Appropriation (2026/27 Estimates) Bill

Shall I wait until the Minister in the chair has switched over?

Hon Chris Bishop: Yeah, yeah—come on.

CHAIRPERSON (Barbara Kuriger): We won’t be long. We really do technically need to have a Minister in the chair.

ANDY FOSTER: Thank you, Madam Chair. I’m pleased to speak on behalf of the Transport and Infrastructure Committee and also on behalf of New Zealand First. We had really good sessions with the relevant Ministers—the Minister of Transport, the Associate Minister of Transport, and the Minister for Rail—and also with agencies. I can see the Ministry of Transport and the New Zealand Transport Agency (NZTA) have joined us. Also, on the ferries issue, with Ferry Holdings and KiwiRail—it was a lot of really, really good information that we got and some good, really meaty issues that we pursued. One of the things that becomes patently obvious, not just in transport but across the country, is that we don’t have enough money for everything we want to do. Therefore, we’ve got to cut our cloth to meet the resources which are available and use what we have got as best we possibly can.

One of the things that we did traverse in quite some length was the issue of asset management. It’s about looking after the assets we’ve got, something that has been stressed to us time and time again as we’ve met particularly with the Infrastructure Commission. I’m delighted that the conversation we had with the Minister in the chair when he was in front of us, as a select committee, was the idea of legislating for good asset management, so that we’re actually looking after the assets we’ve got and we’re not letting them depreciate. That’s not just transport, it’s not just water; it’s hospitals, it’s schools—it’s right across the board that we need to look after those assets better. The direction to suggest that we are going to be looking to legislate next year to require that of organisations is a really good one. I think it will be a game changer.

One of the things that did challenge that, and we did have a conversation about this with the Minister, was the place of the Government policy statement. The Government policy statement on transport has been, essentially, a diktat of the Minister over time—if the Minister says, “I’m going to allocate this much to this pot, and this much to this pot, and this much to this pot.” It is how that links with asset management. If the Minister says, “I want to go and build a whole lot of new roads”—or a whole lot of new railways, or whatever it might be—and there’s not enough money left to look after the assets that are there, that would seem to conflict directly with that. That was an issue I’d certainly like the Minister to respond to.

We had a bit of a discussion around the roads of national significance and how they were fundable. It has been very clear to the select committee for some time that we can’t fund all of those roads of national significance in a short period of time. They might be drawn out over a much longer period of time. It’s a question, then, of how those get prioritised. Again, it would be good for the committee, I think, if the Minister was to talk through a little bit about how that might be advanced. I note that the roads of national significance which are on the table at the moment do not include a second harbour crossing in Auckland. Again, how that gets funded will be of a great deal of interest, I’m sure, both to the public and to the House.

We had a really fascinating discussion talking about the Auckland Harbour Bridge, a really fascinating discussion about the maintenance of that bridge. I can see the chief executive smiling at that. It was really, really interesting—

CHAIRPERSON (Barbara Kuriger): Don’t bring the officials into the debate.

ANDY FOSTER: Oh, it was only said—

CHAIRPERSON (Barbara Kuriger): I know you’re being nice, but please don’t bring the officials into the debate.

ANDY FOSTER: It was a really, really interesting conversation that we had around that.

On the maintenance side, we really stressed, also, that it’s not just the maintenance of State highways. NZTA is the part-funder—at least 50 percent funder—of every local road in the country, and sometimes more than 50 percent. The funding assistance rates are sometimes as high as 70—or, in emergency situations, even higher than that. What we were stressing as a select committee—and again, I’d appreciate the Minister’s feedback on this—is the importance of maintaining not only the State’s assets but also the assets owned by local government, which are partly funded by the State through the petrol taxes. Of course, those petrol taxes and road user charges are derived from people who drive on State highways and on local roads equally, which is why they’re funded in the way that they are.

We noted that there is a significant bow wave of ageing bridges, and it’s been really interesting. I commend the South Island for its approach now. They’ve been very, very vocal about this. They’ve said, “Hey, here is how we can grow our economy.”—they’re doing better than the North anyway—“That’s really important.” I see the Minister for the Mainland is backing me up on that. One of the things they have stressed is the importance of maintaining the assets they’ve got, and that includes the bow wave of bridges and also the ability to be able to maintain seal, etc., roads. Again, some feedback on that will be really appreciated.

If I might, just looking at the time that’s available, just to finish off, we also spent a bit of time on the ferries front and noted the excellent progress that was being made with the replacement ferries, at a much lower cost than was the case under iReX. We also noted that rail is gaining market share. The Minister said that the rail freight market share is up 7 percent, compared to 2 percent for road. We also had some interesting and very useful discussions around potential new rail lines—obviously, the one to Marsden Point being talked about, but also through Auckland, the Fourth Main, and Avondale to Southdown.

There were a lot of really meaty issues that the committee covered. I’d really appreciate the Minister’s feedback on some of those issues which I’ve raised. Thank you, Madam Chair.

Thank you, Madam Chair, and I want to acknowledge the Minister of Transport for his engagement through the Estimates process and also the chair, Andy Foster, who has just resumed his seat, for outlining the work of the Transport and Infrastructure Committee. I have a few questions. When we look at the Estimates as a whole, you can see some pretty clear things, so my questions are going to centre on, essentially: where’s the money, where’s the plan, and who’s ultimately going to pay? I know I have some colleagues who will want to ask some other questions about specific transport projects in their areas. Then I have some other questions, not quite on that theme, to finish off with. So I will make my start.

I want to start with the fundamental question of how the Government intends to pay for its transport programme. The chair of the Transport and Infrastructure Committee has touched on a couple of the impending issues that are before us, not just as a Parliament or as a select committee but as a country. The Estimates identify that the National Land Transport Fund is, essentially, a Budget risk because it doesn’t have sufficient funding beyond 2027-28 to cover what are its ongoing activities and debt. This year alone, the National Land Transport Programme relies on almost $2.3 billion worth of borrowing. At the same time, the Government has become much more reliant on direct Crown funding, and I want to ask a couple of questions about that.

The Minister himself has acknowledged that the Crown funding has gone from about 3 percent of the programme in 2018-21 to 39 percent in the current programme. Now, of course, there is some further uncertainty around the revenue that was meant to come from motorists—or “people”, as we also call them.

The Government’s policy has been for petrol excise to rise 22 cents over the next three years, but the Minister of Transport has essentially said on a couple of occasions that the increase to the fuel tax looks like a “non-starter”, I think was the quote. But, of course, we’ve also had the Prime Minister describe it as cancelled, frozen, and delayed. Regardless, there’s some uncertainty, and there’s certainly no clarity around that. We don’t know if the Government is going to increase the petrol tax by 22 cents per litre, but what we do know is that the Government has a transport fund that it acknowledges is underfunded. It’s borrowing billions of dollars to sustain it, and one of the planned sources of additional revenue is now in doubt.

But what’s missing from this Estimates is the explanation of how that gap is going to be filled. So my question to the Minister is: can the Minister, as a starter for 10, tell the committee what the size is of that projected National Land Transport Fund short fund beyond 2027-28? And if the 1 January 2027 fuel excise and road-user charge increases do not proceed—and I’m not necessarily asking for a yes or no confirmation here tonight; but if they don’t proceed, I’m assuming that a certain amount of thought would have already gone into what revenue would be foregone in 2027-28 and 2028-29. What kind of activity classes does the Minister sort of foresee or assume is going to absorb that loss?

Thank you to the member for her questions. They’re good questions, and they deal with some tricky issues that the Government’s confronting and which future Governments will have to confront no matter the political stripes of who is in Government. I also thank the chair of the Transport and Infrastructure Committee for his very sage comments, and I just, in passing, appreciate your engagement, Mr Foster, as part of a very hard-working committee on a range of different issues.

I think it’s good to see a level of maturity around these challenges in the Chamber tonight, because we do need to be up front around the fact that we do have a transport funding challenge, there’s no doubt about that, and future Governments are going to have to deal with it. No one wants to put up fuel tax. I get it. The last Government didn’t want to put it up. In fact, they cut it for a while and then, eventually, life had to go back to normality at some point. No one wants to put it up, but in real terms, so in other words, after inflation, it’s gone down by 20 percent since 2020—21 percent, I think it is, or it might be 22 percent—because no one’s put it up since 2020.

Prior to that, we had a moderate escalation in fuel taxes generally before that. Since then, we haven’t had it. COVID is the reason for that, and cost of living challenges. Now, they’re baked into the system. I get that one wants to put up fuel tax—we don’t want to do it either—but at some point, you’re just delaying the pain and you’re delaying the inevitable. In answer to the member’s question, we’ve not made a call yet on the tax rises scheduled for 1 January 2027. We see it as unlikely, but we haven’t made a decision yet, and so, when we do, we will let you know. In relation to the size of the fiscal challenge in relation to that, the short answer is it depends, because it depends on how much you defer them or cancel or push them out. The short answer is it depends. There is a fiscal trade-off.

To return to one of the central theses of the discussion tonight in the Ministry for the Environment hearing, or the Ministry for Cities, Environment, Regions and Transport hearing as well, these things have trade-offs and the reality is that our system, as the member rightly notices, is meant to be user-pays—it isn’t anymore. Back in 2017, it was broadly user-pays. Now, 40 percent of transport spending is from the Crown, and that comes with trade-offs—schools, hospitals, defence force, justice, corrections, police, and all the rest of it that we have to fund. There are trade-offs and the Government is working hard on broadening the range of funding tools because, frankly, a blunt use of just fuel tax as the proxy for road usage is not necessarily the right way to go about it. It’s imperfect, but there are other things you can do.

Tolling is one thing we’re looking at. We had a discussion down the line tonight at Buddle Findlay about greater use of tolling, which I think, broadly, people support, but have just got to bear in mind that it’s no silver bullet. It barely touches the sides of some projects. It’s a useful supplement, but it’s not a silver bullet. We talked about infrastructure funding and financing levies. Parliament’s just unanimously passed legislation to broaden the use of those in relation to transport projects and State highway projects. That will be a useful supplement, and there’s a range of other things we could look at as well.

We’re keen for broadening the revenue base and we’re keen to use different tools in order to make sure we can get projects away, but we can’t get away from the central conundrum of transport policy, which is: everyone wants stuff for which there is not enough money. I am sure that Tracey McClellan, and I’m sure that Dan Rosewarne, and I’m sure that Shanan Halbert will have transport projects they’re keen on, and I can tell you for free, because, no disrespect to you guys, but I know these colleagues better. I can tell you that my associate the Hon James Meager has got a list, Miles Anderson’s got a list, Dana Kirkpatrick’s got a list, Cameron Luxton’s got a list—everyone’s got a list, right. Everyone’s got a list of stuff, and sometimes I feel like Scrooge McDuck having to say no to everybody. Although, half the time it’s not my decision because it’s the transport agency’s, so I just make them give the bad news. But no, I’m being slightly facetious. But there’s not enough money. We all know that.

Just in the final 30 seconds to finish this point, you can kind of bemoan all that or you can do something about it. We’re broadening the revenue; we’ve got a greater focus on asset management and driving better value for money and optimising what we’ve already got; and we’re also really keen to get the costs down, because you can do more with less if you bring the costs of these projects down, and I think everyone’s on board with that. Doing so is not quite as easy as it sounds, but we’re all up for that. We’ve got a range of work under way.

Thank you, Madam Chair. I’ve probably got a quick follow-up, but I’m going to save that to the end of this next section because I’m going to move on. The second issue is the uncertainty the Government has essentially created for councils and regional transport committees who are, and I’m sure the Minister of Transport is well aware, now working on their regional land transport plans for the next funding period. But that one statutory document that is supposed to tell them what the Government’s priorities are and what the funding ranges are—the Government’s policy statement, the GPS—isn’t going to be released now until after the election. Some commentary exists about that, but I want to ask the Minister tonight.

Instead, the councils have been given an interim ministerial statement, and, obviously, that’s not a GPS—the clue is in the name. It doesn’t provide the same statutory process, and it certainly doesn’t provide those same funding ranges or certainty. I think it’s fair to say we are three years into this Government, councils have been asked to plan the next transport programme without that Government transport strategy, without the settled funding ranges, and without knowing what will actually be affordable. Can the Minister tell us tonight, or tell the committee, what document regional councils—essentially, what are they supposed to be basing these 2027-30 regional land transport plans on, and what legal status has this interim statement under the Land Transport Management Act? What is the legal status of that under the Act? And while I’ve got the Minister’s ear, can we also kind of have a look at what the revised timetable for the 2027-30 National Land Transport Programme would be? Actually, I suppose, simple questions like: can the New Zealand Transport Agency (NZTA) actually adopt a programme without the new GPS being in force? That’s a start. I’ve got a couple more questions along those lines, but I think that’s enough for the Minister.

Yeah, good questions. The current Government policy statement (GPS) period runs from the 1 July, 2024 through to 30 June, 2027 next year, so we’re actually over halfway through, but it’s still quite a long time to go, right. We’ve got through to end of June next year. The answer is yes, and New Zealand Transport Authority’s planned and budgeted for all of those things. So, yes, they can expend money.

Just working backwards a bit, there’s no legal status of this statement. Formally, we have to consult on a GPS in advance of 1 July, 2027, and the intention is to do that. The real question is: when do you do that? We could have gone out and done it now, but there are a couple of challenges with that—in fact, multiple challenges. Number one: you’ve got the ongoing uncertainty with the fuel situation, so that’s a challenge and makes it difficult to plan. I accept that that may still not be quite as good next year, but we are where we are. Number two: you’ve got the election in the middle of all of that, and the election campaign—it’s just a complication, from a sequencing point of view, and there’s nothing you can do about that; it is what it is. The third thing is that we’ve just started this Infrastructure Commission deep dive into transport funding costs, and I’m keen to get the lessons of that from quarter one next, because we’re given until quarter one next year to do it. So I’m keen to get the lessons of that so that we can adopt some of those recommendations when it comes to the Government policy statement (GPS). Finally, there is also the land transport reform work that we’re starting to get under way now, and I want some of the early insights into that work to help inform the GPS next year as well.

So, to be honest, we kind of weighed it up. It is not an easy decision, but we think it’s the right decision. In the meantime, I wanted to give a clear steer to the regional land transport committees and councils around what they should be thinking about for the next GPS. It hasn’t got a huge amount of attention, but it’s actually worth people reading it, because the system is under stress, as we’ve just been discussing. The paper notes that, and the next GPS will focus on value for money and cost discipline; making better use of the existing network; committing to service and system capacity increases before new infrastructure; maintenance, operations, and renewals; stronger asset management and better information on asset condition; resilience, which I know many members of the House regard as a significant issue, particularly in parts of regional and rural New Zealand, but not just there; transit-oriented development, which has a specific mention in the new draft GPS; supporting housing growth through alignment with spatial plans and concentrating development around transit nodes, key corridors, and strategic connection, and I think I’d be right in saying that’s never appeared in a GPS ever before, but it’s part of this Government’s drive to align land-use plan, through the new planning system, with transport plans made through the Land Transport Management Act and via the New Zealand Transport Agency; and then, of course, safety, which continues to be important as well.

So there’s quite a bit in this document. We’ve sent it out to councils, I think—have we sent it out? People are looking at me quizzically—hopefully, we have. We will have sent it out to councils so people are aware of it; it was only last week and there was quite a bit happening last week, as we all know. So that’s gone out. It doesn’t have any legal status but it will guide the next draft GPS. If we are fortunate enough to be re-elected, then the intention will be to get on with that soon after the election.

Thank you, Mr Chair, and thanks to the Minister for his comments. I had some really specific questions about the guidance that’s gone out—I mean, to the extent that he is able to comment on what might be possible under the next Government policy statement (GPS). Under the most recent GPS, there was a lot of constraint on activity classes and what they could be used for, and there was an explicit banning of a multimodal approach being funded from the State highways activity class or the local roads activity class and maintenance and renewals.

As part of the getting better value for money and getting outcomes we want in urban centres, does he think it will be possible for funding for maintenance and renewals of local roads to go towards improvements for pedestrian and cycle access or safety? That is one way that we can make better use of our existing infrastructure, by enabling more people to use a given amount of road width, and doing it as part of everyday maintenance and renewals is a lot more cost-effective for councils.

I’m not going to get ahead of the development of the Government policy statement. Cabinet’s yet to make decisions on that; you’ll have to wait until, hopefully, next year.

OK, fair enough. But, like, the point about enabling a better and more flexible use of funding to deliver on transport outcomes—is that something that councils could be thinking about now, or not really?

I’d just refer the member to the statement. There’s quite a lot in that, to be honest. It’s quite detailed and it’s not just high-level motherhood and apple pie; there’s quite a lot of stuff in there for councils to think about.

The other point I’d make—and I don’t want to speak for too long, because I’d use up all the other Ministers’ time for the other portfolios—I mean, let’s be honest about it: the Government policy statement system settings are suboptimal. We provide these activity classes, there are funding ranges, and there’s a whole suite of problems with that, and that’s partly why we’re doing the land transport reform work. We’re at the start of that process, to have a look at whether there’s a better way. That is a modern artefact in the sense that it was only created in 2008 onwards, actually—it was only 18 years or so ago, so things can change—it’s not the way transport funding used to work before that; it was a completely different system and now is probably not the time to get into that.

We just want to have a good look at that system, because I think everybody would be a bit frustrated—councils, too, by the way; I mean, the fact is that the three-year cycle is part of the problem, right? Theoretically, they’re 10 years, but they’re actually not: people focus on the three-year window. I meet councils up and down the country every day, and the member will have met them when she was Associate Minister as well. And they say, “Oh, you know, we can’t plan because we keep being told it’s the 2027-30 period or the three years after that, but we don’t know if there’s any certainty of the funding, so do we do the work now or not?” It’s a nightmare of a situation, and people spend their lives creating regional land transport plans, which would require extensive consultation. By the time we’ve actually finalised the land transport plan and the New Zealand Transport Agency’s come in with the co-funding, we’ve got to start again on the next one. It’s no wonder people get demented by this stuff; I mean, I get driven demented by it and I’m a Minister.

Anyway, there’s got to be a better way, is the short point—slap a hashtag on it. I think we can do it, and I look forward to the member’s support.

I wanted to come to the topic of the appropriation that was not explicit in how much it was to assist public transport operators with higher diesel costs, and I just wanted to know if at some point it will be reported to Parliament how much has been allocated and to which public transport authorities, and what is the process for public transport authorities to apply for this funding. We’ve heard from different operators that they’ve had much, much higher costs, like just the ferries in Wellington, for example—you know, there’s an electric ferry, there’s also diesel ferries, and they were copping higher costs of, like, a million dollars a month earlier in the year, and obviously they don’t want to have to put up fares, because that will reduce patronage—it’s the same with the regional council. So I was just wondering what the process is.

If the member puts these questions to me in written questions, we can probably come back to it. These are operational matters for the transport agency. The amount is commercially sensitive to allow for negotiations. If there is money used, then it will eventually be reported to Parliament, obviously, in due course. But the member will have to put the questions down in writing, to the exact specifics. The point is, there’s money there for targeted support for public transport authorities on the way through during the fuel situation.

Thank you. The Minister told us that everybody wants some funding for transport projects. There is an abundance of different transport projects, but I do want to turn our attention now to the roads of national significance. I think that’s where the gap between what the Government promised and what can actually be delivered becomes very clear.

We have a programme estimated at around $56 billion. I think the Minister himself characterised this as a “finger in the wind” figure. Parliament is now being asked to appropriate a substantial sum of money, yet the New Zealand Transport Agency has, to date, been unable to provide the committee with a project by project forecast on what will actually be spent this year.

The chair of the Transport and Infrastructure Committee alluded to the fact that both the roads of national significance and the roads of regional significance were sort of bundled together, and I have a couple of questions about that. At the same time projects are being pushed further and further into the future, and we do know that money, in the meantime, will be spent on planning. It will be spent on buying property for roads that may or may not even begin construction for several years. So can the Minister tell the committee how much of the $1.3 billion—or $1.298 billion—for major Crown investment projects is allocated to roads of national significance and how much is actually allocated to roads of regional significance.

It would be good if there was some sort of breakdown of that. Further to that, can the Minister tell us how much has already been spent on acquiring property for projects that are now in phase 3 of that pipeline. I don’t need to remind the Minister that there was a recent announcement where some of those projects were bumped down. But I’m assuming that money has already been spent. So how much has been spent for those projects that are now in phase 3, and what happens to the property if those projects don’t end up proceeding?

Thank you, Mr Chair. Well, there’s quite a bit there. The major transport projects pipeline, which the Government published—well, the New Zealand Transport Authority (NZTA) published it—a couple of months ago is an attempt to actually spell out for the public and the sector what the sequence in the pipeline is, and that’s what’s actually been widely welcomed by the transport sector and the infrastructure sector, because it gives a sense of when things will happen.

It’s not locked down to X year or X month or anything like that, but it’s a sequence, and we’ve always viewed the major transport projects pipeline as not just about roads of national significance—by the way, there’s the North West Rapid Transit project in there, there’s the Eastern Busway and other projects, very important projects—as a sequence and I think people kind of know intuitively that you can’t build 17 roads all at the same time. Not only could you not do it, you couldn’t fund it and you’d destroy the market and inflation would go through the roof and all the rest of it. There has to be a sequence, and so that is the sequence, and the honest truth is that some projects are more ready to go than others and are needed earlier than others, for example, Mill Road—

Tim van de Molen: Waikato Expressway.

Hon CHRIS BISHOP: Well, the extension of the Waikato Expressway is a road that was fast-tracked by the previous Government. People say it was fast-tracked; it was actually David Parker’s fast track—people forget about that. So it was fast-tracked by the previous Government for the consent—

Arena Williams: Ours was good.

Hon CHRIS BISHOP: OK, well, leaving that aside, then there was no money, and now we’ve funded it. So that’s the reality of it, and we’re going to get on with that and in fact the NZTA is in procurement for that now, for the offline and the online sections. So it’s always been a sequence. It’s always been a coherent pipeline and some projects are further away than others.

In relation to the member’s point, or question, I suppose, around property acquisition and property liability, the NZTA owns property all over the place. They own rental properties in Mount Victoria that they’ve owned since the 1970s, and that’s because of the on-again, off-again second Mount Victoria tunnel. The NZTA is a landlord all over the place through rental properties and other things. So the NZTA sits on the land and if they don’t need it, they dispose of it. Otherwise, they own the property and there’s a revenue stream often from those properties, sometimes there isn’t, and then there is obviously a property liability incurred with designations that occur as well and other sort of legal processes around that.

So what we’re doing, or what NZTA is doing, I should say, is just getting on with the job of progressing projects so as funding becomes available they are ready for construction. Some projects are further up the kind of curve of construction readiness than others, and that’s publicly available for everybody. So rather than have this kind of show and tell routine and everyone ask all these questions and that sort of stuff, it’s all publicly available. We’re not trying to hide anything here. It’s all publicly available.

Dr Tracey McLellan: Is this process such a nuisance?

Hon CHRIS BISHOP: Well, it’s publicly available and my point is that that’s a contradistinction from the past, when communities would get very excited about projects that they thought were going to happen and it turns out they weren’t because they’d been misled, frankly, often by politicians, to believe that things would start immediately when they were never going to start. Both sides of politics have been guilty of that in the past.

In relation to the major Crown investment programme, otherwise known as the New Zealand Upgrade Programme, that is actually, without being too political about it, an example of over-promising, because, as some members of the House know, that was an attempt to basically make announcements about projects that were nowhere near ready for funding. Hence why the project cost blew out massively, Otaki to north Levin being a classic. It was meant to be $817 million, from memory, and it’s now going to come out at the thick end $2 billion.

Hon Julie Anne Genter: It was actually $400 million.

Hon CHRIS BISHOP: The figure I remember—the figure when the announcement was made by Grant Robertson and Jacinda Ardern back in March 2020, I think; February it might have been—is $817 million. I thought that that was a cheap four-lane road from Otaki to north Levin, and lo and behold, it’s not based on anything other than a literally back of the envelope figure. People just estimated the costs, and then people thought the road would start. That was announced in 2020 and here we are in 2026 and it’s finally getting under way, which is great. We support the road but we’ve got to get out of this habit of just making big spending commitments and big policy promises and pretending that things will just happen without doing the work. So we’re trying to stop all that stuff.

Thank you, Mr Chair, and thank you, Minister, although I certainly do remember there being quite some fans here from the Minister and the Minister’s party.

Anyhow, the New Zealand Transport Authority (NZTA) told us through this process, and it’s mentioned in the report, that there is currently no definition of high value and high risk. But the Minister has said that Cabinet has oversight, and sufficient oversight, of high-risk and high-value projects. It might seem like a small question but it’s something that leaked out, and is of particular interest to me—if NZTA are unable to define that or have no clarity about what that definition is and yet the Minister has provided us with a sort of certainty that that’s been taken care of at a Cabinet level, I’m just wondering if the Minister can elucidate on that somewhat. If I could just go back a step, because I didn’t get a chance to ask after the general policy statement (GPS) question, the Minister talked us through the delay in the GPS and the rationale for that, I accept that. But while I have him can he also confirm whether the next GPS will direct 60 percent of that investment towards maintenance and renewals as has absolutely been suggested should happen in that national infrastructure plan, and that will just round off that section nicely for me. Thank you.

The short answer is Crown funded high-value, high-risk projects go through the Cabinet investment management system process and that assurance work that goes into that. In fact, the Government announced extensive changes to that to make it more streamlined and provide better quality assurance to Ministers. I probably don’t have time or, frankly, the energy to get into that tonight, but rest assured we are taking on board many of the criticisms of it and I’ve been intensely frustrated at the way in which the system doesn’t work, actually, in relation to assurance. So we’re making those changes.

In relation to the New Zealand Transport Authority’s processes, they have the National Land Transport Fund, obviously, and board has operational authority to make decisions in relation to that. But for high-value, high-risk projects, they can also go through the investment management system assurance process as well. To give you an example, there is the Northland Expressway, a road of national significance that just got announced for stage 1 and has gone through extensive gateway processes as well. So the short answer is that it depends.

I just want to ask a couple of questions about maintenance and local roads in particular, and I suppose that sort of cost shift for councils. We touched earlier on the fact that councils can often get left with those unfunded mandates to do various bits and pieces. Certainly, from my perspective, while the Government has been talking about fixing potholes and getting transport back to basics, the evidence from NZTA to the committee tells quite a different story. They warned that councils would be struggling to meet what is their share of the maintenance cost and could end up restricting the use of bridges. They could end up using cheaper materials or finding other ways to reduce what is then their maintenance responsibilities. And at the same time, only $600 million of a $3.2 billion road maintenance target has been actually directed towards local roads, despite, obviously, the fact that local roads make up the overwhelming majority of the network. I understand that that doesn’t necessarily mean that’s where the overwhelming majority of people are using a road at any one point in time, but that is the nature of the network. On top of that, the Government intends to transfer six special purpose roads to local authorities.

With the future funding, I think that the split on what that future funding might look like is still unresolved, and so I suppose my question to the Minister is: NZTA told the committee that the current funding settings could lead councils to restrict the use of bridges and to use cheaper sorts of materials, so has the Minister had those conversations, does he accept that NZTA assessment, and, if so, has any thought gone into what he might do about it?

With regard to that $3.2 billion fund that I mentioned, can he explain or walk us through why only $600 million of that fund goes to local roads, given that they do make up the overwhelming majority of New Zealand’s road network?

Well, in relation to the special purpose roads: those are matters for the transport agency and they’ll be considering that. In relation to local roads, I mean, it’s like everything. As we’ve talked about for 40 minutes now, there’s never enough money for everything. Local roads are very important. It’s co-funded through the transport agency and local councils via rates. Often, to be honest, one of the challenges is that councils are allocated money which they don’t spend, and I get perennially frustrated when I see the reports of councils that have had money allocated to them for local projects that they fart around not progressing. That’s intensely frustrating because, at the same time the council is complaining about being underfunded, not having resources, often there’s money there and they don’t spend it. It’s sort of like “Don’t come and complain when you can’t even spend the money that’s been allocated.”

Now, in their defence, I partly understand the three-year NZTA - GPS - NLTP - RLTP acronym soup process which has gone through all of that. It’s not entirely their fault, but often it is, and I encourage them to get on with it. Part of the issue, to be honest, just while I’ve got my talking stick, is the convoluted planning processes we make councils go through. They’re often very, very simple projects, and, you know, people are waiting around for six or nine months before they can spend the money because they’ve got to do a consent and go and get a permission for doing that, and they’ve got to do a local business case for a very small project. I mean, I get very, very frustrated by all this stuff, and so the Resource Management Act reform will help with that. Culture change inside councils would help too, frankly. The point is that the local roads are the backbone of the network. We’re going to continue to invest in local roads, and, in the same way, we’re going to continue to look after the State highway network, which is very important maintenance and operations of that.

I note that today the notice of requirement designation was lifted for the East-West Link. I thought I’d share with the Minister that on the weekend I was doorknocking in my electorate in Hātaitai, and a number of people raised concerns about the proposed Mount Victoria Tunnel changes and how they would adversely impact residents in Hātaitai and Kilbirnie. Given that there’s no way there’s going to be funding for the Mount Victoria Tunnel any time in the next decade or two, what should I say to those constituents? They kind of can’t move on with their lives. They’re not going to have their land taken by the New Zealand Transport Agency (NZTA), but, presumably, NZTA is going to go ahead and acquire some of the adjacent properties, which is going to leave them with no neighbours, no neighbourhood, and just living with this kind of uncertainty of maybe. You know, people can’t just move on and make our community better because there’s this fantasy project, as the Minister’s referred to. It’s a fantasy project that has no funding and will have no funding. Why won’t the Government consider doing the same thing it’s just done with the East-West Link, after 10 years, allowing other people to move on with the land development and move on and do other things with that area?

It’s not a fantasy project, and the member’s wrong when she says there’s no funding for it for 10 years. It’s not correct and I don’t know where she gets that idea from—it’s not correct. She’s the local MP for Hātaitai; I’m not, so what she says to those residents is over to her. But it is a very important project for Wellington, for the reasons that have been well-traversed by her and I many, many, many times. In fact, the New Zealand Transport Agency has just lodged a fast-track application for it, I think yesterday or earlier this week.

Hon Julie Anne Genter: Yeah, but it’s not funded.

Hon CHRIS BISHOP: Sure.

Hon Julie Anne Genter: You don’t have $4 billion.

Hon CHRIS BISHOP: Sure—sure. It’s not funded.

Hon Julie Anne Genter: The benefit-cost ratio (BCR) is 0.7.

Hon CHRIS BISHOP: Lots of projects aren’t funded. The Auckland Light Rail fantasy project that you were in support of was not funded. There’s lots of stuff—

Hon Julie Anne Genter: Exactly, it’s a fantasy project.

Hon CHRIS BISHOP: Well, there’s lots of stuff—

Hon Julie Anne Genter: You just admitted it.

Hon CHRIS BISHOP: Lots of things aren’t.

CHAIRPERSON (Greg O'Connor): Just for the advantage of the people living at home, it’s much easier if you stand up and seek the call, ask the question, and then we’ll get our—

Hon CHRIS BISHOP: Lots of projects aren’t funded—lots of projects aren’t funded. Partly what we’re trying to do is create a sequence pipeline, which is exactly what the experts say you need to do when it comes to infrastructure projects. As they become ready for funding and they’re ready for construction funding, you fund them. That’s part of the sequence pipeline. The member can see it, publicly available, for herself.

According to the list that the Minister put out, this project isn’t going to start for at least 10 years. We all know, as they’ve said, there’s no money in there. The money has to be prioritised to projects that make the best use of our limited transport funding. So I guess, I would put to him, on behalf of the residents of Hātaitai and Kilbirnie, that it would be much better if the $100 or $200 million the Government’s currently putting towards this project was put towards improving public transport right now, not acquiring land and having this shadow hang over neighbourhoods of some four-lane road, which is probably not ever going to be affordable or makes sense.

In the most recent thing that was sent to me, released under the Official Information Act—and I’ll be happy to table that—it says that the BCR is less than one; it’s 0.7. It’s clearly one of the lowest priority of the roads of national significance; there’s no funding available for it, and it’s limiting the ability of the community to move forward with far more cost effective improvements to our transport system.

Yeah, I mean, all I can do is repeat what I just said, which is lodging for fast track—yep, there’s some money involved in that, but we think that’s a valuable or justifiable use of money. The project is not funded at the moment. Three-point—

Tamatha Paul: Just let it go! Nobody wants it.

Hon CHRIS BISHOP: You sound like—who’s the—

Hon Member: Elsa.

Hon CHRIS BISHOP: You sound like Elsa.

Tamatha Paul: [Sings] Let it go!

Hon CHRIS BISHOP: You sound like my son. He’s constantly singing “Let It Go”.

Anyhoo, it’s an important project; it’s not funded at the moment. By the way, it’s not just $4 billion for Mount Victoria. There four elements of that project: there’s the basin, there’s The Terrace, there’s Mount Victoria, there’s Te Aro improvements through State Highway 1—it’s a complicated project. You know, we should have got on with it years ago, but here we are. I believe it will get built. The member’s welcome to continue to campaign against it. I look forward to having long battles on the campaign trail about it in the future.

Thank you, Mr Chair. I want to move on to some public transport questions, mainly because it’s always striking how little attention it has received over the last few years. Whilst I appreciate the Minister’s previous answer about council not necessarily always—how the frustrated he can be when councils don’t spend the money. It just reminds me of the incredible influence that a Government policy statement (GPS) can have and how important it is not to, necessarily, be delayed, because the GPS does seem to particularly send the signal to those councils. The Minister will well remember what negative impacts can happen when a GPS doesn’t signal, for instance, public transport, and councils don’t necessarily, then, go pursue work programmes on the misunderstanding that the Minister du jour doesn’t favour it and money gets rescinded.

Anyhow, I’m still banging on about how Christchurch lost $78 million, obviously. But this time round I will move on and note that public transport—well, that councils—nevertheless, often, find themselves having to fund new costs.

Since July 2025, public transport authorities required, for instance, just as an example, to purchase zero-emission buses when they replace their fleets, and yet central government has provided no specific support towards that additional capital cost or for them to just simply meet those requirements. The Government mandates that public transport authorities make those purchases, so my question to the Minister is, is he aware how much that mandate has added to councils’ capital costs since July 2025? That’s a start—if he could answer that, that would be much appreciated, and his answer to that will guide my next question.

I’m advised that the bus mandate was a previous Government policy that we decided to keep. The Opposition regularly likes to—

Dr Tracey McLellan: It’s a good policy—where’s the pūtea?

Hon CHRIS BISHOP: Well, the Opposition regularly likes to say that we tore up climate policies. It’s true in relation to some policies, but it’s not true in relation to this one. I’m also advised that there is no extra cost because the whole-of-life costs of buying an electric bus are cheaper than buying a diesel bus.

Thank you, Mr Chair. I just want to get some clarification, because it was more than $78 million that Christchurch lost; it was over $800 million, and part of that was the $800 million that was on the draft Government Policy Statement for land transport for mass rapid transit (MRT). We’re just wondering how that disappeared and whether it is a priority commitment of this Government to reinstate for MRT for greater Christchurch?

The other question I do have quickly is around the Woodend Bypass. I noticed the member of Parliament for the electorate has just recently that it’s great to see that work is under way on the Woodend Bypass. I’d just like to check whether that is actually a correct statement?

Taking them in reverse order: yes, work is under way, but it’s not construction work—as in, it’s not the main construction work. But there is work happening down there, obviously. The member can see it for himself.

In relation to mass rapid transit for Christchurch: there’s never been $800 million for mass rapid transit in Christchurch. I’m advised that was the overall cost of the project if it happened.

Mike Davidson: It was on the draft.

Hon CHRIS BISHOP: Well, there was no money for it; that was just the estimated cost—not funded or anything like that. It’s not worth going back through the potted saga of the money that was for the business case. It was a very expensive business case by the way, which is potentially why the council gave it up. It’s now funding Brougham Street, which I’m sure the member is very happy about—or partly funding Brougham Street.

Look, I’m actually conceptually interested in rapid transit in Christchurch, but here’s the point: there’s very little point in standing up and saying “Well, let’s build trams and light rail in Christchurch”. Let’s do the work. Let’s do a spatial plan for Christchurch and the surrounding area; let’s think about, over the next 20 to 30 years, what we’re going to build and where we’re going to build it; let’s think about the transport plans. Planning reform and the Resource Management Act changes we’re making will allow for all of that to take place in a structured way—involving the Crown, too, by the way, because that’s an important part of it. Then, let’s build up the evidence base and the case over time. Let’s get away from immediately jumping to “Wow, look at these great, stylised pictures of trams down Brougham Street or light rail cars down Dominion Road”. Let’s actually do the work before we start to make major investment decisions. There’s been too much fantasy stuff—too many fantasy-land projects, too many people interested in the AI, stylised drawings.

Shanan Halbert: You’ve changed.

Hon CHRIS BISHOP: I’ve changed? I’ve certainly got heavier in the last three years.

Dr Tracey McLellan: Roads of National Significance are what’s a fantasy.

Hon CHRIS BISHOP: Well, no—on the Roads of National Significance, no one ever promised they would all start straight away. That’s not true. We always said they were a part of the pipeline; they remain part of the pipeline—in fact, six of them are about to be or are under way. The Hawke’s Bay Expressway—I note that Katie Nimon has entered the House, and she knows all too well. You can see it. You can drive down it right now. The road widening is under way, and you can see the projects happening around the country. You can see Ōtaki happening—Ōtaki to north of Levin. Cambridge to Piarere will soon be getting under way, and the Northland Expressway, stage 1 is underway or soon to be under way as well. People can see them, but they were never all going to be built at the same time. People who say—

Shanan Halbert: You just want to do it on your terms.

Hon CHRIS BISHOP: Well, I think that’s—in relation to Northland, it was actually in the last Government’s draft Government Policy Statement (GPS) as well, by the way, which is a fact that is conveniently forgotten about by members opposite.

Shanan Halbert: Four lanes?

Hon CHRIS BISHOP: Yeah, in David Parker’s last draft GPS was stage 1 of the Northland Expressway. The previous Government said that they were interested in funding it.

Grant McCallum: As it should be.

Hon CHRIS BISHOP: Exactly. That’s my point—that it’s a good project, which is why the last Government was interested in it as well. But we’re actually getting on with it.

CHAIRPERSON (Greg O'Connor): I’ll just let members know that we’re into our last five minutes.

Just following up on my colleague’s question: $78 million for public transport futures was a package of cost-effective bus improvements that would massively increase frequency—

Hon Chris Bishop: Oh, OK—sorry.

Hon JULIE ANNE GENTER: —and practicality of buses. The Minister says that the Government is in favour of public transport and that public transport operational funding has increased, but outside of Auckland, it hasn’t, and there is a desperate need—particularly in a city like Christchurch, which is growing very quickly—to improve bus transport. It’s something that could be done in a short period of time, but there’s nothing for it in this Budget. Could the Minister find some funding for it?

Well, not at 9.26 p.m. at night on Wednesday, I’m not just going to magic up money. Nicola Willis has just called me, as it happens, while you were talking. You never know, she could have heard your exhortation. It could be good news. I don’t know if anyone’s ever been in the chair and rung another Minister on the phone—that may be a breach of Standing Orders, and almost certainly is.

The short answer is that we’ll continue to look at sensible improvements on this stuff, but I’m not going to make any funding commitments on the floor of the House.

CHAIRPERSON (Greg O'Connor): We’re running so close to the edge of Standing Orders that I’m not about to interfere at the moment.

Thank you, Mr Chair—and I know that we’ve only got a very short amount of time left. The cost of replacing 22 State highway bridged rises from around $110 million in this National Land Transport Programme period to between $300 million and $400 million in the next. Can the Minister tell the committee the total deferred bridge replacement liability across both State highways and local roads? Essentially, things are more expensive if they’re delayed. There are a lot of things that have been pushed into phase—there’s a lot of things being pushed around. If the Minister can just give us a little bit more detail on that, that would be amazing.

The short point is that the $110 million is for nine bridges that are needed to be done now, and there will be further work and further funding required as we move on. We do have an end-of-life bridge issue, but it’s also important not to catastrophise it. Some of the bridges are very old, there is no doubt about that, but they also have economic life left in them.

While the member is of course correct to say that things only get more expensive—that is true—respectfully, that’s also not an argument for funding the update of things or the replacement until they are required. That is also expensive, because it comes with trade-offs around the best value use of dollars. It is obviously true that it’s cheaper to do things now, but that would be an argument for doing everything right now. We don’t; we phase and sequence things out.

The New Zealand Transport Agency (NZTA) is just getting on with the job of the end-of-life bridges that are right around the country. Some are more complicated than others. The $110 million is for the nine needed now. We’re getting on with them. There will be further work and further funding required. Maintaining the State highway network and the end-of-life bridges on it and just progressively chunking them off over time is really important. I think it’s important not to catastrophise the problem. It’s a challenge, but we’ve got the money there to do it, and NZTA is actually getting pretty good at doing them in a very standardised, sensible way.

Thank you, Mr Chair. Some very quick questions—

CHAIRPERSON (Greg O'Connor): They will need to be.

SHANAN HALBERT: —because we have already talked about the additional Waitematā Harbour crossing. Questions for the Minister: what are the expected costs related to the detailed business plan, and what are the anticipated costs to reopen the option from Meola Reef to Kauri Point in his projections, and where abouts is that funding sitting?

Cabinet has capped the Meola option at $1 million—50 percent from the Crown and 50 percent from the council if they choose to take up that invitation. But we’re not spending more than a million; it will come Ministry for Cities, Environment, Regions and Transport (MCERT) baselines.

In relation to the detailed business case, I don’t have those figures to hand. If the member puts it down in writing, we can have a look at that. There will be a cost in relation to the detailed business case. A lot of it will be funding through the MCERT and New Zealand Transport Agency standard operational funding. If there needs to be more, we will consider that in due course.

CHAIRPERSON (Greg O'Connor): Members, the Minister’s time in the chair has come to an end. We now have the Minister for Tertiary Education. The Minister is available to speak to that portfolio until 10 p.m.

Committee of the whole House—Estimates Debate

Tertiary Education