1 00:00:00,400 --> 00:00:02,160 Speaker 1: Like everything else turns out, and new numbers show the 2 00:00:02,160 --> 00:00:04,160 Speaker 1: cost of repairing our roads is rising. In the past 3 00:00:04,200 --> 00:00:06,640 Speaker 1: six years, one specific surface has gone up two hundred 4 00:00:06,640 --> 00:00:10,680 Speaker 1: thousand dollars gone up two hundred thousand up. So for 5 00:00:10,720 --> 00:00:12,800 Speaker 1: the same kilometers stretcher broade did cost f one hundred 6 00:00:12,800 --> 00:00:14,680 Speaker 1: and twenty four thousand, now it costs six hundred and twelve. 7 00:00:14,960 --> 00:00:17,680 Speaker 1: These were rents a TA figures Infometric's principle economist Brad 8 00:00:17,680 --> 00:00:19,320 Speaker 1: Olson was in bold in this working as well as 9 00:00:19,320 --> 00:00:20,119 Speaker 1: bred morning. 10 00:00:19,840 --> 00:00:21,480 Speaker 2: To you, good morning. 11 00:00:21,520 --> 00:00:24,720 Speaker 1: How much of its pure inflation versus you know, just 12 00:00:24,960 --> 00:00:26,280 Speaker 1: put the price up because we can. 13 00:00:27,560 --> 00:00:29,080 Speaker 2: I think there's a few things going on. I mean, 14 00:00:29,080 --> 00:00:31,560 Speaker 2: you're right, there is some pure inflation going on there. 15 00:00:31,960 --> 00:00:34,720 Speaker 2: You look at you know, bitchmand price's price of labor, 16 00:00:34,760 --> 00:00:36,760 Speaker 2: you know, getting people to do all this work, cones 17 00:00:37,360 --> 00:00:39,599 Speaker 2: and everything else. My can have increased. But I think 18 00:00:39,640 --> 00:00:42,080 Speaker 2: as well, you look at that figure you just closed 19 00:00:42,159 --> 00:00:45,080 Speaker 2: for the sealed road pavement rehabilitation, which is a bit 20 00:00:45,080 --> 00:00:47,559 Speaker 2: of a mouthful. I think what that also highlights is 21 00:00:47,560 --> 00:00:50,080 Speaker 2: that that is almost like a full reconstruction, because for 22 00:00:50,200 --> 00:00:52,760 Speaker 2: resealing it's gone up that sort of not by as 23 00:00:52,840 --> 00:00:55,600 Speaker 2: much it's sort of relatively stable in the numbers, but 24 00:00:55,840 --> 00:00:59,240 Speaker 2: that rehabilitation that's basically where you're almost having to redo 25 00:00:59,280 --> 00:01:01,560 Speaker 2: the roadboo gotten to such a station. I think that 26 00:01:01,640 --> 00:01:04,400 Speaker 2: highlights that over time there hasn't sort of been enough 27 00:01:04,400 --> 00:01:06,640 Speaker 2: money in the transport budget that hasn't gone into the 28 00:01:06,720 --> 00:01:09,760 Speaker 2: right areas. Roads have degraded, and therefore when you have 29 00:01:09,840 --> 00:01:11,440 Speaker 2: to go and redo them, that's sort of in a 30 00:01:11,440 --> 00:01:14,760 Speaker 2: worse state, so you have to almost restart from scratch. Plus, 31 00:01:14,800 --> 00:01:17,240 Speaker 2: of course we've had much much worse whether the last 32 00:01:17,280 --> 00:01:18,959 Speaker 2: couple of years that have sort of wrecked the roading 33 00:01:19,000 --> 00:01:21,240 Speaker 2: network even more so. I think all of this is 34 00:01:21,280 --> 00:01:24,200 Speaker 2: reflective of the fact that you know, not only is 35 00:01:24,800 --> 00:01:28,720 Speaker 2: building construction infrastructure work a whole lot more expensive, there's 36 00:01:28,800 --> 00:01:31,160 Speaker 2: more of it to do, and often we're starting for 37 00:01:31,280 --> 00:01:33,600 Speaker 2: a worse state, which often increases the cost. So there's 38 00:01:33,640 --> 00:01:36,680 Speaker 2: sort of a doubling, trippling up effect that's coming through 39 00:01:36,720 --> 00:01:38,600 Speaker 2: here that's making everything more expensively. 40 00:01:38,800 --> 00:01:41,679 Speaker 1: Is there a transport funding problem with politics? Is there 41 00:01:41,680 --> 00:01:43,840 Speaker 1: too much mucking around and that is that part of 42 00:01:43,880 --> 00:01:44,680 Speaker 1: the equation or not? 43 00:01:46,040 --> 00:01:48,680 Speaker 2: Oh, I definitely don't think it helps. I mean, there's 44 00:01:48,720 --> 00:01:50,680 Speaker 2: two things that I think frustrate a lot of people. 45 00:01:51,000 --> 00:01:52,960 Speaker 2: One is that, you know, every three years we go 46 00:01:53,040 --> 00:01:56,600 Speaker 2: through the planning cycle from ZPA and they sort of 47 00:01:56,600 --> 00:01:58,640 Speaker 2: put together watch money they think needs to go on 48 00:01:58,680 --> 00:02:01,000 Speaker 2: to certain areas, and often you do have some pretty 49 00:02:01,000 --> 00:02:03,160 Speaker 2: big chopping and changing. I mean, I've looked at the 50 00:02:03,240 --> 00:02:06,360 Speaker 2: National and Transport Fund for the last sort of decade 51 00:02:06,440 --> 00:02:09,120 Speaker 2: or so, and you know there's every time we have 52 00:02:09,200 --> 00:02:11,639 Speaker 2: to sort of swap out one activity class swap and 53 00:02:11,680 --> 00:02:13,680 Speaker 2: another one figure out how they sort of match up 54 00:02:13,680 --> 00:02:16,840 Speaker 2: over time. So all of that does add costs and complication. 55 00:02:17,200 --> 00:02:19,640 Speaker 2: The greater worry, I think is that you for the 56 00:02:19,680 --> 00:02:23,120 Speaker 2: bigger projects, when politicians come in and you know, they 57 00:02:23,160 --> 00:02:25,680 Speaker 2: decide they want to take a different track, they often 58 00:02:25,720 --> 00:02:28,480 Speaker 2: will you know, pause on a whole bunch of work 59 00:02:28,560 --> 00:02:31,160 Speaker 2: while they get their other projects ready to go now. 60 00:02:31,160 --> 00:02:34,280 Speaker 2: Because those new projects aren't ready immediately. It takes you know, 61 00:02:34,280 --> 00:02:36,720 Speaker 2: a year to buy the land plan it all out, 62 00:02:36,760 --> 00:02:39,200 Speaker 2: design its scope at speck at all that before you 63 00:02:39,280 --> 00:02:41,320 Speaker 2: get shovels in the ground. It means that you often 64 00:02:41,360 --> 00:02:44,480 Speaker 2: have this sort of big hole in infrastructure activity at 65 00:02:44,480 --> 00:02:46,880 Speaker 2: the start of every government term. And it happens every 66 00:02:46,880 --> 00:02:49,160 Speaker 2: time there's a change of government. But I think more 67 00:02:49,160 --> 00:02:51,639 Speaker 2: broadly that the challenge here Wright is that we've got 68 00:02:51,680 --> 00:02:54,160 Speaker 2: a lot of infrastructure that we need to continue to 69 00:02:54,200 --> 00:02:57,320 Speaker 2: progress with some of the cost increases that have come through. 70 00:02:57,400 --> 00:03:00,839 Speaker 2: Even if Wetahi's saying, look, we've been providing a huge 71 00:03:00,880 --> 00:03:02,960 Speaker 2: bunch more money into the transport list, so that might 72 00:03:03,000 --> 00:03:05,800 Speaker 2: be true, you're getting listening for bucks, you're actually probably 73 00:03:05,800 --> 00:03:08,720 Speaker 2: doing less actual volume work and paying more for it. 74 00:03:08,800 --> 00:03:11,519 Speaker 2: That's the challenge that we continue to get bitten on 75 00:03:11,919 --> 00:03:14,359 Speaker 2: price and cost escalation, which means we've got to be 76 00:03:14,400 --> 00:03:17,320 Speaker 2: a lot smarter with how much infrastructure we're doing what's 77 00:03:17,400 --> 00:03:19,840 Speaker 2: the most urgent and right work, because otherwise we're going 78 00:03:19,880 --> 00:03:21,600 Speaker 2: to continue to see those numbers go up. 79 00:03:21,680 --> 00:03:24,239 Speaker 1: Stop it, Brad, you're making too much sense. Bred Olsen 80 00:03:24,280 --> 00:03:27,600 Speaker 1: Infometrics principal economists with us this morning. For more from 81 00:03:27,639 --> 00:03:30,720 Speaker 1: the Mic Asking Breakfast, listen live to news talks that'd 82 00:03:30,760 --> 00:03:34,639 Speaker 1: be from six am weekdays, or follow the podcast on iHeartRadio.