:28,240 --> 00:09:29,960 Speaker 1: you know, one of the first things that you should 164 00:09:30,000 --> 00:09:31,920 Speaker 1: be thinking about in the business cases, whether it's a 165 00:09:31,960 --> 00:09:34,679 Speaker 1: reason why there's a financial case to a business case. 166 00:09:35,200 --> 00:09:37,520 Speaker 1: And to your point, yeah, I think that, you know, 167 00:09:38,200 --> 00:09:42,600 Speaker 1: I think the from over in Australia, you know the 168 00:09:43,360 --> 00:09:45,560 Speaker 1: what was it, the sort of third of projects that 169 00:09:45,600 --> 00:09:49,200 Speaker 1: were announced before their business cases accountant for sort of 170 00:09:49,240 --> 00:09:53,120 Speaker 1: two thirds of all of the cost overruns, right, So yeah, like, 171 00:09:53,200 --> 00:09:57,080 Speaker 1: if you want to look at good ROI doing good 172 00:09:57,200 --> 00:10:00,360 Speaker 1: due diligence in the business case phase, there's probab no 173 00:10:00,440 --> 00:10:04,440 Speaker 1: better bang for back, but asking the question of what 174 00:10:04,480 --> 00:10:09,640 Speaker 1: does this mean for the household should be central. And 175 00:10:09,679 --> 00:10:12,280 Speaker 1: I know that you know this recently came up for 176 00:10:12,400 --> 00:10:16,320 Speaker 1: Aucklanders on the City rail link. You know that that's 177 00:10:16,360 --> 00:10:20,680 Speaker 1: going to require operational and maintenance and depreciation funding which 178 00:10:20,760 --> 00:10:22,880 Speaker 1: needs to has been funded out of higher rates. So 179 00:10:22,960 --> 00:10:26,240 Speaker 1: this is these are not hypotheticals. This is visceral. This 180 00:10:26,240 --> 00:10:28,520 Speaker 1: this will hit the balance sheet and we need to 181 00:10:28,520 --> 00:10:31,280 Speaker 1: think very carefully about those those sorts of things. 182 00:10:37,800 --> 00:10:39,680 Speaker 4: Most it's actually really important you've got a government that 183 00:10:39,720 --> 00:10:42,600 Speaker 4: actually responds very well in those moments to actually meet 184 00:10:42,640 --> 00:10:45,400 Speaker 4: those people with their needs that are very immediate. And 185 00:10:45,440 --> 00:10:47,319 Speaker 4: then actually we have a very good recovery and as 186 00:10:47,360 --> 00:10:49,280 Speaker 4: you can see, we're building back a much more resilient 187 00:10:49,280 --> 00:10:52,640 Speaker 4: infrastructure network well as as we've talked before in recent weeks. 188 00:10:52,640 --> 00:10:54,360 Speaker 4: You know, just look at what we're doing and rebuilding 189 00:10:54,360 --> 00:10:56,720 Speaker 4: the Hawks Bay Expressway. It's building back to be twice 190 00:10:56,720 --> 00:11:00,200 Speaker 4: a strong prospective flood to resilience. We're building back road 191 00:11:00,280 --> 00:11:03,280 Speaker 4: networks across the country. You think about State Highway twenty five. 192 00:11:03,360 --> 00:11:05,839 Speaker 4: The building resilience into everything this government does. We've put 193 00:11:05,840 --> 00:11:08,520 Speaker 4: a lot of money into over successive budgets. That's how 194 00:11:08,520 --> 00:11:10,880 Speaker 4: we roll. 195 00:11:10,960 --> 00:11:13,480 Speaker 3: Now you mentioned this before, but i'll mention it again. 196 00:11:13,760 --> 00:11:17,120 Speaker 2: Over two thirds of the total value of the projects, 197 00:11:17,559 --> 00:11:20,760 Speaker 2: those eleven thousand, odd, one hundred and ninety three billion 198 00:11:20,800 --> 00:11:23,720 Speaker 2: out of two hundred and seventy five billion, do not 199 00:11:23,920 --> 00:11:29,080 Speaker 2: yet have full funding commitments. Are we going to realistically 200 00:11:29,200 --> 00:11:31,800 Speaker 2: have to scale back on those promises and make some 201 00:11:31,960 --> 00:11:34,880 Speaker 2: really hard and fasting like a real priorities list as 202 00:11:34,920 --> 00:11:37,840 Speaker 2: to what we do, you know, say something like sorry, 203 00:11:37,840 --> 00:11:40,959 Speaker 2: the oldmate promised you this, but we're going to have 204 00:11:41,000 --> 00:11:41,360 Speaker 2: to cut it. 205 00:11:41,400 --> 00:11:42,520 Speaker 3: We can't actually afford it. 206 00:11:43,440 --> 00:11:45,920 Speaker 1: The plan really speaks to how can we fit this 207 00:11:46,040 --> 00:11:49,480 Speaker 1: all in to a capital budget that we can afford 208 00:11:49,600 --> 00:11:51,840 Speaker 1: since we're so you know, we're so far away from that. 209 00:11:53,320 --> 00:11:55,920 Speaker 1: And the answer to that is that we're probably going 210 00:11:55,960 --> 00:11:58,120 Speaker 1: to need all of these projects over over a long 211 00:11:58,160 --> 00:12:03,720 Speaker 1: period of time. But the question is really around sequencing, staging, 212 00:12:03,760 --> 00:12:07,720 Speaker 1: and phasing of these projects. And you know, yeah, like 213 00:12:07,800 --> 00:12:10,920 Speaker 1: we should be thinking about doing low cost interventions first. 214 00:12:11,720 --> 00:12:15,640 Speaker 1: Maybe we can get the safety improvements from significant investments 215 00:12:15,679 --> 00:12:18,680 Speaker 1: in whatever the road is by doing some other lower 216 00:12:18,760 --> 00:12:22,160 Speaker 1: cost things that allow us to you know, to keep 217 00:12:22,240 --> 00:12:25,199 Speaker 1: up on our hospital rebuilts, which frankly we're a long 218 00:12:25,240 --> 00:12:30,680 Speaker 1: way behind not so yeah, those are those are the realities. 219 00:12:30,679 --> 00:12:33,840 Speaker 1: But look, I would say that, you know, in truth, 220 00:12:34,559 --> 00:12:37,400 Speaker 1: truth be told, we sort of already know that, right, 221 00:12:37,480 --> 00:12:40,240 Speaker 1: Like I think New Zealanders know this where we're looking 222 00:12:40,280 --> 00:12:46,520 Speaker 1: at an enormous pipeline of projects, and on the other hand, 223 00:12:46,679 --> 00:12:50,360 Speaker 1: we're having conversations every day about cost of living. Productivity 224 00:12:50,440 --> 00:12:53,319 Speaker 1: levels are not going up, we are having to rebuild 225 00:12:53,400 --> 00:12:56,800 Speaker 1: assets because of natural disasters, and you know, you just 226 00:12:56,840 --> 00:13:00,360 Speaker 1: look at the Hawk's Bay, the MNA, We're two and 227 00:13:00,400 --> 00:13:03,560 Speaker 1: so on. These are real costs that are hitting us 228 00:13:03,679 --> 00:13:08,280 Speaker 1: right now. And so we say, you know, I don't 229 00:13:08,280 --> 00:13:12,640 Speaker 1: think this should come as a surprise, but you know, 230 00:13:12,760 --> 00:13:15,439 Speaker 1: for ASIAT owners and for investors around the country, what 231 00:13:15,480 --> 00:13:19,200 Speaker 1: we're sort of saying in the plan is let's optimize 232 00:13:19,240 --> 00:13:23,240 Speaker 1: around what we can afford rather than continually planning for 233 00:13:23,320 --> 00:13:27,840 Speaker 1: things we can't afford. And you know, getting frustrated at that. 234 00:13:28,200 --> 00:13:30,800 Speaker 2: Yeah, So basically, all of these projects, like you said, 235 00:13:30,840 --> 00:13:34,280 Speaker 2: are needed, but there aren't really any massive kind of 236 00:13:34,400 --> 00:13:38,040 Speaker 2: vanity projects that we can chop or something, you know, 237 00:13:38,280 --> 00:13:41,720 Speaker 2: like we've just gone ahead and we've thought ahead too much. 238 00:13:41,800 --> 00:13:45,200 Speaker 5: Maybe I think they're all legitimate needs out and one 239 00:13:45,240 --> 00:13:47,680 Speaker 5: of the key questions that we need to ask though, 240 00:13:47,880 --> 00:13:51,640 Speaker 5: is are there enough people to justify the enormous capital 241 00:13:51,800 --> 00:13:53,959 Speaker 5: upgrade in many places? 242 00:13:53,960 --> 00:13:56,480 Speaker 1: And so you know, there might be certainly some people 243 00:13:56,520 --> 00:13:59,559 Speaker 1: that need the project right now, but for ASIAT owners, 244 00:13:59,559 --> 00:14:02,760 Speaker 1: they're thinking about, well, what is the right number such 245 00:14:02,800 --> 00:14:05,440 Speaker 1: that we have enough people using it so that we 246 00:14:05,480 --> 00:14:09,600 Speaker 1: can maintain, renew and replace this asset in a financially 247 00:14:09,640 --> 00:14:12,440 Speaker 1: sustainable way into the future, so that our cities and 248 00:14:12,480 --> 00:14:16,600 Speaker 1: regions are financially strong rather than in the position we're 249 00:14:16,640 --> 00:14:19,880 Speaker 1: currently in, which is, you know, financially very weak and 250 00:14:20,360 --> 00:14:21,480 Speaker 1: laden with a lot of debt. 251 00:14:22,000 --> 00:14:25,600 Speaker 2: So that's only about thirty percent of the total value 252 00:14:25,640 --> 00:14:28,960 Speaker 2: of the pipeline relates to maintenance and renewals. 253 00:14:29,320 --> 00:14:32,000 Speaker 3: How much should it actually be do you think. 254 00:14:31,880 --> 00:14:35,480 Speaker 1: Well, when we're looking at all of the assets we own, 255 00:14:35,760 --> 00:14:39,480 Speaker 1: and so anytime you buy a new asset, you go 256 00:14:39,520 --> 00:14:44,440 Speaker 1: away and buy a car. Every year there's wear and 257 00:14:44,480 --> 00:14:47,040 Speaker 1: tear on that car, and it creates a sort of 258 00:14:47,080 --> 00:14:50,120 Speaker 1: idea of like what a useful, useful life of an 259 00:14:50,160 --> 00:14:53,600 Speaker 1: asset might be, but orders of magnitude. If you've got 260 00:14:53,840 --> 00:14:56,920 Speaker 1: sort of annual depreciation rates of two to three percent, 261 00:14:57,040 --> 00:15:00,720 Speaker 1: it means that you're replacing your assets every thirty, forty 262 00:15:00,760 --> 00:15:05,360 Speaker 1: fifty years. It's a slightly slippery idea, but the sort 263 00:15:05,360 --> 00:15:07,000 Speaker 1: of general nature of it is you know, I think 264 00:15:07,040 --> 00:15:08,880 Speaker 1: this makes a lot of sense if you're trying to 265 00:15:08,880 --> 00:15:12,520 Speaker 1: maintain a house or a car or anything. And so 266 00:15:12,600 --> 00:15:14,800 Speaker 1: when you do the math on this, for all of 267 00:15:14,840 --> 00:15:17,600 Speaker 1: the assets that we own and the way that we 268 00:15:17,720 --> 00:15:21,440 Speaker 1: see those assets wearing and tearing out over time, we 269 00:15:21,520 --> 00:15:23,800 Speaker 1: would expect that number to be in the order of 270 00:15:23,840 --> 00:15:24,640 Speaker 1: sixty percent. 271 00:15:25,120 --> 00:15:25,360 Speaker 5: Right. 272 00:15:25,840 --> 00:15:28,760 Speaker 1: For some assets, it's going to be and in some 273 00:15:28,800 --> 00:15:32,000 Speaker 1: places it's going to be higher. You can imagine places 274 00:15:32,040 --> 00:15:37,680 Speaker 1: that say, don't have significant population growth, those ones might 275 00:15:37,680 --> 00:15:41,000 Speaker 1: actually have a higher number on the totality for replacement. 276 00:15:41,520 --> 00:15:44,080 Speaker 1: And for places that are experiencing a lot of growth 277 00:15:44,120 --> 00:15:46,640 Speaker 1: so they're building out their networks for new people that 278 00:15:46,640 --> 00:15:49,000 Speaker 1: are coming into the city, you might expect that number 279 00:15:49,000 --> 00:15:51,080 Speaker 1: to be a bit lower. But on the whole, that's 280 00:15:51,080 --> 00:15:52,880 Speaker 1: what you would expect to see it to be across 281 00:15:52,880 --> 00:15:57,800 Speaker 1: the portfolio. We know we know that is not the case. 282 00:15:58,640 --> 00:16:01,120 Speaker 1: And the thing about that is that if we're not 283 00:16:01,320 --> 00:16:06,600 Speaker 1: renewing and maintaining and renewing our assets in an optimized way, 284 00:16:07,400 --> 00:16:11,840 Speaker 1: what we're actually doing is lowering service levels and kicking 285 00:16:11,960 --> 00:16:16,640 Speaker 1: costs to future generations. And the sticking point is this, Right, 286 00:16:17,640 --> 00:16:19,920 Speaker 1: if you don't keep on top of these things, the 287 00:16:20,080 --> 00:16:22,920 Speaker 1: cost to get on top of them in the future 288 00:16:23,040 --> 00:16:23,920 Speaker 1: is going to be higher. 289 00:16:24,280 --> 00:16:24,480 Speaker 5: Right. 290 00:16:24,800 --> 00:16:27,640 Speaker 1: If you don't sort of paint the weather boards on 291 00:16:27,680 --> 00:16:30,840 Speaker 1: your house repeatedly, eventually you're going to have to replace them, 292 00:16:30,840 --> 00:16:33,560 Speaker 1: and the difference between painting a weather board and replacing 293 00:16:33,600 --> 00:16:35,200 Speaker 1: one is significant. 294 00:16:35,320 --> 00:16:35,520 Speaker 5: Right. 295 00:16:36,120 --> 00:16:40,080 Speaker 1: So if we kick the can down the road on 296 00:16:40,200 --> 00:16:44,280 Speaker 1: this mundane maintenance thing, which doesn't hit the headlines very often, 297 00:16:44,840 --> 00:16:48,840 Speaker 1: what it's ultimately going to mean is less infrastructure services 298 00:16:48,920 --> 00:16:51,280 Speaker 1: over the long term, and that's going to you know, 299 00:16:51,320 --> 00:16:53,960 Speaker 1: that's going to be hurtful to our economy, but also 300 00:16:54,000 --> 00:16:56,760 Speaker 1: all of the social infrastructure that we need as well. 301 00:17:03,000 --> 00:17:05,600 Speaker 6: Can't build everything all at once, but we need to 302 00:17:05,600 --> 00:17:07,240 Speaker 6: get the balance right, so we do need to be 303 00:17:07,320 --> 00:17:10,240 Speaker 6: investing and the stuff that's boring that people can't see. 304 00:17:10,480 --> 00:17:13,439 Speaker 6: One of the reasons as a country we've underinvested in 305 00:17:13,520 --> 00:17:16,720 Speaker 6: water infrastructure is pipes below the ground are not front 306 00:17:16,720 --> 00:17:19,720 Speaker 6: of mind for most people until they stop working, and 307 00:17:19,760 --> 00:17:22,679 Speaker 6: then suddenly everyone's like, why hasn't this pipe been maintained? 308 00:17:23,240 --> 00:17:26,159 Speaker 6: But maintenance also draws a lot of complaints. So if 309 00:17:26,200 --> 00:17:28,080 Speaker 6: you're sitting around a council table, you know that when 310 00:17:28,119 --> 00:17:30,199 Speaker 6: you rip up pipes. People complain about that because it 311 00:17:30,240 --> 00:17:33,000 Speaker 6: causes a lot of disruption, and so we've got to 312 00:17:33,200 --> 00:17:35,439 Speaker 6: tackle some of the boring stuff that can actually be 313 00:17:35,440 --> 00:17:39,000 Speaker 6: a bit annoying. Maintaining pipes is very annoying for people. 314 00:17:39,680 --> 00:17:40,960 Speaker 6: But it has to happen. 315 00:17:43,600 --> 00:17:44,040 Speaker 1: Is it all? 316 00:17:44,119 --> 00:17:47,959 Speaker 2: Because you know, governments of any day, any color, any stripes, 317 00:17:48,119 --> 00:17:51,640 Speaker 2: they just love unveiling a huge project. You know, it's 318 00:17:51,720 --> 00:17:57,159 Speaker 2: that cutting ribbon moment. It's promising these big promises and 319 00:17:57,280 --> 00:17:59,680 Speaker 2: these kind of announcements that are you know, much more 320 00:17:59,720 --> 00:18:02,040 Speaker 2: sex see them talking about how we're going to handle 321 00:18:02,080 --> 00:18:03,639 Speaker 2: your excrement or something. 322 00:18:03,720 --> 00:18:06,719 Speaker 1: Hey, no, there's no doubt that's true. Right But the 323 00:18:06,720 --> 00:18:10,040 Speaker 1: moment that we take our services taken away from you, 324 00:18:10,480 --> 00:18:13,800 Speaker 1: you start to really understand the value of the existing 325 00:18:13,880 --> 00:18:16,560 Speaker 1: asset base. And I think there's, you know, arguably no 326 00:18:16,720 --> 00:18:20,680 Speaker 1: greater example of this right now than the wastewater treatment 327 00:18:21,320 --> 00:18:24,800 Speaker 1: issues that we're experiencing in Wellington right now. Right that 328 00:18:24,960 --> 00:18:27,280 Speaker 1: was an asset that you know a lot of people 329 00:18:27,320 --> 00:18:30,040 Speaker 1: probably wasn't front of their mind, hadn't even thought about it, 330 00:18:30,119 --> 00:18:32,840 Speaker 1: like what is this wastewater treatment plant? And these are 331 00:18:32,920 --> 00:18:36,840 Speaker 1: services that we came to rely on and they were 332 00:18:36,840 --> 00:18:40,800 Speaker 1: taken away, and you know that's that's hit heart. So, 333 00:18:42,040 --> 00:18:44,440 Speaker 1: you know, these issues of making sure that our assets 334 00:18:44,480 --> 00:18:47,119 Speaker 1: continue to function. Let me say that some of our 335 00:18:47,240 --> 00:18:52,240 Speaker 1: most important infrastructure is the stuff that's already around us. 336 00:18:51,880 --> 00:18:55,480 Speaker 1: It carries the highest cost benefit ratio. It creates the 337 00:18:55,560 --> 00:18:59,359 Speaker 1: most value. That's why it's there and why it was 338 00:18:59,840 --> 00:19:03,720 Speaker 1: an invested in. So anytime we make an investment, you know, 339 00:19:03,720 --> 00:19:05,719 Speaker 1: it's an obligation to keep that up. And I think 340 00:19:05,800 --> 00:19:10,320 Speaker 1: the plan argues that we need legislative tools to make 341 00:19:10,400 --> 00:19:12,000 Speaker 1: sure that this is occurring. 342 00:19:12,240 --> 00:19:15,120 Speaker 2: And so how can we make sure that this is occurring? 343 00:19:15,560 --> 00:19:18,720 Speaker 2: I suppose it would be pretty important to get cross 344 00:19:18,760 --> 00:19:19,760 Speaker 2: parties support on this. 345 00:19:20,200 --> 00:19:22,639 Speaker 1: I think that's right, and I for you know, I 346 00:19:22,640 --> 00:19:24,640 Speaker 1: would sort of make the case that for many kinds 347 00:19:24,680 --> 00:19:29,439 Speaker 1: of infrastructure, commercial infrastructure, this happens as a matter of 348 00:19:29,520 --> 00:19:33,080 Speaker 1: course really because if they don't maintain their assets, and 349 00:19:33,080 --> 00:19:38,280 Speaker 1: I'm thinking about transmission lines, distribution lines, airports, if they 350 00:19:38,320 --> 00:19:41,560 Speaker 1: don't maintain their assets, they will see their revenues to climb. 351 00:19:41,640 --> 00:19:44,639 Speaker 1: So when your revenue comes from the asset, you have 352 00:19:44,680 --> 00:19:47,560 Speaker 1: a very powerful incentive to make sure the assets well 353 00:19:47,640 --> 00:19:49,320 Speaker 1: maintained and functioning right. 354 00:19:49,480 --> 00:19:53,600 Speaker 2: Well, people living their lives aren't enough of an incentive. 355 00:19:53,800 --> 00:19:57,400 Speaker 1: While it's not so in your face, I think right, 356 00:19:57,480 --> 00:20:01,080 Speaker 1: because if you're seeing your service level decline for your 357 00:20:01,119 --> 00:20:06,879 Speaker 1: asset and it's hitting your revenue line, you know the 358 00:20:06,920 --> 00:20:11,679 Speaker 1: next day, it's very visceral. Right, So the focus on 359 00:20:11,760 --> 00:20:15,320 Speaker 1: that is just as an observation, I would find that 360 00:20:15,359 --> 00:20:17,800 Speaker 1: when that is the case, the focus on that is 361 00:20:18,200 --> 00:20:23,320 Speaker 1: a lot sharper. In local government, we see that they're 362 00:20:23,400 --> 00:20:26,600 Speaker 1: kind of in the ballpark. They're not that their renewal 363 00:20:26,680 --> 00:20:28,600 Speaker 1: rates are lower than what you would hope them to 364 00:20:28,640 --> 00:20:31,440 Speaker 1: be sort of I would say seventy to eighty eighty 365 00:20:31,480 --> 00:20:34,800 Speaker 1: five percent, but have been below one hundred percent for 366 00:20:34,880 --> 00:20:39,320 Speaker 1: quite some time. In central government, which is about forty 367 00:20:39,400 --> 00:20:42,600 Speaker 1: percent there or thereabouts of infrastructure that we rely on, 368 00:20:44,080 --> 00:20:48,040 Speaker 1: we don't always know the condition of it. There's not requirements, 369 00:20:49,440 --> 00:20:51,959 Speaker 1: you know, it's not standardized, and so we don't always 370 00:20:51,960 --> 00:20:54,480 Speaker 1: have a great picture at all. So the plan is 371 00:20:54,520 --> 00:20:58,320 Speaker 1: really calling this out and is trying to provide some 372 00:20:58,480 --> 00:21:03,959 Speaker 1: options and recommendations to really tighten tighten things up in 373 00:21:04,000 --> 00:21:04,720 Speaker 1: that area. 374 00:21:04,760 --> 00:21:09,040 Speaker 2: And just lastly, page thirty one of the two hundred 375 00:21:09,040 --> 00:21:11,119 Speaker 2: and twenty five pages. I'm going to keep bringing that 376 00:21:11,240 --> 00:21:15,640 Speaker 2: up because I've had to read through them and everyone 377 00:21:15,720 --> 00:21:18,800 Speaker 2: has to know. But I saw that there's this poll, right, 378 00:21:18,920 --> 00:21:24,240 Speaker 2: So should we increase spending to improve infrastructure in New Zealand, 379 00:21:24,600 --> 00:21:27,160 Speaker 2: even if that means higher taxes. 380 00:21:26,800 --> 00:21:28,800 Speaker 3: Or costs for consumers? That was a question. 381 00:21:29,280 --> 00:21:32,760 Speaker 2: Twenty eight percent strongly disagree, tend to disagree, thirty two 382 00:21:33,359 --> 00:21:37,280 Speaker 2: neither here nor there, forty percent strongly agree and tend 383 00:21:37,359 --> 00:21:40,399 Speaker 2: to agree. Now, that is actually a lot more people 384 00:21:40,440 --> 00:21:44,520 Speaker 2: who either don't mind or strongly agree with that statement 385 00:21:45,440 --> 00:21:46,840 Speaker 2: than I perhaps would have thought. 386 00:21:47,320 --> 00:21:50,280 Speaker 1: I think New Zealanders see the value of infrastructure, and 387 00:21:50,400 --> 00:21:52,879 Speaker 1: we make this point right at the outset. New Zealand 388 00:21:53,520 --> 00:21:56,200 Speaker 1: is among the highest spenders on infrastructure, and so we're 389 00:21:56,240 --> 00:21:59,280 Speaker 1: prepared to put money into it. There's no question about that, 390 00:21:59,359 --> 00:22:02,000 Speaker 1: I think. But I would make this comment. I think 391 00:22:02,040 --> 00:22:06,080 Speaker 1: New Zealanders want to see the value as well, and 392 00:22:06,720 --> 00:22:09,840 Speaker 1: so that is the sort of proposition to investors and 393 00:22:09,880 --> 00:22:13,000 Speaker 1: asset owners is show me the high quality projects that 394 00:22:13,080 --> 00:22:16,560 Speaker 1: are able to be done in a cost efficient way, right, 395 00:22:16,600 --> 00:22:19,880 Speaker 1: because the blowouts, at the end of the day, they 396 00:22:19,960 --> 00:22:23,320 Speaker 1: do have big implications. Right, if we're building hospitals at 397 00:22:23,320 --> 00:22:26,160 Speaker 1: two to three billion dollars, we're going to really struggle 398 00:22:26,160 --> 00:22:28,800 Speaker 1: to get the hospital infrastructure we need for an aging population. 399 00:22:28,960 --> 00:22:33,280 Speaker 1: So I think that's that's a it's an open door 400 00:22:33,560 --> 00:22:35,560 Speaker 1: to ask owners, but we need to do the basics 401 00:22:35,600 --> 00:22:38,199 Speaker 1: well and we need to have the good disciplines to 402 00:22:38,200 --> 00:22:39,679 Speaker 1: show that there's value in it. 403 00:22:39,960 --> 00:22:41,920 Speaker 3: Thanks for joining us, Jeff, all. 404 00:22:41,880 --> 00:22:44,560 Speaker 1: Right, Thanks Chelsea. 405 00:22:45,480 --> 00:22:48,600 Speaker 2: That's it for this episode of the Front Page. You 406 00:22:48,640 --> 00:22:52,880 Speaker 2: can read more about today's stories and extensive news coverage. 407 00:22:52,440 --> 00:22:54,560 Speaker 3: At enzidhrald dot co dot nz. 408 00:22:55,240 --> 00:22:58,800 Speaker 2: The Front Page is hosted and produced by me Chelsea Daniels, 409 00:22:59,119 --> 00:23:04,000 Speaker 2: Caine Dicky, our studio operator Richard Martin, our producer and editor, 410 00:23:04,200 --> 00:23:06,080 Speaker 2: and our executive producer. 411 00:23:05,760 --> 00:23:06,520 Speaker 3: Is Jane Ye. 412 00:23:07,240 --> 00:23:10,159 Speaker 2: Follow the Front Page on the iHeart app or wherever 413 00:23:10,200 --> 00:23:13,320 Speaker 2: you get your podcasts, and join us next time for 414 00:23:13,359 --> 00:23:15,680 Speaker 2: another look beyond the headlines.