Annual Review Debate — Economic Development and Infrastructure Sector

Thank you, Madam Chair. It’s a great delight as chair of the Economic Development, Science and Innovation Committee to start off this debate and to look at, essentially, what our committee did in its review of the Government departments and entities that came before us.

The process of annual reviews is an important one, where, in a public setting, before the elected representatives of the people of New Zealand, we require and receive validation and reporting on the taxpayer funding that different Government departments and entities have received. Can I say thank you to all of those entities for the supply of information as requested, for appearing before the committee, and responding to further questions sent to you.

For the financial year 1 July 2017 to 30 June 2018, the committee requested the following entities to appear before us, and it is quite an extensive list: AgResearch, Broadcasting Commission, Callaghan Innovation, the Commerce Commission, the Financial Markets Authority, Kordia, Landcare Research, MetService, NIWA, the Ministry of Business, Innovation, and Employment (MBIE), New Zealand Forest Research, New Zealand Post, New Zealand Institute for Plant and Food Research, New Zealand Productivity Commission, New Zealand Tourism Board, New Zealand Trade and Enterprise, New Zealand Venture Investment Fund, Radio New Zealand, Research and Education Advanced Network New Zealand, and TVNZ, plus we also joined with the Transport and Infrastructure Committee on the Electricity Authority—so quite an extensive list of agencies, representing tens of billions of dollars of taxpayer funding.

Perhaps the largest entity was the Ministry of Business, Innovation and Employment. They are a large agency with just over 4,870 employees and 47 offices, as of June 2018. Its responsibilities cover a wide range of areas, including immigration, science and innovation, communications, energy and resources, tourism, and Government procurement. The ministry aims to “grow New Zealand for all”, with a focus on economic performance through productive and sustainable use of resources. MBIE works to increase real household incomes, through more competitive businesses, increased job opportunities, and more affordable housing. Their departmental expenditure in 2017/18 was $750 million, an increase of about 8 percent from the previous year. Their total revenue was $756 million—just slightly above that. They had a net surplus of $6 million. In addition to its own spending, the ministry administers a large amount of non-departmental expenditure as well. This totalled $3.814 billion. So, indeed, quite a substantial amount of money. This money was administered on behalf of Ministers for services provided by Crown entities and research facilities.

In 2017/18, the ministry set up the Provincial Development Unit (PDU) to manage the design, administration, and monitoring of the Provincial Growth Fund. In 2018, they allocated $3 billion over three years to the Provincial Growth Fund. In the committee, when we questioned them, there was concern about the transparency and the operation of the PDU, and we were assured that information would be put up on the website, and that project is well under way.

One of their objectives is, of course, also housing affordability and quality. MBIE has a target to increase real household incomes by 40 percent by 2025. In support of this, one of the ministry’s objectives is to lower the ratio of housing cost to incomes. In 2017/18, the ministry supported a range of initiatives to improve the supply and affordability of homes, focusing on improving conditions for rental properties, etc. But we also noted that a new ministry, the Ministry of Housing and Urban Development, on 1 October 2018 superseded them, and so we were able to ask them, in terms of that point in time, what their goals and achievements were.

No doubt a number of members of the committee will report on different aspects of this work, but I’d like to say thank you very much to the staff and to those people who have come in and reported to our committee. Thank you.

Thank you, Madam Chair. It’s a pleasure to rise. I’d like to start off by complimenting the chair, who actually just sat down. Jonathan Young is a very able chair and he has actually given us a rundown on some of the issues that the Economic Development, Science and Innovation Committee has actually worked through in the last financial year. There were many. I think the Economic Development, Science and Innovation Committee probably does more annual reviews than any other select committee in this House, and I’d like to actually thank all of the members from right across the House who do great work together. We debate, but we actually work well together as a select committee.

I’d like to traverse, maybe, some of the issues related to the particular portfolio responsibilities that I have in broadcasting, communications, and digital media on this particular debate. Because of my responsibilities, one of the biggest, I guess, interests that I’ve had over the last couple of years of this Labour-led Government was the issue in relation to Radio New Zealand in terms of Labour’s desire to potentially turn Radio New Zealand into a television channel, calling it RNZ+, and their promise to actually deliver in excess of $38 million a year for the next four years. That was their election promise, but the delivery never actually happened.

Considering that this is actually a debate, I thought that 2019 was the year of delivery, and I have to sort of wonder where the delivery, the action, has actually gone. It is definitely not a year of delivery for this Government, and they haven’t actually so far delivered anything. But I have to actually compliment the Minister the Hon Kris Faafoi, who, I have to say, does a wonderful job for the portfolio that he was given. I say make him a Cabinet Minister—he’s so much better than the previous one.

I guess Radio New Zealand has had a challenging year.

CHAIRPERSON (Hon Anne Tolley): I’m sorry to interrupt the member, but Radio New Zealand comes under a later debate.

Economic development?

CHAIRPERSON (Hon Anne Tolley): It comes under Māori, Other Populations and Cultural Sector according to this list. Radio New Zealand comes—

Oh well. I will repeat that debate next time around. Do I get three minutes back?

CHAIRPERSON (Hon Anne Tolley): Oh, I beg your pardon. It’s listed there—no, I’m sorry. It’s listed there, but it does actually refer it back to economic development. Continue on. I’m sorry—my mistake.

So I can actually talk about it?

CHAIRPERSON (Hon Anne Tolley): You can—my mistake.

Thank you, Madam Chair. I guess one of the difficult tasks that Radio New Zealand has had is that it’s been rather controversial, having had previous chairs and a very able CEO turn up to select committee having to explain the issues of non-transparency, and having a new Minister tasked with the job of cleaning up the process. I guess the controversy of losing their head of news as well has been rather difficult, but having said that, I think Radio New Zealand does a good job. Any criticism I have of Radio New Zealand is probably in terms of the issue that they had with the last Minister, and I think they do try and do their very best in producing quality programmes and the diversity that this nation actually requires. I commend them for the work that they do.

In terms of other entities that we have actually reviewed, I mean, most of them do a grand job. One of the concerns that I’ve actually just recently had was in relation to MetService, who have appeared before our select committee, where time and time again, under question, I tried to ask questions in relation to how MetService would react to the roll-out of 5G in this country, and they weren’t actually able to produce the answer. The CEO and the chairperson could not actually answer.

I am appalled to actually see an article in the newspaper where they have now commented saying that 5G may interfere in the prediction of the weather forecasts. I am surprised at this article because they must have had that information when they appeared before our select committee. I have today written to the select committee chair, hoping that we may be able to recall MetService to actually answer some of the questions that I have of them in regards to this particular article that I hold in my hand.

Overall, the entities that have actually appeared before select committee were asked very pertinent questions, and they were very able in their answers.

Thank you, Madam Chair. It gives me great pleasure to stand on behalf of New Zealand First to talk in today’s debate on economic development, science and innovation—a very large portfolio, under which we had a lot of annual reviews. I’d like to take this opportunity to say what a wonderful job Jonathan Young does in chairing the Economic Development, Science and Innovation Committee. Our committee works very, very collegially together. We have good, robust, solid discussions throughout. We don’t always agree—sometimes we leave with the agreeing to disagree ideology—but all in all, we do come to a good place most days.

I’d like to just go back to where this coalition Government started off from, which was the idea about giving this Government, and making sure that we gave capitalism, a human face. In order to do that, we had to look at the way that we were building our economy, which is to start building our economy from the bottom up. To build our economy from the bottom up requires making sure that our most vulnerable, most uneducated, most unskilled workforce are being looked after. So to that end, increasing the minimum wage, heading towards a living wage, was a very, very vital part of that drive and motivation for this Government.

Now, we have seen in real terms the largest increase in the minimum wage that this country has ever seen, taking the minimum wage to $17.70—up by $1.20—as of 1 April, which is a considerable lift for those most vulnerable workers. I think the previous Government—it speaks for itself where they missed out, with a trickle-down sort of economic policy that really didn’t look after those workers. We’ve certainly put this country, and this Government is putting our people, first to make sure that they are being looked after.

Also on 1 April, we took away secondary tax to assist with those workers earning very low or modest to low incomes, to assist with their needs. That was a vital part, again, to show that those people that are out there putting in a full day’s work deserve a fair day’s pay for their contribution to the community to look after their families. So those are two things that I look around and I’d like to raise everybody’s attention to.

But also we needed to raise productivity, and that becomes a bit more of a conundrum. Raising wages is a very important part. Wages are essential, but productivity to ensure that businesses’ profitability can grow and be maintained so they can employ people is a big part of it. With that came the billion-dollar R & D tax credits to actually increase R & D spending in New Zealand—up to 2 percent, I think, by 2028 is the goal. We’re well and truly on the right track for that. Just prior to the 1 April announcement of the R & D tax credits kicking in—the $1 billion over four years tax credits kicking in—actually we were at 1.37 percent. Even without the $1 billion R & D tax credits, which kicked in on 1 April, that 1.37 percent, as I said, is there, and we’re looking at growing that exponentially. Now, that’s going to open up new opportunities to grow and develop intellectual property rights, added value exports to the market place, and raise GDP per capita, individual persons’ per capita wealth in this country—another great way that we can actually assist in building our economy from the bottom up.

We’ve got the second lowest unemployment that this country has seen in the last 10 years, currently at 4.2 percent, but we still acknowledge the work that needs to be implemented to ensure that those workers can actually get back into the workplace—to use a coined term, “To get the nephs off the couch”. I was speaking, just yesterday, to the Hospitality Association of New Zealand and that group of people are struggling to find workers. I know we’ve got people that haven’t got work at the moment, and we need to get them fit and ready for work to give them gainful employment. There’s no more personal mana and respect that you can give yourself than to give yourself the opportunity to get out and work for yourself and for your family to get ahead. This Government is doing everything that it possibly can—

💬 Hon Shane Jones: Mana in Mahi.

—the Mana in Mahi ideology—getting people that have served prison time, to get out, to actually learn the skills that they need so that they can actually contribute to society. So this Government—and New Zealand First being part of this Government—is very, very proud to see that we’re heading in the right direction and ensuring that our economy is building itself from the bottom up and giving capitalism a human face. Thank you Madam Chair.

Just before I call the next speaker, can I just refer—I know we only do this once a year—members to the Speakers’ Rulings 131/1 to 5, which is the conduct of debate. In particular 131/3, “At some point members must make reference to the period of expenditure under review or one of the select committee reports”. So it’s not just a general speech that you’re giving about how wonderful the Government is or the select committee is, etc. We do actually want some reference to that period of expenditure under review.

Thank you, Madam Chair, for the chance to make a contribution in this annual review debate. I want to thank the chair and the members of the Transport and Infrastructure Committee and make some comments about transport policy over the year in question.

The two big tasks of our transport policy and the various transport agencies that were subject to the annual review at committee: first, cleaning up the mess that was left to us by the transport policy of the last Government, and tackling some of the long-entrenched, difficult issues that this Government has inherited. I’ll give the members a case in point: the New Zealand Transport Agency (NZTA), which is the largest of our transport agencies—its mandate was maintaining a land transport system that is effective, safe, and in the public interest. Well, in the year in question the board of the NZTA uncovered the fact that the agency had failed to carry out its regulatory responsibilities to the standard that New Zealanders expect. NZTA was failing in its duty to properly check the companies, and the individuals that certify vehicles as being safe for the road. When problems with these companies were identified there was often no follow up.

Now, public safety has to be paramount. The conduct of the agency, in this regard, was unacceptable and it’s clear from the work that’s been done by Meredith Connell—the law firm that was brought in by the board of NZTA to fix up this mess that we inherited—that the agency, for a number of years, has been treating the people and the companies that it is regulating as their customers. Well, they are not their customers. Their customers are the travelling public of New Zealand—they deserve to be able to use our roads, and our rail, and our public transport systems in the knowledge that the transport system is being kept safe by the regulator.

This systemic failure, in my view, was partly a result of a reduced focus on the agency’s regulatory role over the last decade. It’s clear that staff were redeployed away from regulation; that there was an emphasis on education and encouragement, instead of enforcement. The former Government was asleep at the wheel while this went on for years. Well, we have turned this around: 850 files of regulatory lapses that had been left unattended have now been dealt with. The agency put in place Kristy McDonald, a QC, to investigate the Dargaville Diesel case, which was one of the most egregious cases, and an independent review by the Ministry of Transport is due to hand down its report shortly.

I want to turn to the Ministry of Transport, who, over the last 12 months, have undergone an enormous organisational change as they gear up to deliver the new policy direction contained in this Government’s Government Policy Statement on Land Transport, in which we signalled a shift in focus towards three things: we made safety the number one priority for the Government, right across the entire transport system. Secondly, a shift towards prioritising public transport in our cities; we’ve moved away from a policy that saw the last Government invest 40 percent of the transport budget in a handful of urban motorway projects that carried 4 percent—4 percent—of the journeys. Well, we are investing right across the entire transport system in safety and, in our cities, the priority is to build modern public transport systems that reduce congestion and car dependency, and give people genuine choices about how they get around.

In terms of safety, the number of road deaths blew out between 2013 and 2017 by 55 percent, from 253 deaths to 378. That’s the equivalent of a Boeing 747 crashing every year. While that was going on, 40 percent of the transport budget was spent on a handful of urban motorway projects, while people died in huge numbers. Well, we’re committed to turning that around, and just today Associate Minister for Transport Julie Anne Genter has unveiled the first of $101 million of safety improvements on State Highway 2, north of Tauranga, as part of a $1.4 billion safety investment across 600 kilometres of our roading network.

Thank you, Madam Chair. Just keen to debate the whole question of economic development and productivity and infrastructure in this country under this Government. At the start of the period that we’re talking about, 2017, the previous National Government had a very clear economic development strategy; it was outlined in the Business Growth Agenda, and that asked the basic question, “Well, what do New Zealand businesses need access to in order to grow, in order to hire New Zealanders, to pay them higher wages, in order to grow the productivity of this country, so that we could all enjoy a higher standard of living?”

We broke that challenge down into six areas: we need access to quality investment in order to, you know—you only get jobs if somebody invests some money and buys a plant and starts a business. So you need policies that attract investment. Then you need good quality skills so that people can make a contribution in the workplace. You need access to natural resources, you need access to quality infrastructure, export markets so that you’ve got somewhere to send your goods—that’s why we worked so hard to bring in the free trade agreements—and a good innovation framework.

Now, when this Government came in, they threw all that out—didn’t like it because we’d come up with it—and what did they replace it with? Well, that’s when we run into troubles, because there’s no clear replacement, clear economic development plan, or economic plan for this country under this Government. I’ve asked David Parker the Economic Development Minister and he said, “Well, three things. We’re going to do an R & D tax credit”—well, yeah, OK, that’s a policy. It’s replacing the growth grants that we put through Callaghan Innovation with a tax credit. OK, that’s one. The second one was that there’s going to be a massive shift in the way taxation was done to move away from speculation in housing. I think that was the capital gains tax, but they dropped that last month. So that second one’s gone. The third one was the Provincial Growth Fund under Shane Jones, where they’d spend $3 billion in order to create lots of jobs—tens of thousands of jobs, the Minister told us. Then, when we actually dug into it, we found 54, and 118 bureaucrats. So there’s been a lot of money spent there, and not many jobs created. The Minister comes up with all sorts of figures, and let’s see how they are demonstrated over the next little while.

But the point I’d make is that under National, the country was delivering 10,000 new jobs every month for the last two years—10,000 new jobs every month. So far, with the $3 billion spent, I think we’re around somewhere between 20 and 50 new jobs created in the last three months across the whole country. We lost 4,000 jobs; so we didn’t create 10,000 new jobs, we lost 4,000 jobs. So the jobs boom that we had under the previous Government has gone. Part of that is the confusion about what the economic policy is. So remember last August, the Prime Minister got up in front of a business audience and gave a big speech to announce the Government’s policy framework on economic development, and she announced it: it was the Business Partnership Agenda. Then, we never heard anything about it since—never once, never mentioned once more. It was a big announcement, announced with fanfare, trumpets, and totally ignored ever since. So that’s why people are confused.

When we come to infrastructure, we’ve heard from the Minister of Transport about trying to—most people think the purpose of infrastructure and transport policy should be to enable New Zealanders to get where they need to go quickly, efficiently, and safely. But that’s not what this Government is about, as he quite clearly articulated. There is absolutely no focus on reducing congestion across the transport network in New Zealand. The Minister has been brilliant at stopping things. So he stopped the East West Link, he stopped all the State highway projects that we were doing, you know, the four-lane highway north of Tauranga going up to Northland, out of Christchurch, extending up past Kāpiti. All sorts of projects he stopped, and what’s he replaced them with? Well, nothing yet—nothing. There’ve been plans about the slow tram going down the Dominion Road to the airport, but that still hasn’t emerged. We don’t know where it is. So he’s stopped a whole lot of projects, hasn’t started any new projects, and, in the meantime, if you’re stuck in the traffic on the Southern Motorway in Auckland, or trying to get out of Christchurch, well, help is not on the way, because they’re not putting any extra resources into building the roads that most people use, because they hate cars under the Greens.

So their focus is getting people out of their cars on to public transport. Well, public transport, of course, is an important part of the package; yes, you invest in it. That’s why we invested in the City Rail Link, it’s why we invested in the electrification of the rail units, and, yes, you have to have that as part of any transport policy. But if it’s completely unbalanced, such as it is under this Government, that will not enable New Zealanders to get where they want to go. In fact, their focus in transport is to make life as frustrating as possible for the motorists, and that is not going to help either New Zealanders’ quality of life, or the economic development of this country.

Thank you, Madam Chair. It’s my pleasure to take a call in this economic development and infrastructure section, specifically to talk about two reports that are occurring here: the annual review of AgResearch Ltd., and the annual review of Callaghan Innovation. I think both these reports, in many ways, speak to some of the points that the previous speaker has just raised.

This Government has a very clear economic strategy, and that is about us partnering with business to encourage innovation, productivity, and to build a skilled workforce. It is about the development of an economy that is sustainable, that is productive, and that is inclusive. These are things that we have a range of policies that we are working towards, and some of them are covered off in the reports that I’m speaking to today. Specifically, one of the key planks of what we’re trying to do, of course has been mentioned, is that, actually, we’re not just seeing economic development and productivity as something that happens in our cities; that this is a Government that for the first time in a generation is substantially investing in economic development in our regions with the Provincial Growth Fund.

We are also looking at how it is that we need to transition our economy. We know change is coming. We’ve set up the New Zealand Green Investment Fund Ltd in order to ease that transition. We’re a Government that is investing in infrastructure: $42 billion over five years—investment in core infrastructure from this Government.

But one of the other key planks of what we’re doing is an investment in research and development. Now, one of the previous speakers, the Hon Paul Goldsmith, said that the R & D tax credits were replacing the growth grants of the previous Government. That is something that is covered off in Callaghan Innovation’s report. I think this could go down as one of the understatements of the year, that growth grants were a scheme that helped around 300 businesses with their R & D needs each year.

What we as a Government, in the period that’s covered off in these reports, have done is put in the policy work, and indeed now the legislation is passed to have an R & D tax credit that will benefit 10 times that number of businesses in working alongside them to reach this Government’s aim of finally getting serious about lifting our percentage of GDP spent on R & D. At the moment, we languish way down in the OECD tables. We only spend around 1.38 percent; there’s been a slight lift, but we are way below where we need to be if we are going to be the productive, sustainable, inclusive economy that we want to produce. Well, we have an ambition to lift our expenditure on R & D to 2 percent over the two-year period.

When Callaghan Innovation came before the select committee, this is something they talked about in terms of the work they were doing in order to transition to this, and they emphasised a number of points when they appeared before the committee in terms of the work that they were doing, both with the Ministry of Business, Innovation and Employment and with organisations in terms of facilitating this switch. This is the kind of transformative measure that we need in order to realise the kind of economy and the kind of country that we want to be. We as a Government, when we talk about raising our expenditure to 2 percent of GDP, know that we won’t be doing that through public expenditure alone. What we want to do is have the right support mechanisms in place so that the private sector also increase their expenditure. One of the key indicators that we are looking to lift through this measure, the R & D tax incentive, is to raise business expenditure on R & D, because we know that this will lead to higher-paying and skilled jobs and is something that we have to make sure that we are putting in the work to do.

Likewise, we saw when AgResearch appeared before the committee that they were talking about some of the fundamental work they’re doing around the decarbonisation from biological emissions work and some of the pieces they are doing there.

So, thank you, Madam Chair. I would like to conclude by thanking the chair for this opportunity to address the House on these reports.

Thank you, Madam Chair, for this opportunity. It’s interesting the previous speaker, Megan Woods, didn’t talk about the banning of gas exploration as part of the infrastructure debate that we’re having this afternoon, because we had a number of electricity sector players come into the Transport and Infrastructure Committee. One of them was Genesis. Genesis burns coal. Coal—dirtier than the gas that the Minister has banned, but she hasn’t banned coal or the use of coal. And I’m not advocating for that. It’s a very good reason that she hasn’t banned it: because coal is very useful. It’s very cheap. It actually plays a very important role in our electricity system. It keeps the lights on, though it only produces about 2 percent of the electricity across the country. But, unfortunately, the facts are that in the next 30 years, demand for electricity will double, and now we’ve had a lot of investment in Transpower—that’s the business that we reviewed that transports, essentially, the electricity from the South Island to the North Island. We’ve had a large investment over a number of years under the previous Government, which enables that electricity to flow.

But the Minister did not address the fact that demand will double, and although we can talk about wind farms, they’re not as reliable as hydro and they’re not as reliable as gas. By banning the gas, we’re only moving the burden of emissions away from the sector as a whole, and we’ll be forced to burn more coal, because the lights have to stay on somewhere. Of course, the gas that would’ve been exported to replace someone else’s coal is no longer able to be exported. So, unfortunately, an ideological view, a stand made by the Government, which is going to end up creating more emissions across the planet and not less.

Then, of course, as I say, the demand will double in the next few years. Again, there needs to be some stronger thinking, some more forward thinking, about where that supply of electricity is going to come from. We know it’s very difficult to get new consents for hydro, for example. We know it’s difficult to use those lakes to a greater degree. We could have, for example, much lower minimum levels to make greater utilisation of the water available, but we know that’s going to be difficult. We heard in the committee that is going to be difficult to achieve as well. We also know that wind farms, though sustainable and renewable, are not the favourite form of visual pollution that some communities will put up with.

So there are issues around the long-term supply, but I must say, over the last 20 years, since I have been involved in the electricity sector, from when the Electricity Corporation of New Zealand split up—I was an employee of the first Meridian Energy—the marketplace has developed hugely. The products have become much more sophisticated. The retail market is very efficient and effective and competitive, and the customer, the consumer, is getting good value for money because of that. Of course, we’ve got all sorts of technologies on the demand side of electricity that we’ve seen as well. So as the spot price rises, people can automatically turn themselves off and enable them to save money and reduce costs because of the high electricity price. So, inevitably, we will see higher prices, and the challenge for the Government is to think more about that.

I just wanted to touch briefly about the safety point of view on the roads that the Minister mentioned. Well, he talks about road safety but he doesn’t advocate or support a drug-driving regime. Despite the increased number of deaths on our roads relating to drugs—and it’s topical at the moment—road safety has been ignored by that Minister because he doesn’t want to make sure that drug-drivers are off the roads.

I’ve only got a few seconds to talk about the criteria for the Provincial Growth Fund. Well, who the hell knows what it is? How do we get funds from the Provincial Growth Fund? Everyone with their hand out seems to think they’re going to get it and it’s some sort of unlimited amount of money. There’s no accountability. I mean, how do you determine if a roundabout should be built in Northland or Masterton? Do we have to go to the Minister? No accountability—a waste of taxpayers’ money.

Tēnā koe, Madam Chair, and thank you for the opportunity to take a call in this debate of the Appropriation (2017/18 Confirmation and Validation) Bill. Now, this part of the debate is focusing on the economic development and infrastructure sector, and I would like to take the opportunity here to acknowledge Jonathan Young for his chairing of this committee. I’m what’s called a floater on Thursdays, and that means that you get to see different select committees and you get to see different ways of how they are chaired, and it’s fair to say that Jonathan Young, in the way that he chairs that committee, definitely has deserved his nickname, Jonathan “Gold Star” Young—a pleasure to sit in on his committees.

Now, on a not-so-good note, one of the previous speakers, the Hon Paul Goldsmith, posed some questions with regards to economic development. He asked us “What is needed for higher productivity?” and “Under National, we created all these jobs.” Now, on this side of the House, we are a little bit more aspirational.

This part of the debate focuses on economic development and infrastructure, which includes the workplace relations and safety sector, and I’d like to talk about the safety reviews that I have been part of in the Education and Workforce Committee, in particular the safety of workers and, if time permits, the safety of the roads. In the 2017 and 2018 annual review of WorkSafe the select committee learnt that there has been progress with regard to the health and safety system in New Zealand, especially when looking back at the dark days since the Pike River tragedy, but New Zealand is still one of the worst performers. In fact, it’s in the bottom quartile of performance in the OECD when it comes to health and safety, and that is rather shameful.

So while we have made progress, areas that continue to cause concern are in, particularly, forestry and agriculture. Rates of death and injury are still high in these industries, and in the review we heard that in the agriculture sector there are at any time 600 workers off with an accident injury.

We also heard that good work is being done through harm reduction programmes and through tripartite forums, where, again, unions play a crucial role. In fact, it was the board chair of WorkSafe who was very clear that international evidence shows us that unionised workplaces are safer. The reason for that is that when you have a unionised workplace, there is support and representation to raise issues without jeopardising the particular person’s security of employment. And it’s no coincidence that in the particular health and safety priority areas such as agriculture and forestry there is the biggest challenge when it comes to worker representation and participation. So in these last sectors that I mentioned, we still see people dying and being seriously injured in the workplace.

We heard, at the particular annual review, of mixed ownership and leadership of the sectors poor health and safety performance and, as a result, also mixed accountability around the need to change. In the annual review, we were provided with evidence highlighting the importance of giving workers a voice that bypasses the unequal worker-employer power relation, thereby removing workers fear of retaliation if they speak up and are potentially in jeopardy of losing their job. Now, poor working conditions injure and kill people, and that’s why it is so very important we do everything possible to ensure that those who are simply going about their business, going to work to earn a living, return home safely to their families. So a really important and valuable review we did with WorkSafe.

To touch very briefly on transport, in the 2017-2018 annual review of the Ministry of Transport—and we heard it from the Hon Phil Twyford, as well—one of the major priorities here for the ministry has been road safety, with a commitment to putting safety at the centre of land transport decision-making. This Government has invested $1.4 billion over three years to upgrade some of our most dangerous roads. Too many people are killed or being seriously injured on our roads. We need to continue to invest in safer roads, in particular in the regions, and move away from big gold-plated projects in the cities.

Now, the Prime Minister yesterday, after Cabinet, made the comment, “Have we done everything that we wanted?” Now, of course we haven’t, but it’s clear we’ve made significant improvements and we are committed to addressing long-term challenges this country faces.

Thank you, Madam Chair. I’m very pleased to take the opportunity to speak this afternoon on the confirmation of validation of the 2017-18 estimates for economic development and infrastructure.

If anyone’s watching at home, those dates might confuse a few people—2017-18—because it’s a strange quirk, I guess, of Parliament that we’re 20 months into this new Government, still talking about what was essentially the last Budget period of the last National Government. But isn’t it a good thing that we are? Because we’re talking about infrastructure this afternoon, and, if you look across at the other side, that’s a party that’s absolutely failed when it comes to construction of new infrastructure. Not a single new road has been started under the current Government—not even Shane Jones’ much fated roundabout near his house.

But I’m not going to talk about a road, just for a start; I’m going to talk about rail, and I am going to talk about some of the expenditure that was appropriated in 2017-18 by the last National Government and, in particular, $50,000 that was set aside for a feasibility study into bringing back the Christchurch to Dunedin rail line.

Look, I’m a big fan of rail, actually. I’ve spent a lot of time on the Northern Explorer between Wellington and Auckland, stopping from time to time at National Park. It’s a fantastic journey. I really recommend it to anyone. I’d love nothing more than to see something like that started between Christchurch and Dunedin, where particularly tourists can get off the road and get into a nice carriage, enjoy a lovely glass of Marlborough sauvignon blanc or perhaps a Central Otago pinot as they look out the window and look at some pretty stunning scenery, particularly in mid and South Canterbury.

I’ve been pretty disappointed actually by what the current Government has done, because we haven’t heard anything more about that feasibility study since that Government have come into office. Phil Twyford has been asked about it, and, whenever he’s up being asked about it, all he’s talked about is commuter rail in major centres—commuter rail in major centres. Well, that does nothing, actually, for people in the area that I represent—people in Ashburton and people in Timaru. They won’t benefit at all from commuter rail between places like Rolleston and Christchurch or, you know, that CBD rail loop or even rail from Auckland Airport to Auckland Central, if it ever transpires. They won’t benefit from that; they would benefit, however, from a passenger rail network between Christchurch and Dunedin, and it’s gone absolutely quiet under this Government.

I do want to come back to roading though, because it is, I guess, a passion of mine. Despite my love for rail, I do feel like we do need to do more in terms of road and construction, particularly in mid and South Canterbury.

💬 Greg O’Connor: Train spotter!

I’d like to explain to Mr O’Connor why. I mean, I know he’s a former cop and he understands the need for good and safe roads. So I do want to talk about particularly the road between Christchurch and Ashburton—Christchurch-Ashburton—where traffic volumes have doubled since 1998. There’s a couple of reasons for that—in fact, three major reasons for that.

The first one is the increase in tourism in the South Island. As I mentioned before, the South Island is an absolutely beautiful spot, particularly mid and South Canterbury. A lot of tourists are now coming to our part of the world to enjoy it, and so tourism numbers have increased substantially. The second reason is the economic growth in mid-Canterbury and South Canterbury, particularly on the back of the strong primary sector over the last decade or so. It’s been tremendous, and we’ve now seen a lot of growth, particularly with more trucks on the road servicing that primary sector. And the third reason is the success of PrimePort in Timaru. We have had a lot more ships now coming into PrimePort, moving through to the inland port at Rolleston, and that’s led to more and more trucks on the road, to the extent that, unfortunately, that road has now become far more dangerous.

In my offices both in Timaru but particularly in Ashburton, I get people coming into my office every single week, talking about how they no longer feel safe travelling on that road between Ashburton and Christchurch. And it has become more dangerous. It’s now the second most dangerous stretch of highway in the country for fatalities and serious crashes, and, unfortunately, this Government’s response to that has been to take $5 billion out of the State highway network and put it into Auckland rail—$5 billion out of our petrol taxes, out of our road user charges, ripped out of regional New Zealand and put into central Auckland.

In my last few seconds, I do just want to address the comments by Marja Lubeck. She talked about the fact that National was talking about creating 10,000 jobs in the last four or five years that we were in Government—10,000 jobs per month. And she said, well, that’s not ambitious enough—that’s not ambitious—10,000 jobs is nowhere near ambitious enough. Well, actually, Marja Lubeck, that Government is now creating far, far less. In fact, it’s down to about 5,000. The number of jobs that have been created every month has halved under that current Government, and she has the temerity to say that we weren’t ambitious enough.

I take a short call and correct some of the misapprehensions that have been flung around the House. Of course, I am referring to the annual review period, and your admonition to speakers in this debate has been taken on board, although I would remind you there is some latitude if issues related to the current time scream out for attention. But I want to talk about KiwiRail, which has been a recipient of some of the funding from the Provincial Growth Fund, and just outline and respond to some of the rather apocryphal things that are being said about our transport approach.

We do not agree with a lot of the sentiments and a lot of the philosophies that were espoused during this period of time by the other side of the House that has fed a cult-like philosophy. Indeed, today I had to caution and tell off yet again a man who lives in the North by the name of Mr Bayly. Stop being a mouthpiece and channelling historic, discredited views of a transport nature from the National Party. I have advised him that his time to have made professional contributions has come and gone. That is why we are backing substantially the growth of KiwiRail as a credible alternative to a road-centric approach. That doesn’t mean that we don’t believe in improving the safety of roads or that we’re not going to continue to invest in the egregious cases where roading failure is leading to fatality.

But KiwiRail has, at long last, as is reflected in this report in the annual statements, received the overdue attention. Now, I won’t steal the thunder of the current Treasurer or anyone else further up the tree than my good self and talk about upcoming announcements—that lies for the future—but remind the House and remind our friends on the other side of the House that they have had an enormous amount of opportunity to grow KiwiRail, to move heavy freight off the roads on to rail. They chose not to do it. They made a strategic decision that the golden triangle would occupy enormous amounts of energy, capital, and time, and the North, where we hail from, has been starved. The roads of the North have not been remedied. They have not been supported. Consequently, we’re seeing an ongoing degradation of the roads, and that’s why KiwiRail is going to continue to enjoy support.

This particular coverage does specifically isolate the wisdom of putting the spur off the main trunk out to Marsden Point. It’s actually here, page 79. That will be happening, and, of course, they are taking a very judicious approach, and the engineers are doing drilling and costing and various other things. But it’s good to see that KiwiRail—of course, they have a new CEO now, and they have Brian Corbin, a redoubtable identity from west Auckland, extremely experienced in matters of governance, grossly overlooked by the last regime. We don’t have that petty approach, just because people aren’t necessarily fellow travellers of an ideological nature. We see virtue in retaining—mercifully low numbers—some of the people that were appointed by the last regime.

So not only are we going to see tracks upgraded, do we have a new level of leadership at an executive level, and we also have a higher quality of personnel at the governance level, but the most important thing: all of these rhetorical statements that were heard from the other side of the House—we’re actually funding what we’re talking about, and therein lies a tremendous level of difference.

Now, there’s been some rather scathing remarks directed in my direction at the criteria that’s employed to allocate the funds out of the Provincial Growth Fund to such areas as this—that it’s something akin to having a cup of tea or a beer with Shane Jones at the Māngere fish shop and you get a cheque. No, no—were it so true. It’s quite the opposite. There is a rigorous process. The fact that the Waipapa roundabout in this period of time enjoyed some of the fiscal love of the Provincial Growth Fund was interesting, because it was actually brought forward to the Government by New Zealand Transport Agency (NZTA), and we expect great changes from NZTA, given that we’re going to improve its governance. Thank you very much.

It’s a pleasure to speak on the transport Estimates debate. I just want to talk just briefly about the road versus rail, and I want to relate it to Northland. We’ve had rail lines up there for decades going into the North, and it’s never made money the whole time we’ve had a rail line in Northland. So I’m talking about specifically rail to Northland, OK? For rail to pay its way or to compete with trucks it has to have bulk and it has to have distance, and in Northland, we don’t have either. The only thing we’ve got is bulk—that’s the logging. The distance from the scattered forests we’ve got in Northland to Northport, which is where all the logs leave, is just not long enough to have them ever compete with trucks. The logs have to get loaded on to trucks in the forests, and it will never be economic to transfer that to rail to make rail pay its way in Northland.

So this debate that we keep having about rail in Northland is flogging a dead horse. They have never made money. I believe back in the day there was a time when the trucks were legislated against, and so, basically, trains had the monopoly—they had it over trucks. But since that’s been removed, trucks hands down beat rail, especially in Northland. Now, I’m not against rail in any way, shape, or form, but in Northland it just doesn’t work. I used to run a business and I needed parts overnight, and I had to have them—that’s the way we operated; that’s the way most businesses operate. There’s no way that trains can compete with trucks in that area. So this truck versus train debate, in my experience, is a dead duck.

But I want to talk about the Hon Phil Twyford. He says—and his Government—that they support economic growth, safety, and resilience when it comes to roading, and they start by canning the safest, most resilient economic driver of growth in Northland: the roads of national significance. Because you know why? It’s a National Party initiative. It’s as simple as that. It comes down to pure economics. They wished they had got it. Whey wished they had got it, but National grabbed it. It works all over the world—everywhere. If you talk about four-laning in Queensland and in Sydney, wherever they build a four-lane highway out of the city, it’s boom times everywhere. So it’s happening all over the world.

But let’s talk about the road toll. We’ve experienced the worst road toll in close to a decade, so the roads are dangerous—

💬 Hon Dr Nick Smith: In 20 years.

In 20 years, is it? Yep. Well, in the Dome Valley we’ve got a stretch of road called “The Killing Fields”, where dozens have died. It’s not fit for purpose. They’re proposing a landfill for the area, which will mean 200 to 300 extra trucks a day. The roads of national significance that we were building were going to bypass that stretch of road—but no. Phil Twyford calls it gold-plating, but then he’s going to spend money on a tram from the city down Dominion Road—not even to the airport, just to Onehunga. That’s all. He’s going to spend a fortune on that, and that’s last century’s technology, and I imagine by the time they get to build it, if they do, costs will blow out, just like the City Rail Link.

Now, let’s talk about the billions—this Government has diverted billions of dollars out of the roading budget from the New Zealand Transport Agency into the Shane Jones slush fund so they can spend millions, not billions, on projects all over Northland, and you know what that’s for. So my argument is that State Highway 1 in Northland is not fit for purpose. It’s outgrown. There’s no point in fixing up an existing road. It won’t cut it.

💬 Dr Shane Reti: Sticks.

We have to—and this Government’s answer is reflectorised sticks going down the middle of the road, and those rumble strips. I’m rolling over those rumble strips all over Northland at the moment. That is their answer to road safety in Northland, but they can the safest, most resilient roads that there are in exchange for plastic strips. So in Northland, we, the four councils, identified that the highway, the four-laning, was a driver of economic growth, but this Government decides that they’re going to concentrate on Auckland-centric things. So Northland is going to miss out with this Government. Phil Twyford likes to use the words “re-evaluate”, “review”, and, his favourite, “recalibrate”, and that basically means slash and burn—cut it, slashing and burning. So they’re cancelling our roads. They’re going to spend it all in Auckland. Northland’s going to be in a losing situation. It’s not going to win.

Thank you, Madam Chair. I’d like to focus this afternoon on the annual review of the New Zealand Transport Agency (NZTA). Now, this is an area that’s seen a lot of focus over the last wee while, and justifiably so. We’ve heard already a bit about how we’ve seen $5 billion stripped out of the regional roading networks and rediverted to rail in Auckland. That is a big issue, in particular for me in the Waikato. We were looking at another couple of pieces of extension to the Waikato Expressway project—the roads of national significance. We’re very lucky to have seen work under way now from Auckland right down past Hamilton to near Cambridge, and they were going to continue to the intersection of State Highway 1 and 29, where traffic diverts and splits two ways. We were then looking at additional stages. Those projects have been taken off the table.

This is a major issue in our area, given the high volume of traffic and the safety risk. We heard from NZTA during the annual review that under the 2018 Government policy statement, they’ve revised and reprioritised some of their focus. The number one focus, and we heard it from the Minister just earlier, is on safety, and yet this very project was going to significantly improve the safety in the Waikato, and it’s been canned. It’s outrageous to see that taken off the table. They are very dangerous intersections, and now they’re not getting the support they need, although part of that—and we heard about the additional funding into the Safe Network Programme—was going to focus on rural roads. Again, there are plenty of those in the Waikato.

A couple of key intersections I’d like to focus on with this and, in particular, the rural intersection activated warning signs: now, NZTA said those signs—these are the flashing electronic signs you see as you approach intersections; they warn you if there’s a car looking to come out and you have to slow down to 60—were going to be installed at the intersection of State Highways 1 and 29, and also State Highway 29 and Hopkins Road, near Hobbiton. It’s a very busy intersection and often plenty of tourists are going through there. We’ve seen all sorts of interesting turning manoeuvres in that space. This was going to help improve safety at those intersections—not a fix but one step. I wrote to NZTA about this, and they confirmed that they would be installed by the end of January. I visited on 1 February, and they weren’t there. Just a few weeks ago, I wrote to NZTA because they’re still not installed and it’s putting our communities at risk. I raised this during the annual review process as well, and NZTA said, well, they didn’t know about specific projects, so they couldn’t comment on that, but absolutely they expected to be able to deliver on their time frames. They’ve failed miserably in this regard and in so many others as well.

Another example is Morrinsville—another great town in my electorate—at the intersection of State Highway 26 and Avenue Road: inside the town limits and a dangerous, busy intersection with high volumes of heavy-vehicle movements through there as well. There were going to be safety improvements done to that late last year and resealing done as well. It still hasn’t happened, and here we are now in May the following year, more than six months after they were meant to have implemented these safety upgrades. NZTA are not taking their responsibilities seriously. They’ve said, under the Government policy statement (GPS) that they put out, which they mentioned in this annual review, that safety was their number one priority, and yet they’re not demonstrating that. They’re letting down rural communities like Matamata, like Morrinsville in the Waikato—communities that rely on economic growth in the area, that rely on those transport connections, and yet they’ve been marginalised by this Government through a failure to act and to meet the promises that NZTA has made.

We heard also from NZTA around a shift—that this shift of focus in the GPS would result in increased congestion and traffic delays. NZTA stated that. They believe this will change the focus and that traffic congestion and times will increase in cases—they’ve stated it right here—but, in other areas, such as the Hamilton to Auckland rail link, it will reduce traffic on the roads. What they don’t seem to realise is that Te Kauwhata, at the north end of my electorate, is a growing town that, actually, under the previous Government, received $37 of investment for their infrastructure, which this new Government has reinforced. They’re looking to grow—there’s KiwiBuild there apparently, too—and yet there’s no rail link; the train is going right through that town on its way from Hamilton to Auckland and not stopping. They stand and wave at it as it goes past.

So what we’re hearing is a lot of rhetoric from this Government, NZTA, and KiwiRail standing up and saying they’re doing these wonderful things and yet their words do not align with their actions. Communities like the Waikato are being sorely let down, and the Government needs to do better.