Speaker 1: Hello and Welton to on the tiles the New Zealand
Speaker 1: Heralds Politics podcast. I'm your host, the Deputy Political editor
Speaker 1: of The New Zealand Herold Thomas Codlin. Today we've got
Speaker 1: Ollie Lewis from Business Test, the infrastructure of Business Test
Speaker 1: on the show to talk about the Building Nations Infrastructure
Speaker 1: Conference and Altum this week, which is New Zealand's big
Speaker 1: infrastructure conference. Everyone goes along all the infrastructures post people
Speaker 1: literally the opposition and people from the sector head along
Speaker 1: to have a chat about all things infrastructure. Ollie, thank
Speaker 1: you for joining us.
Speaker 2: Cuda. Thomas, thank you very much for having me on
Speaker 2: the show.
Speaker 1: Did you have a good time?
Speaker 3: I did have a very good time. I caught about
Speaker 3: a day and a half of it. By the end
Speaker 3: of All About Lunch show yesterday, I thought that I
Speaker 3: had probably heard about enough about inftructures to ask me
Speaker 3: for the next kind of six months. But it was
Speaker 3: an illuminating and varying conference. He had people like Francis
Speaker 3: for Kiyama there, which is really highlight for me. And
Speaker 3: then the Mayor of Auckland, Wayne Brown, delivered a very
Speaker 3: cantankerous and quite amusing speech yesterday were not like him,
Speaker 3: which led to a lot of joking from MCJ. Tams saying,
Speaker 3: you know, tell us what you really feel about these issues.
Speaker 3: He essentially told like the nine hundred assembled attendees who
Speaker 3: are kind of engineers and such professionals, that he didn't
Speaker 3: really like their work. In many cases it was a
Speaker 3: very kind of confrontational approach from the mayre, but you know,
Speaker 3: laying down a bit of a challenge to the sector
Speaker 3: to do things cheaper and faster, right color.
Speaker 1: I mean, I suppose Francis Foam a bit of a
Speaker 1: left field you know, well known for the the article
Speaker 1: on foreign policy, I think, and then the lad of
Speaker 1: the book the End of History and uh this uh
Speaker 1: kind of top something, theasis on what the end of
Speaker 1: the Cold War, I guess meant for you know, the world.
Speaker 1: Why was he there? What was.
Speaker 3: It's a very good question, I actually think. I asked
Speaker 3: Nick Leggett, wo's the CEO of Abstruction of Zealand a
Speaker 3: while back, how they had managed to get Francis for
Speaker 3: Kiama to speak and why? And I think that he
Speaker 3: told me that both he and a policy advisor at
Speaker 3: the Abstruction Zealand, Martine Marini had been listening to the
Speaker 3: same podcast, which I think was probably one you're familiar with,
Speaker 3: The Rest is Politics.
Speaker 1: I'm a very good podcast.
Speaker 2: Yes, yes, the.
Speaker 3: Rest is everything. Now the resis history, you know politics.
Speaker 3: So I think France is on there. And he happened
Speaker 3: to mention or discuss infrastructure, and he's been thinking a
Speaker 3: lot about it recently in terms of it being a
Speaker 3: challenge to liberal democracies like the United States also here obviously,
Speaker 3: and his main kind of position seemed to be that
Speaker 3: we have title sales and knots and these kind of
Speaker 3: more democratic kind of societies where everyone gets a say
Speaker 3: on whether or not a project proceeds.
Speaker 2: He referred to it as the vtocracy.
Speaker 3: And gave a very wishing example about California, which I
Speaker 3: didn't know about, where essentially any citizen can kind of
Speaker 3: take a suit or a case and do so anonymously
Speaker 3: if they want to challenge a project going ahead. So
Speaker 3: he referred to know the state having kind of forty
Speaker 3: million veto votes about to them suchually being built, and
Speaker 3: so not building things funnily enough is bad for economic
Speaker 3: growth and bad for societies. So he views that as
Speaker 3: a real challenge for Western countries like the US and
Speaker 3: New Zealand.
Speaker 1: That's quite an a kind of intervention really in the
Speaker 1: national debate around infrastructure, particularly as we sort of agonize
Speaker 1: over the extent to which something like the government's fast
Speaker 1: Trak bill as a good thing because it's sort of
Speaker 1: severely good tales. Right.
Speaker 2: Yeah, I was just gonna say, that's right.
Speaker 3: It's a very kind of prescient message from him, and
Speaker 3: it really does kind of tie into the debate that
Speaker 3: we're having around the fast Track and Asructional Minister christ
Speaker 3: Bishop made similar points that it was just too hard
Speaker 3: to get things built in New Zealand and as a consequence,
Speaker 3: we had this kind of looming and such a defficent
Speaker 3: that everyone likes to put massive dollar figures to. I mean,
Speaker 3: who knows if it's a hundred billion, two hundred billion
Speaker 3: I think was a ASP Bank referred to the trillion
Speaker 3: dollar figure, which gets a lot of derision from some economists,
Speaker 3: but there you go.
Speaker 1: Yeah, I feel like I've been doing infrastructure for a while,
Speaker 1: like you and every soft and someone like the Infrastructure
Speaker 1: Commission a couple of years ago was a two hundred
Speaker 1: and ten billion dollars of deficit, and then there was
Speaker 1: another two hundred billion dollars or something of of unmet
Speaker 1: of demand that was coming down. So I think we
Speaker 1: start from the board of two hundred billion dollars behind,
Speaker 1: and then there's something like two hundred billion dollars worth
Speaker 1: of stuff that we need to build for the demand
Speaker 1: forecast going forward. That's right, the trillion dollar figure. Then
Speaker 1: we had the three Waters figure of one hundred and
Speaker 1: eighty five billion. Do you know these these numbers are big?
Speaker 2: The mind boggles, Thomas, the mind boggles.
Speaker 1: What do you think of? How did the the government
Speaker 1: announcers in the coalition agreements that it wanted to build
Speaker 1: a new infrastructure agency. We've already gotten Structural Commission, uh so,
Speaker 1: so there's this is going to be a new infrastructure
Speaker 1: agency built on top of Crown Infrastructure partners. They talked
Speaker 1: about this infrastructure pipeline. I mean, like you have been.
Speaker 1: I actually attended one of these in person. But you know,
Speaker 1: since the Infrastructure Commission was set up under the last government,
Speaker 1: we've been hearing a lot about this pipeline issue. Everyone
Speaker 1: complains about the pipeline. City Rail Link chief executive. Very
Speaker 1: good interview with Katie bredvort On Q and a a
Speaker 1: few weeks ago, City Rail Links chief executive outgoing complaining
Speaker 1: that you know, there isn't this pipeline. So they bring
Speaker 1: in all this expertise and then the expertise just leaves
Speaker 1: because there's nothing for them to do. I feel like
Speaker 1: we've been talking about that issue for so long now
Speaker 1: it's been it's not this isn't new. No one's been
Speaker 1: surprised by The Infrastructure Commission has been publishing lists of
Speaker 1: the of of projects, the rough cost and when when
Speaker 1: they're set to start construction, and you know what sage
Speaker 1: of planning human construction art. So we've been talking about
Speaker 1: the pipeline for a while. Now Chris Bishop comes along
Speaker 1: and and builds us uh tries to build a bit
Speaker 1: more on that existing publicly available pipelines with this announcement.
Speaker 1: How did how did it go down in the room?
Speaker 1: It was a secret The politician of the opposition clearly
Speaker 1: that not that.
Speaker 2: It was. It was well received. I think.
Speaker 3: I mean these this is a group of people who
Speaker 3: obviously kind of experts in their delivery and consenting and
Speaker 3: kind of planning of infrastructure, and so they like to
Speaker 3: hear politicians say that they're going to create a stable
Speaker 3: pipeline of projects. As you said, Sean Sweeney got a
Speaker 3: lot of kudos for that interview that he gave around
Speaker 3: his concerns that there wasn't this kind of ongoing pipeline
Speaker 3: of kind of tunneled projects in particular I think New Zealand.
Speaker 3: So yeah, the room definitely received Bishop's speech well, it
Speaker 3: was well received. It's as you say, though, it's the
Speaker 3: constant discussion and infrastructure. I like to joke about how
Speaker 3: many times the word pipeline will be kind of mentioned
Speaker 3: at these kind of conferences and place bets about will
Speaker 3: be fifty or one hundred or twohndred times, and it yeah,
Speaker 3: it dominates the thinking from a lot of people in
Speaker 3: the sector that there needs to be a stable kind
Speaker 3: of list of kind of forward projects that the governments
Speaker 3: are committed to funding, and that gives certainty obviously to
Speaker 3: the sector to scale up, equip and actually kind of
Speaker 3: deliver things. So it was definitely a well received speech
Speaker 3: from Bishop, and I think there were some there was
Speaker 3: a bit of positivity as well about the creation of
Speaker 3: this National Instructure Agency just as kind of retooling Crown
Speaker 3: of Search Partners and kind of beef it up the
Speaker 3: real kind of emphasis that the government seems to be
Speaker 3: placing on this is that it wants it to be
Speaker 3: a shop front, is how they've described it, so to
Speaker 3: kind of funnel outside capital, sovereign wealth fund capital and
Speaker 3: get those kind of PPP partners in to partner with
Speaker 3: the government to deliver these kind of roads and other
Speaker 3: bits of instructure that we that we need.
Speaker 2: So, yeah, it was a really interesting speech.
Speaker 1: Actually, one of the interesting as you say this is
Speaker 1: this big attempts on the part of the government sort
Speaker 1: of has this two track approach to kind of physical
Speaker 1: management and infrastructure. On the one hand, it wants to
Speaker 1: be a probe for the structure government, uh and and
Speaker 1: and to build a lot and to to get a
Speaker 1: lot of investment into this infrastructure. And on the other
Speaker 1: hand it is it is trying to position itself as
Speaker 1: a government of a physical restraint, low debt and and
Speaker 1: and reducing reducing, reducing levels of debt. So so it's
Speaker 1: emphasizing the role that private capital and having building and
Speaker 1: building a lot of this stuff. And so obviously that
Speaker 1: the ball is really in the in the court of
Speaker 1: private capital in terms of this is actually sustainable and
Speaker 1: can succeed when you look at them when the here.
Speaker 1: This year we published those estimates from from Wakotahi about
Speaker 1: what some of the brons the roads of national significance
Speaker 1: might cost tens of billions of dollars governments. When you
Speaker 1: tend to get private capital involved there, do you get
Speaker 1: the sense from the secret that, I mean, there is
Speaker 1: there enough appetite for all of what we want to do.
Speaker 2: Yeah, it's a very good question.
Speaker 3: So I caught up on the sidelines with some people
Speaker 3: from Plenary, which is an Australian kind of PEPP investor.
Speaker 3: They came over for the conference. They've expressed and been
Speaker 3: very public in their enthusiasm for New Zealand as a
Speaker 3: possible kind of market for them, and I think there
Speaker 3: was a remark made that it was kind of one
Speaker 3: of the busier building nations in some time, and there
Speaker 3: was quite a large Australian contingent, So I think there's
Speaker 3: definitely some There's definitely appetite from investors wanting to put
Speaker 3: money towards kind of insectual projects in New Zealand.
Speaker 2: There were some very interesting speakers.
Speaker 3: There was the head of transactions at Treasure I think
Speaker 3: same as Alistir Birchall made this kind of comment that
Speaker 3: the direction of travel that the government has signaled is
Speaker 3: kind of moving more towards this kind of user pays
Speaker 3: or beneficiary pays approach to instructure where the Crown is
Speaker 3: more kind of seen as a funder of last resort,
Speaker 3: where you know, perhaps the first kind of point of
Speaker 3: care would be to se whether or not there are
Speaker 3: private investors interested in delivering and building these projects. But
Speaker 3: as you say, on the other hand, these are very
Speaker 3: expensive projects. I think that Northern Expressway linking Fuga Day
Speaker 3: to Auckland, there's been some estimates for that one corridor
Speaker 3: kind of requiring about ten billion dollars in investment. The
Speaker 3: government has been very enthusiastic.
Speaker 2: It's broad.
Speaker 1: You kin of look like nothing.
Speaker 3: Well, that's a funny thing actually, Like Bishop likes to
Speaker 3: do this and talk about projects in terms of their
Speaker 3: kind of like number of transmission guns.
Speaker 1: I've heard this as well. Everything was quitified in terms
Speaker 1: of multiples of transmissions. I think you've even talked about
Speaker 1: it as emergency housing was like one transmission gully or
Speaker 1: something that every year or period of time.
Speaker 3: It's like the new gold standard for comparing the cost
Speaker 3: of projects New Zealand how many transmission galleies. So yeah,
Speaker 3: I think in this case the Northern Expressway would be
Speaker 3: about what five or six And so there was a
Speaker 3: very interesting kind of remark by Karen Mitchell, who is
Speaker 3: a partner at KPMG, and she has I think advised
Speaker 3: on like five of the last eight PPPs that we've
Speaker 3: ever done in New Zealand. She's an expert on the sector.
Speaker 3: She I think I read her comments as her wanting
Speaker 3: a lot more kind of informed discussion around the costs
Speaker 3: associated with some of these PPPs, because the point was that,
Speaker 3: and everyone raises this, the crown has a lower cost
Speaker 3: of borrowing than the private sector. Therefore it's cheaper to
Speaker 3: off its own balance sheet. But there are advantages with
Speaker 3: doing PPPs, namely kind of driving innovation and you kind
Speaker 3: of sign up to maintaining one bit of road for instance,
Speaker 3: for like ten twenty thirty years, which were not very
Speaker 3: good at doing so.
Speaker 2: Sermainly benefits.
Speaker 3: But what she was saying is that the benefits need
Speaker 3: to be you need to extract value from PPPs and
Speaker 3: try and get as much value as the difference between
Speaker 3: the crown boring costs and the private sector borrowing costs
Speaker 3: and where you can do that, it might make sense
Speaker 3: to do a PPP, but otherwise the case looks a
Speaker 3: bit more shaky for things like hospitals, for instance, or
Speaker 3: things where there's not a kind of clear revenue tool
Speaker 3: attached to them, like holding when it comes to roads. So, yeah,
Speaker 3: it was it was a very interesting discussion about the
Speaker 3: merits of PPPs, and the government certainly seems very keen
Speaker 3: to do a number of them.
Speaker 1: It is interesting that that remark you made the government
Speaker 1: being the funder of last Resorts sort of the key
Speaker 1: government's experiments with with with PDPs. Well, it did. It
Speaker 1: did feel, particularly in the road space that they were
Speaker 1: they were they were test cases for for for what
Speaker 1: this government might be looking to do, rather than a
Speaker 1: kind of full on this. This government seems to have
Speaker 1: taken those test cases and thought like, well, right, this
Speaker 1: is our we're going to We're going to fundamentally rethink
Speaker 1: the way that we fund most significant transport projects to
Speaker 1: to to to have a private capital is really the
Speaker 1: first cab off the rank, rather than you know, sort
Speaker 1: of alio portfolio next.
Speaker 3: Yeah, that's right, And like the point that I found
Speaker 3: really interesting was Karen Mitchell was asked by an audience
Speaker 3: member just sturing the Q and A about was there
Speaker 3: a trade off whereas you know, would it be a
Speaker 3: bad idea to rush into some short term PPPs that
Speaker 3: might look very good, but does that then kind of
Speaker 3: constrain future government's abilities to invest in their own priorities.
Speaker 3: And there's a good example with this, So like the
Speaker 3: two routing products that we currently have, which is PERO
Speaker 3: to walk with and Transmission Gully. I think it's about
Speaker 3: two dred and twenty six million dollars a year in
Speaker 3: availability and maintenance payments that come out of the NLTF
Speaker 3: to service those two roads alone. So Carrie Mitchell said,
Speaker 3: like some work had been done when the government was
Speaker 3: looking to get into those contracts around you know, how
Speaker 3: many kind of pepp arrangements was it feasible to enter
Speaker 3: into before the nl ETF gets kind of overly or
Speaker 3: too overly constrained. And so there was a suggestion that
Speaker 3: there is definitely a limit to how many you can
Speaker 3: actually feasibly do and that you really do need to
Speaker 3: seek the most high value projects to pursue as PPPs
Speaker 3: where you can kind of extract some revenue back from
Speaker 3: them because you still have to fund them. You just
Speaker 3: pay them back over you know, thirty years as opposed
Speaker 3: to upfront.
Speaker 1: Thanks Sali. We've going to quickly hit to a break
Speaker 1: and then we'll be right back with more on the tiles.
Speaker 1: Welcome back to on the Tiles. I'm talking to Olli Lewis,
Speaker 1: Business Desks Infrastructure editor, who was at the Building Nations
Speaker 1: Infrastructure Conferences week. We were just talking about p p
Speaker 1: p s and the pressure that they place on the
Speaker 1: road funding system. Really making the interesting point that that
Speaker 1: the you know, the the revenue or the the income
Speaker 1: that we have from from from the transport system, the
Speaker 1: revenue we have from the transport system might not be
Speaker 1: sufficient to pay for the the vast numbers of p
Speaker 1: pp so we have to sort of prioritize in a
Speaker 1: very interesting interesting point that the government is. The government
Speaker 1: also announced it, well I supposed re announced it and
Speaker 1: announced an acceleration of of some revenue work that was
Speaker 1: doing in the in the in the transport space. We've
Speaker 1: been talking about We've been talking about getting rid of
Speaker 1: fuel taxes for a long time now, but the government
Speaker 1: seems to be quite keen to to really bring that about,
Speaker 1: moving the light vehicle fleet to road user charges as
Speaker 1: early as as early as potentially twenty twenty seven, and
Speaker 1: then and then looking at making it easier to begin
Speaker 1: tolling some some roads to to and and create value
Speaker 1: capture regimes to create revenue sources, presumably to make it
Speaker 1: make it easier for some of these PPP business cases
Speaker 1: to to stack up. Did you get the sense that
Speaker 1: I mean, is there what are the numbers sort of
Speaker 1: look like if you're if you're going if the government
Speaker 1: sort of goes out to market with with a coroller
Speaker 1: that it wants to develop into a p p P,
Speaker 1: they say, look, you know we can we can work
Speaker 1: out some value capture around this area. We can work
Speaker 1: out some tolling for this particular road. They seem keen
Speaker 1: to say, well, if if the business case of torolling
Speaker 1: stacks up, then we'll we'll really like tolling. Does that
Speaker 1: make that's Does that sweet and sweetened the deal for
Speaker 1: some of these some of these people, some of these
Speaker 1: providers looking to to do PPPs in New Zealand.
Speaker 3: Yeah, it certainly. It certainly helps the government in terms
Speaker 3: of funding the cost of the PPPs. So for minderstanding,
Speaker 3: there's a pretty clear prefer from peer partners not to
Speaker 3: tie their payments to tolling, so they prefer just a
Speaker 3: straight availability payment from the government. And the reason being
Speaker 3: is that they don't want to accept this kind of
Speaker 3: patronage risk because if you you know, for instance, told
Speaker 3: this ten billion dollar Northern Expressway corridor, you'd have to
Speaker 3: set a really kind of artificially high toll in order
Speaker 3: to kind of make a return on that and to
Speaker 3: kind of cover the costs of your capital, and so
Speaker 3: it wouldn't be used. It's like, it's unfeasible to toll
Speaker 3: those kind of very very high cost, relatively low patronage
Speaker 3: roads and kind of cover the costs of the investment.
Speaker 3: So it makes sense for the New Zealand government to
Speaker 3: be looking at how does it offset or try and
Speaker 3: get more revenue from a road that is constructed from
Speaker 3: the PPP model. But the private partner themselves wouldn't necessarily
Speaker 3: want any risk associated with the number of kind of
Speaker 3: vehicles that are willing to pay.
Speaker 2: Those kind of rules. So yeah, it's a very interesting area.
Speaker 3: Actually that the Inmstry Commission did some work suggesting that
Speaker 3: kind of you know, tolling was likely to kind of
Speaker 3: cover the long term costs of you know, less than
Speaker 3: a quarter of most new roads and the instances in
Speaker 3: which it would kind of cover those full costs over
Speaker 3: the you know, a set period. The Harbor Bridge is
Speaker 3: a good example that kind of covered its face with
Speaker 3: tolling over a period of time. As you have to
Speaker 3: have very significant time savings of like fifteen minutes or more,
Speaker 3: you've got to have very decent kind of traffic volumes
Speaker 3: of kind of forty thousand vehicles a day or plus,
Speaker 3: and for comparison's kind of like the busiest points of
Speaker 3: the christ Which motorway network. I think bro I'm s right.
Speaker 3: And you also have to have relatively kind of low
Speaker 3: build costs, which is quite difficult in New Zealand with
Speaker 3: some of the roads that we've seen. I know that
Speaker 3: you've covered a lot of this Thomas with things like
Speaker 3: all Tucky to north of Leven. We've seen big blowouts there.
Speaker 3: PenLink was a recent kind of cautionary tail and that
Speaker 3: the delivery time has slipped out to twenty twenty eight.
Speaker 3: It was meant to be twenty twenty six, and so
Speaker 3: we seem to have like a hard time to ring
Speaker 3: roads for you know, relatively affordable prices in New Zealand
Speaker 3: got for a challenging geography, and it makes it harder
Speaker 3: to kind of recoup those costs from tolling.
Speaker 1: Right and so yes, when you when you think about that,
Speaker 1: so first of your if, the if the if that's
Speaker 1: what you're looking for. There can't be many on the
Speaker 1: PPP or on the runs list many just off the
Speaker 1: top of my head that would that would stack up
Speaker 1: in terms of traffic volumes and low build costs. They
Speaker 1: all seem quite expensive and and and I mean they
Speaker 1: don't seem incredibly low traffic volumes, but none of them
Speaker 1: would seem to be a high traffic volumes or to
Speaker 1: have high trap of volumes to the extent that they
Speaker 1: would they would give what a day? Did you say?
Speaker 3: Yes, that's right? That so Peinlic's are a good example. Like
Speaker 3: that's the seven kilometer highway Lincoln kind of set how
Speaker 3: one north of Auckland to the Fung Peninsula that that
Speaker 3: has very substantial time saving.
Speaker 2: I think it's about fifteen minutes.
Speaker 3: It's been talked about as a toll road project since
Speaker 3: the early two thousands. It's always been kind of thought
Speaker 3: of as something would only happen if it was told
Speaker 3: the last government accepted a proposal from NDITTA to toll
Speaker 3: the road. And I've been quite obsessed with this example
Speaker 3: because I see it as a bit of a bowe
Speaker 3: weather in terms of the government's kind of political appetite
Speaker 3: to follow through and it's tolling rhetoric. So while the
Speaker 3: last government agreed to toll PenLink, this government has yet
Speaker 3: to make any formal decisions around it, despite saying in
Speaker 3: the GPS that it would accept all recommendations from NDTA
Speaker 3: to toll new roads. INDITA definitely wants to toll Peenlic.
Speaker 3: They're very keen to do that, and they say that
Speaker 3: if you don't do that, the operating and the maintenance
Speaker 3: costs that would be covered by tolling needs to kind
Speaker 3: of come from the that increasingly broken in LTF kind
Speaker 3: of pool of money that we have to pay for transport.
Speaker 3: So yeah, I just find it really interesting that the
Speaker 3: Transporte mister sim Brown has yet kind of make that call.
Speaker 3: He just says that there's the reason he hasn't is
Speaker 3: because there's a delays with the project and that ENTITA
Speaker 3: currently is a very inefficient kind of system for collecting
Speaker 3: tolls where I think he said, like thirty two percent
Speaker 3: of costs of the kind of revenue you receive from
Speaker 3: tolling as used just to operate the tolling system. And
Speaker 3: so he wants to see that improved to make it
Speaker 3: more kind of efficient to roll out tolling more broadly
Speaker 3: and more widely.
Speaker 1: I heard apparently as we get more, as we get
Speaker 1: more toll roads, that the administration cost can be shared
Speaker 1: between the toll roads, so as a proportion of the
Speaker 1: total tolling system, the admin cost would would reduce. That
Speaker 1: is that your understanding as well?
Speaker 3: That certainly makes sense, and I think NDTA has got
Speaker 3: a bit of a program of work underway to look
Speaker 3: at that having kind of a more efficient kind of
Speaker 3: back office tolling function that could be you know, implemented
Speaker 3: across different roads.
Speaker 1: Certainly an interesting as you say that, that is an
Speaker 1: interesting belt. Whether it's a government that's kind of self
Speaker 1: consciously positioned itself as pro tolling to an extent that
Speaker 1: I haven't I can't remember, I told her, I mean,
Speaker 1: all charges are unpopular. So governments in the past have
Speaker 1: been you know, historically really well lukewarm to anti tolling
Speaker 1: is the first one I can remember that it's been
Speaker 1: self consciously pro tolling, and as you say, brother, they
Speaker 1: have the opportunity to about that they are on the
Speaker 1: fence on.
Speaker 3: Yeah, I find it really bizarrely because there's political cover
Speaker 3: and that obviously the last government, Labor government up to
Speaker 3: two toll PenLink. And I made the point when I
Speaker 3: attued to me and Brand about this recently that surely
Speaker 3: the local residents would want clarity sooner rather than later,
Speaker 3: regardless of not of whether there's any delayed with the
Speaker 3: road opening. But yeah, as you said, it's not popular.
Speaker 3: I think when ZTA consulted on PenLink it was like
Speaker 3: sixty percent opposition I think for local residence or more.
Speaker 3: We're going to see later this year the Transform Minister's
Speaker 3: announced it's going to be ant consultation on three additional
Speaker 3: kind of North Island toll road proposals. One of them
Speaker 3: is Awtucky to North have live in. So it makes
Speaker 3: a lot of sense as a way of kind of
Speaker 3: funding your kind of cost of doing the road and
Speaker 3: the maintenance and operating cost of running them, but people
Speaker 3: don't really like them. It's if you ask someone would
Speaker 3: you rather a free road or would you rather pay
Speaker 3: three dollars to travel on the road. It's pretty hard
Speaker 3: to build a case with that. And so I think
Speaker 3: the transformentis has been very clear that he wants to
Speaker 3: kind of make sure that any kind of toll road
Speaker 3: has very demonstral benefits for the traveling public. They have
Speaker 3: to see a return and a reason that they are
Speaker 3: getting charged money to use it.
Speaker 1: I just kind of shop with them with these changes
Speaker 1: to the revenue system, so moving to moving to moving
Speaker 1: like light vehicles away from fuel fuel excise duty to rucks,
Speaker 1: and and I suppose I just just covered off the
Speaker 1: tolling tolling stuff. I mean there are obviously this is
Speaker 1: as you said before, the review system is broken. Is
Speaker 1: struggling with with with with with the amount of revenue
Speaker 1: that that that the system is generating at the moment.
Speaker 1: But you know, no silver bullet in terms of moving
Speaker 1: millions of vehicles to road user charges for some concerns
Speaker 1: that that that the WA which is you know, struggling
Speaker 1: struggling to which has struggled to roll out this national
Speaker 1: ticketing solution for for for people who use public transport.
Speaker 1: You know, that's that difficulty enough with that, I mean
Speaker 1: to say nothing of of creating the system whereby millions
Speaker 1: and millions of of of light vehicle drivers will will
Speaker 1: will need to buy road user charges. I mean it
Speaker 1: feels it feels like there's a reason why there's a
Speaker 1: reason why governments have been so keen to well, I
Speaker 1: have been so tensative to move in this direction because
Speaker 1: it seems like a sort of no overpay waiting to happen.
Speaker 3: Yeah, it's a good reference there. I mean, it's very
Speaker 3: complicated about it, and so I was. I think the
Speaker 3: most new bit of information around this revenue action plan
Speaker 3: that the Transport Minister announced yesterday was the date.
Speaker 2: So as you say like it's.
Speaker 3: Been in the works for a long time, I think
Speaker 3: under the last government there was a review initiated of
Speaker 3: the Land Transport even news system because both parties except
Speaker 3: that the kind of current system is fundamentally broken. I
Speaker 3: think of the twenty two billion in spending in this GPS,
Speaker 3: only about thirteen point eight billion of that comes from
Speaker 3: FED and Rock. So it's no longer the kind of
Speaker 3: user or cost recovery system that was meant to be.
Speaker 3: We're continuously plugging the gaps with kind of Crown loans
Speaker 3: and grants, and as the instuct Commission sees that as
Speaker 3: actually that very scarce crown capital could be applied to
Speaker 3: other priority areas like health or education. So you start
Speaker 3: to kind of see that direct kind of competition for
Speaker 3: scarce resources getting sucked up into the transport system, which
Speaker 3: is meant to be user pays yea with moviehead and
Speaker 3: moving all of the fleet from I'm not sure if
Speaker 3: it was from twenty seven or by twenty twenty seven.
Speaker 3: It was a slight ambiguity around the way it was phrased,
Speaker 3: but I mean to me, that seems an incredibly ambitious target.
Speaker 3: If it's to transition the fleet by twenty seven, even
Speaker 3: if it's from twenty twenty seven, it's a huge administrative
Speaker 3: kind of exercise to do that, and it's going to
Speaker 3: be a logistical kind of I don't want to say nightmare,
Speaker 3: because I think it's a good direction of travel. It's
Speaker 3: not a night mirror situation by any means, but it's
Speaker 3: going to be incredibly difficult for the government in the
Speaker 3: ZTA to achieve those kind of time frames and to
Speaker 3: get public buy in for it as well.
Speaker 1: Yeah, it would be very it would be. I mean
Speaker 1: for millions of people who aren't used to fill going
Speaker 1: online and buying a rock and then you know, what
Speaker 1: do you so do you as you say, you know,
Speaker 1: one can't imagine that the entire one can't imagine on
Speaker 1: one July twenty twenty seven that that that you just
Speaker 1: flick a switch and it's all gone. I would imagine
Speaker 1: a transition period of some kind, and so what do
Speaker 1: you what do you do? You fill up and then
Speaker 1: you claim and exam you know, do you claim it back?
Speaker 3: Yeah, that's right, because I think you wrote about this.
Speaker 3: It was a good piece, by the way, referring to
Speaker 3: the increase or the planned increase in kind of fuel
Speaker 3: excess texts from twenty twenty seven. Obviously, this government attacked
Speaker 3: the previous government and it's GPS for wanting to put
Speaker 3: up few exercise charges to kind of cover that, you know,
Speaker 3: increasingly large gap between revenue and expenditure. They're now saying
Speaker 3: that actually we do, we do very much want to
Speaker 3: use existing kind of funding tools to kind of increase.
Speaker 2: Revenue.
Speaker 3: And so one of those was increasing fuel taxes from
Speaker 3: twenty twenty seven I think twelve CENTI letter. So yeah,
Speaker 3: it's going to be a very tricky balance. I think
Speaker 3: to kind of price ruck at a good enough level
Speaker 3: and then to have that kind of certainty of revenue
Speaker 3: in as you transition the system whilst you've got some
Speaker 3: very expensive bills to maintain.
Speaker 2: So it's going to be a very inting balancing act.
Speaker 1: And what if you're what if you're a car someone
Speaker 1: who's you know, paying for ruck, you've sort of got it.
Speaker 1: I mean, these households don't actually don't really have the
Speaker 1: time or the energy to sort of be buying ruck
Speaker 1: and then claiming back fuel excise that they have paid,
Speaker 1: you know, especially if it goes up by twelve cents
Speaker 1: a letter, that's that would be you'd be giving up
Speaker 1: to close to ninety cents. I think by the if
Speaker 1: it was twelve CENTI leader, there would be just under
Speaker 1: ninety cents. I think that's a lot of that's a
Speaker 1: lot of money to have to be out of pocket
Speaker 1: buy until you enclaim it back. Of that sort of system.
Speaker 1: If that's what a transitional system looks like, I don't know,
Speaker 1: if it's just it just seems to be, you know,
Speaker 1: that's I'm not sure that many people will be will
Speaker 1: be there grateful one. But as you say, maybe that
Speaker 1: maybe they'll do something around pricing rock competitively, I suppose
Speaker 1: you get into a situation where where that doesn't really
Speaker 1: help you in terms of the long term sustainability of
Speaker 1: the land transport fund.
Speaker 3: Yeah, and I mean there are technology providers like e
Speaker 3: road who offer technology solutions to make the payment of
Speaker 3: ruck a lot easier. I imagine that any transition to
Speaker 3: this new system will have to have a technology component.
Speaker 3: I think the Transportenis was pretty clear that the existing
Speaker 3: system where you kind of log in or go in,
Speaker 3: where do you go.
Speaker 2: To buy a rock and person?
Speaker 1: I have no idea.
Speaker 3: So probably know that, but yeah, he mentioned that it
Speaker 3: was very clunky.
Speaker 2: It's very kind of.
Speaker 3: Old fashioned system that was kind of revolutionary when it
Speaker 3: was in Tuose in the sixties, but were now in
Speaker 3: the twenty twenties. So there will definitely have to be
Speaker 3: some kind of back end tech to support this transition.
Speaker 1: Road just for listeners, this list is like a GPS
Speaker 1: style system that models is how far you're driven and
Speaker 1: what you are.
Speaker 2: Yeah, that's right.
Speaker 3: So they provide into listed company, they provide technology solution
Speaker 3: for largely for trucking fleets and so that's kind of
Speaker 3: like an in vehicle kind of transponder uses GPS technology
Speaker 3: to kind of calculate, you know, your distance traveled and
Speaker 3: then automatically kind of purchased ruck for you.
Speaker 2: It's very clever.
Speaker 3: Actually using satellite tech means that you don't pay ruck
Speaker 3: for traveling on private roads for instance like Forest Street
Speaker 3: and States, et cetera. You only pay for the use
Speaker 3: of public roads.
Speaker 1: Something that infrastructure builders actually use this because when when
Speaker 1: they're driving on roads they have not yet been built,
Speaker 1: they shouldn't be paying for you know, it's you're not
Speaker 1: using a piece of publicly fundel infrastructure which hasn't actually
Speaker 1: when it hasn't actually been built yet.
Speaker 3: Yeah, So a very nerdy and interesting kind of area
Speaker 3: the use of this like GPS kind of style charging,
Speaker 3: and like I think Singapore is a really good example.
Speaker 3: They have now enabled with their electric road Pricing two
Speaker 3: point zero system, there's kind of transponders and receivers in
Speaker 3: every single car. I think it's mandated now, but even
Speaker 3: they have not yet moved to a GPS tracking style
Speaker 3: of charging because there's I think there's a lot of
Speaker 3: kind of reservations from the public around privacy concerns and.
Speaker 1: National opposition, where Judith Collins was very hot on the
Speaker 1: privacy issue and she was leader.
Speaker 3: Yeah, that's right, because I mean some people who are
Speaker 3: perhaps more kind of anti government or anti authority wouldn't
Speaker 3: want the government to kind of have any kind of
Speaker 3: detailed records of their movements, et cetera. So it's going
Speaker 3: to be a very interesting kind of like logistical and
Speaker 3: privacy minefield to kind of to transition to this new
Speaker 3: system and then to actually have it getting enough revenue
Speaker 3: to fund out increasingly kind of perilously broken transport funding system.
Speaker 1: As you can imagine the years we've had with the
Speaker 1: controversy over the vaccination rolled out there and how that went.
Speaker 1: Any government mandating tracking in people's cars is probably going
Speaker 1: to be quite cautious about the way that it does,
Speaker 1: given the pushback something is sort of benign as vaccination,
Speaker 1: as vaccinations generated.
Speaker 2: Yeah, that's that's right.
Speaker 3: And I think obviously, like the first iteration of this
Speaker 3: wouldn't be kind of GPS tracking. It'd be kind of
Speaker 3: as the existing rock system does. You just kind of
Speaker 3: pay for a pre determined amount of kilometers and then
Speaker 3: your odomesa or you're kind of is checked or kind
Speaker 3: of made sure that you are paying for what you
Speaker 3: you are. But there's something kind of set of reforms
Speaker 3: that the Transmit Minister is kind of pushing ahead with
Speaker 3: at pace, and it's going to be very interesting to
Speaker 3: watch how it plays out, given that we've got some
Speaker 3: very big bills coming up each of us in transport.
Speaker 1: And because well hopefully there's enough money to pay them. Ali,
Speaker 1: thank you so much for joining us and none the
Speaker 1: titles this week. I hope you hope you had a
Speaker 1: good time at the conference, and you're off traveling soon,
Speaker 1: so I hope you very much enjoy your travels.
Speaker 3: I thank you so much as for a real pleasure
Speaker 3: to be here. It's been fun chatting in Strucure with you.
Speaker 1: It's always fun chatting. Infrastructure that was on the tiles
Speaker 1: for another week. I have a quick correction to make
Speaker 1: about something that was on the tiles a couple of
Speaker 1: weeks ago. I was talking about the Green Party constitution
Speaker 1: and the way that the constitutional changes of a couple
Speaker 1: of years ago relatively disempowered some of the networks and
Speaker 1: empowered the lived experience networks. Actually they have not literally,
Speaker 1: they the changes empowered their lived experience networks, but they
Speaker 1: did not literally disempower the non lived experience networks. They
Speaker 1: only relatively changed in the level of power. I'm very
Speaker 1: grateful to Eagle led Green Party listeners who pointed that out.
Speaker 1: They guard their party constitution jealously and fair enough. Everyone
Speaker 1: should care about this sort of stuff, So thank you
Speaker 1: very much of it. And that was on the tiles
Speaker 1: for another week. Thank you to Ollie Lewis the infrastructure,
Speaker 1: we different businesses for joining us, and we'll be beating
Speaker 1: next week. Look for more on the task. Thanks again
Speaker 1: for listening. Ethan Sills as always as our producer