Twyford PhilHon PHIL TWYFORD (Minister of Housing and Urban Development): Thank you Mr Speaker. It's a pleasure to stand here and support this bill and acknowledge the leadership of the Hon Shane Jones in developing this piece of work to establish a New Zealand Infrastructure Commission.Through to 2022 New Zealand will be spending net capital of $42 billion on infrastructure and that figure alone I think should be enough to focus our minds on the need to improve the quality of the spending to build the right infrastructure projects at the right time and the right place and to lift the procurement performance of central government across the board. Not to put too fine a point on it this bill is a response to what I think has been a less than optimal performance for some time in the issue of the procurement of infrastructure. Government itself has not even been properly coordinating its procurement of major infrastructure projects across the public sector. It certainly hasn't been operating strategically within the Australasian infrastructure market as it should be doing and it hasn't adequately built a multi-year pipeline of large infrastructure projects which would allow the industry the certainty and the ability to plan its workforce and its ability to engage with those projects.Some Government agencies are very good at large projects; others not so. It was only a few months ago that we discovered that Government agencies by and large were not even following the Ministry of Business Innovation and Employment's own procurement guidelines for construction contracts—guidelines that had been issued by the Government's lead procurement agency. So Minister Parker put paid to that and Government agencies and departments were directed to follow those guidelines but the fact that it hadn't been happening I think illustrates the lack of a cohesive policy in this area.The commission that's proposed under this bill will have two main roles: strategy and planning first and secondly procurement and delivery support. So the first: the importance of developing a policy framework for procurement—a set of principles upon which Government agencies would undertake their procurement designed to lift the quality and the standard of procurement and to develop that multi-year pipeline. Second one: delivery support. When there's an agency or a ministry that has a big project on its books but doesn't necessarily have the capability in-house and the history of doing these large projects the commission would be able to step up and assist it and take over that procurement role.One of the really important opportunities here is for the central government to coordinate its procurement work with local government. If you take the construction industry central government's about 20 percent of all the work that happens in New Zealand in a given year but actually local government while less than 10 percent of the market still is a very very significant customer. Now if central government and local government were to get together and coordinate their procurement that could make a major positive difference to the market.The commission is intended to be a one-stop shop for investors and the big construction companies who work in this space—a place for them to come and talk to understand the plans and the needs of the New Zealand Government and the wider New Zealand market and to provide expert advice in planning and strategy for all bits of the public sector.Much of the thinking that has supported the development of this bill has drawn on work that's been going on in Canada right across the United Kingdom and Australia over the last decade or so where a number of Governments have been trying to lift their game to achieve much greater efficiency and better outcomes for big infrastructure projects. We've seen in a number of those countries arm's-length commissions established that have taken the infrastructure role out of a ministry out of Treasury out of central government and established an arm's-length independent commission with the idea of addressing two main things. The first is that—and we see this in New Zealand currently—central government's capability on infrastructure is spread over I think three different units across Treasury and the Ministry of Business Innovation and Employment. So you just don't get the concentration of capability that would allow you to achieve that kind of centre of excellence that you would want.The second is to make it arm's length from Government and to take some of the politics out of it to try to build a cross-party consensus and to engage better with the private sector. Ms Collins in her speech before me—unwittingly I think—illustrated one of the very problems that this bill is trying to address. She articulated such a narrow ideological and highly partisan attitude towards infrastructure projects. That is the very thing that this commission by lifting the general standard of procurement practice building consensus across Government and across the political spectrum and indeed with the private market—those are the challenges that this bill is setting out to address.I want to acknowledge a couple of influencers in the work that led up to this bill being drafted. One is a number of the Australian infrastructure agencies: the federal agency Infrastructure Australia Infrastructure NSW and a number of what they call i-bodies. These arm's-length infrastructure commissions have been extremely helpful and Minister Jones and I and Minister Robertson have had extensive conversations with a number of the Australian bodies. We've been over there they've been over here and they've been extremely helpful in teasing out the model and the different options that we could look to in setting up this new body.I also want to acknowledge Infrastructure New Zealand the industry body that represents a lot of the infrastructure companies who have been a prolific generator of ideas and proposals right across infrastructure including in my areas of responsibility around housing and transport and urban development. Infrastructure New Zealand has been advocating for making policy proposals for the establishment of an arm's-length infrastructure commission as we see here in this bill today and they deserve I think significant credit for that.I want to finish by just briefly commenting on a companion piece to this bill and that is the work that I've been leading with Treasury on establishing new ways of funding and financing the infrastructure that's needed for urban growth. That work I think sits alongside the work that Minister Jones has been doing on the new Infrastructure Commission. It's designed to provide new options to fund and finance the roads the three waters broadband electricity and all infrastructure that's needed to allow our towns and cities to grow. We will I hope shortly bring a bill to the House to legislate the framework for this new way of financing infrastructure that will allow private financing bond finance to be invested in the infrastructure for new urban growth paid back over the lifetime of the asset up to 50 years with an infrastructure levy on the properties in that development. It would effectively bypass the council balance sheets and allow us to tap into a limitless supply of investment capital to build the infrastructure that our cities need.This kind of innovation is the kind of thing that the Infrastructure Commission wants to foster and I think with these two initiatives side by side New Zealand can truly lift its game in the procurement of big infrastructure projects. We're talking about built infrastructure engineering projects everything from energy water roads electricity—all of the things that we need to build an efficient and prosperous New Zealand. Thank you.