Genter Julie Anne: Land Transport Management Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Genter Julie Anne: Land Transport Management Amendment Bill — First Reading 
[Sitting date: 11 September 2012. Volume:683;Page:5108. Text is incorporated into the Bound Volume.] 
JULIE ANNE GENTER (Green) 
: 
 I rise on behalf of the Green Party to speak on the Land Transport Management Amendment Bill. I do have quite a lot to say about this bill. I will start by saying that it is really a shame that the Government is missing this incredible opportunity that we have in transport policy to achieve the goal that it says it wants to achieve which is economic productivity. We have the opportunity to build a consensus really across Parliament to achieve what all New Zealanders really want from their transport system. 
 But unfortunately as was well articulated by David Bennett this Government is stuck in the past. It is stuck in 30 years ago. He said that he was so happy that finally the Waikato region was going to be getting the Waikato Expressway a project that the region has been advocating for for 30 years—30. I think that speaks volumes about where the Government is placed in terms of its transport thinking. It is stuck in the past. 
The Green Party will not be supporting this bill—not because everything in the bill is bad; some things are arguably quite good. But when you take it in the context of the current evidence-free transport policy and priorities the changes that this bill makes could allow some monumentally bad projects to go ahead. That is firstly because the bill allows for additional borrowing to pay for transport infrastructure. It allows for borrowing over and above covering cash flow. At a time when the Government is arguing that we need to sell strategic assets that are providing a healthy return in order to supposedly pay down debt the same Government is gearing up to borrow billions to pay for uneconomic motorways. It is really tragically ironic that it is going to be borrowing to pay for motorways that will not even deliver the economic development that it says it wants. The idea that the cost of infrastructure with long-lasting intergenerational benefits could be spread over the years through borrowing is not a terrible idea in and of itself. However this Government is prioritising very bad State highway projects that simply do not make economic sense. They certainly will not substantially benefit future generations. So in this context borrowing is extremely dangerous. It is going to saddle future generations with debt for projects that they will not even benefit from. 
The proposed legislation also opens the doors to public-private partnerships and really this is just a back-door way of borrowing. It is definitely still borrowing but it is keeping that debt off the Government books in the short term. I think that when we look overseas at examples of public-private partnerships particularly in respect of transport infrastructure what we find is that they are extremely damaging for the public sector and they are extremely costly for the taxpayer. We compiled research on Australian public-private partnership roading projects that should be highly relevant to the Government’s plan to use public-private partnerships to fund some of its roads of so-called significance. Here is just one example: the CLEM7 Tunnel in Queensland. The initial forecast cost was $1.2 billion. The actual cost was $3 billion. The traffic forecast at opening was 60000 vehicles. The actual traffic during a lower toll period—this is the peak—was 34000 vehicles. That is about half of what was forecast. The forecast for 2012—this year—was 100000 vehicles. And if you can believe it the number of vehicles using this project has fallen even further to 28000. That is about a quarter of what was forecast to use the project. 
If you look at all of these Australian public-private partnership roading projects over the last few years you will see that they are all basically debacles. If you look at the literature from Europe as well you see consistently that there is an over-prediction of the benefits of roading projects through public-private partnerships and toll roads in particular. The reason for this is actually really understandable. It is that the entire methodology that we have used in our transport planning for the past 50 years or more is actually biased towards cars. It overestimates the benefit of improvements that allow more vehicles to flow through an area and it underestimates the cost. 
If we look at the actual evidence then what we can understand in a way that really the National Party should be able to understand is that there are a large number of market distortions in our transport network. That has led to an extremely unbalanced transport system which in the case of New Zealand is very very costly and it is going to become even more costly as we face rising fuel prices. We have the opportunity to do things differently: to spend less money and to achieve the transport outcomes we want—the efficiency and the effectiveness. We have the opportunity to reduce congestion—spending less money and investing more in trains and buses. I am really sorry that David Bennett is not here because I think that if he actually looked— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Order! 
JULIE ANNE GENTER 
: Excuse me. Sorry Mr Speaker. The previous speaker David Bennett mentioned that the reality of public transport was that people did not take it and it required huge subsidies. But I think he has not actually looked at the numbers because in Auckland for example public transport patronage has been growing extremely fast and patronage on the rail network in particular is almost 30 percent higher than what was modelled by Auckland Transport’s model 2 which is the public transport four-stage model’s demand for public transport and road projects. 
At this point in time when the Government is arguing that we need to reduce debt at the same time it is taking the exact opposite approach to transport infrastructure. There could not be a more opportune time to actually reduce the amount of money that we are spending on transport infrastructure and make it smarter make it more effective and make it more targeted. 
There were a few interesting observations in the board paper that went to the New Zealand Transport Agency about public-private partnerships which are quite relevant to this bill as this bill is going to allow public-private partnerships. Now we see that the New Zealand Transport Agency is actually already preparing a business case for public-private partnerships for certain roading projects. One of them was that Transmission Gully obviously is not a good option for a public-private partnership even though the Government has been talking about it being an option. The reason it is not a good option for a public-private partnership is that it does not have a good business case. Every Government analysis of that motorway project has shown that there simply is not the demand to justify the tolls that would be needed to pay for the project. So what does that tell you? It tells you that actually the project is not economically viable. Going to the private sector is not going to make viable a project that is not economically viable. All it is going to do is take the risk and put it on to the public. Actually we have seen that the model of public-private partnerships that the Government is actually investigating does exactly that. It is called the availability payment model which means that tolls go to the Government and the Government pays the private companies an annual payment for building and maintaining the road. This model puts all the risk of low patronage on the Government and on the taxpayer which we have seen in Australia and in Europe where consistently toll roads have less patronage and lower revenue than what was forecast in the business model. 
All the Green Party is asking for really is some economic rationality and evidence to be applied to transport policy in a way that really the Government should be quite open to. I would be quite happy to sit down with the Government and help it because I know that I have more expertise in this area than it does. I am really interested in working with the Government because I genuinely believe that Government members are going to live to see the day when everyone in New Zealand realises that these projects were a terrible waste of taxpayers’ money. They are going to regret ever supporting them. These roads will be like the motorways in Greece which are completely empty cost billions of dollars and did nothing—nothing—to create economic growth. That is very understandable because once you have an existing road network the benefits of replacing or duplicating a link diminish as time goes on. If you were putting a brand new link in where there was no road before maybe there would be some economic benefits. But there are already roads between Auckland and Hamilton. There are already roads between Puhoi and Wellsford. The marginal cost of duplicating that road is enormous and the benefit is so tiny because it is only a few minutes saved.  
I would like to conclude by saying that the Green Party will not be supporting this bill until such time as the Government can demonstrate that it is capable of an economically rational transport policy. Thank you.