Copeland Gordon: Questions for Oral Answer — Questions to Ministers 
Copeland Gordon: Questions for Oral Answer — Questions to Ministers 
[Volume:609;Page:6253] 
6.  
GORDON COPELAND (United Future) 
 to the  
Minister of Finance 
: Will the Government adopt United Future’s suggestion made on 19 December 2002 and repeated on 4 June 2003 to make up the shortfall in the level of funding available for fixing Auckland’s road congestion by using Government borrowing? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 No decisions have been taken about alternative further forms of funding but the costs to the whole economy of Auckland’s roading congestion are recognised and we are exploring options to address the problem. 
Gordon Copeland 
: Is one reason that the financing of Auckland’s roading is a high priority for Government that Auckland’s traffic congestion is estimated to be costing the economy $1 billion per annum and would the gains from reducing this congestion provide an economic payback on any Government borrowing? 
Hon Dr MICHAEL CULLEN 
: The answer to the first part of the question is yes. I would be somewhat dubious about tying borrowing to general returns in the economy as opposed to specific funding strengths. 
Clayton Cosgrove 
: What are the fiscal implications of borrowing to support investment in Auckland’s roading system. 
Hon Dr MICHAEL CULLEN 
: The Government’s debt position is sufficiently robust that we could borrow whilst also maintaining our target of keeping gross debt below 30 percent of gross domestic product. 
Dr Don Brash 
: Why would the Government even contemplate borrowing to fund high-yielding infrastructure projects while at the same time it is planning to invest billions of dollars in low-yielding shares and bonds in overseas markets? 
Hon Dr MICHAEL CULLEN 
: The member’s lack of faith in the long-term future of capitalism continues to astound me. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. Dr Brash has asked a question that has exercised in a positive way the minds of most economists in this country and of people who handle retirement funds. It is a fair and reasonable question. That the Minister cannot answer it is no reason he should denigrate someone’s understanding of capitalism of which he has not a very good grasp obviously. 
Mr SPEAKER 
: I think the Hon Dr Cullen could add a sentence or two. 
Hon Dr MICHAEL CULLEN 
: I could refer the member to many sources indicating that roughly over the last 80 years the yield on equities has outperformed the yield on bonds by about 7 percent per annum on average. 
Larry Baldock 
: Can the Minister give some assurance to the residents and businesses of Tauranga that in the light of the economic significance of the Port of Tauranga the Government is also working to allow for creative solutions to the $450 million strategic roading network funding shortfall there? 
Hon Dr MICHAEL CULLEN 
: Despite the absence overseas of the Hon Margaret Wilson the issues in Tauranga remain close to the Government’s heart. 
Jeanette Fitzsimons 
: Does the Minister really think that building John Banks’ wish list of new motorways in Auckland will fix congestion despite Infrastructure Auckland’s advice that even finding and spending all that shortfall over 10 years will see congestion 50 percent worse on the isthmus and 10 to 20 percent worse in the west and the south; if so why does he believe that? 
Hon Dr MICHAEL CULLEN 
: I think if I could put the counterfactual that if we were to close half the present roads the member’s logic would suggest that congestion would decrease. 
Peter Brown 
: Noting the Minister’s earlier answer in which he referred to a specified level of debt can I take it that he is telling this House he prefers borrowing to be kept at a specified level rather than address our roading problems? 
Hon Dr MICHAEL CULLEN 
: Under the Fiscal Responsibility Act the Government is required to set targets for such matters as debt and sticking to those targets once specified is very important in terms of credibility. 
Gordon Copeland 
: Will the Government consider allocating the 18.5c per litre currently collected on petrol and diverted straight into the consolidated account to road-related expenditure to service any borrowings that might be undertaken and other measures given that a huge investment in roading is required right throughout New Zealand; if not why not? 
Hon Dr MICHAEL CULLEN 
: No. All the studies that have been done—and further work is to be released before too long—show that the Government is not recovering the full economic cost of roading in New Zealand. There is not a case to be made for reducing the amount of money that is used out of that excise duty for other purposes.