Debate on Crown Entities, Public Organisations, and State Enterprises — New Zealand Transport Agency

I am very happy to take this very quick call to discuss the financial performance of the New Zealand Transport Agency. This is an agency that was a client of mine for many years, when I was a transport consultant. I had the privilege of working on a number of research projects for the New Zealand Transport Agency.

I am happy to say that there are some very hard-working and talented people working there, but I would really like to raise a number of concerns. There is a problem with a lack of transparency about what the New Zealand Transport Agency is doing. As I understand it, it is probably mostly around the massive, expensive motorway projects that the Government is prioritising—the so-called roads of national significance. When we try to find out information about these projects, the Transport Agency is very unwilling to share information, like, for example, the updated costs and benefits for them. I asked the Minister of Transport some written questions recently, and, unfortunately, he was not able to return them on time. And even when he did return them, we saw that there were increased costs, for example, for the Wellington Northern Corridor road of national significance. That was initially estimated to be $2.1 billion to $2.4 billion, and is now revised to $2.4 billion to $2.7 billion. There has been no update to the benefit-cost ratio. As far as I can tell, there has been no update to the benefits so, necessarily, that project would have an even worse benefit-cost ratio than what it had before, which was only over 1 because of some very creative accounting.

I have heard from inside the organisation that there is a very machiavellian approach to project management and to public relations. They have a very proactive approach of identifying the stakeholders who are asking for information and then deciding to give information to certain stakeholders based on whether they think there is any sort of risk that there would be a media story.

I think that it is clear from the Cabinet papers that the agency is facing a very tight funding situation. We have asked the agency about this in the financial review, and it sort of wanted to sweep it under the rug, saying: “Oh no, there’s no problem here, there’s no problem with funding.” But actually there is significantly less money coming in, and that is totally understandable. We foresaw this in 2008, when we did the research report Managing transport challenges when oil prices rise. We said what was going to happen was that as oil prices rise, households, which do not have any opportunity to switch to other modes, because we had not sufficiently invested in them, would have to spend more money on transport. In the first instance, they would cut some of their discretionary trips, and, in the second instance, they would have less money to spend on goods in New Zealand, in the economy. What happens after that is that 6 months later we see this beautiful lag, and suddenly there is a reduction in demand for heavy vehicles, because the freight industry takes a hit when households have to spend more money on petrol, so then there is less demand for freight. What happens is that there is reduced demand for vehicle trips on the State highway, there is less money coming in through road-user charges and petrol taxes, and, therefore, there is less money to spend. But, unfortunately, the Government is still going ahead with these road projects of supposedly national significance.

What we have been trying to find out from both the New Zealand Transport Agency and the Government is where the evidence is that these projects will have the desired positive impact on the economy. We are not ideologically opposed to roads or vehicle-based transport, but we are asking why we should spend 75 percent of the money for new infrastructure on six very expensive projects when there might be more cost-effective ways to reduce travel times and to meet the needs for travel that the New Zealand Transport Agency is tasked with. We have heard in the House from the Minister of Finance, the Hon Bill English, that, in fact, there is no evidence, that these are actually political projects.

It is a very big problem because I think that New Zealanders expect to be able to get information to be able to participate in the assessment of these projects. And we cannot have proper scrutiny in the public sphere, or in Parliament, if the New Zealand Transport Agency is operating behind this cloak of secrecy and trying not to tell us any information because it does not support the narrative that the Government wants to tell, which is that it is investing in productive infrastructure. We just want to help out, really. The Green Party is interested in making intelligent choices in terms of how we invest in transport infrastructure, and to do that we really need to understand why these projects are being prioritised as opposed to other projects. Also, when we try to question the New Zealand Transport Agency on its—[Bell rung] I will wrap this up right this second—

You have wrapped up. Your time has expired—your time has expired. Please sit.

Report noted.

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