By Owen Gill, Chief Executive, Infrastructure New Zealand
I often wonder what it must be like to work in Minister Grant Robertson’s office. In the last few weeks, I suspect it has been like being a circus juggler. The Finance and Infrastructure Minister has more balls in the air than perhaps any minister since Bill Birch pushed through Think Big in the early 1980s. As Minister Robertson notches up his fourth Budget (2018 was his first – it seems a long time ago now), he has shepherded into life:
- Three Waters, alongside Minister Nanaia Mahuta
- Te Waihanga, with assistance from then-ministers Shane Jones and Phil Twyford
- New Zealand Upgrade Programme
- A proposed resurgence of rail and rolling stock-making in New Zealand, with assistance from Transport Minister Michael Wood
- A housing acceleration fund, with assistance from Housing Minister Megan Woods
- A renewed assessment of light rail for Auckland proposed to report before Christmas.
On top of all that, he threw a few curveballs in Budget 2021 – $306 million to rebuild Scott Base, and a $300 million fund to encourage the uptake of low-emissions vehicles. Some saw Scott Base coming, but the low-emissions vehicles piece was a surprise. Three Waters received an additional $296 million, to take the total available to just $1.1 billion.
New Zealand Infrastructure Commission: Te Waihanga will present Minister Robertson with its proposed 30-year strategy for New Zealand this September and is currently engaging on a consultation document. The government will table the final strategy to Parliament before the end of March 2022. Our pick is that the September version of the strategy will be 99% of the story – Te Waihanga and Minister Robertson will not want any surprises next March.
Expect to see Te Waihanga make a strong play for the idea of lead infrastructure, which is identifying and prioritising the big builds that produce significant results. New Zealand fast fibre – which has been a success in anyone’s books and an enormous credit to Crown Infrastructure Partners and its contractors – is the class-act in this regard.
The big question for Minister Robertson – who is proving to be remarkably adept at juggling – is what next? With the assistance of a handful of others, he has catalysed a lot of action in a short time. He must now be thinking about his second act and what he can do in the remainder of this term. As Te Waihanga opens consultation on its strategy, here’s our summary of Minister Robertson’s medium-term choices:
Private capital or not?
PPPs have proved to be a vexed thing for this government. One of the Minister’s tasks is to figure out how the government can accept more private capital. Budget 2021 shows the government’s balance sheet will be stretched right through to 2028 or so, which means the minister has little room to raise capital via the government’s own means.
In the 1990s, then UK Prime Minister Tony Blair had a group of senior officials who worked on what was known as Deliverology – the art of taking an approved piece of policy and getting action on the ground. Indeed, Sir Michael Barber, Blair’s deliverology leader, went on to make an entire school of thought out of the subject. Delivery is one of Minister Robertson’s most problematic areas. The government will raise its capital investment to near-record levels in the following year, but – as the national budget shows – the government is increasingly caught between rising project costs, skills shortages, and a lack of prioritisation.