A rather strange lead story on One News tonight about ‘roading jobs around the country being under threat’. Here’s the video for the story, and TVNZ’s full story is included below:

There is more grim employment news with roading jobs around the country under threat because of a lack of local government funding for planned projects.

This comes after images of thousands of south Aucklanders queuing for a handful of jobs has reminded New Zealand that unemployment is still rife.

Roading New Zealand says regional bodies are pulling money out of planned roading projects, despite central government plans to boost infrastructure funding.

In February last year, the government announced a $500 million dollar stimulus package, with $142 million of that for roads alone.

Meanwhile around the country councils were shutting their wallets.

Transport Minister Steven Joyce says it is a concern.

“We are putting a huge amount of additional expenditure in all adding several hundred jobs, so obviously it would be a concern if we were losing jobs out the other end,” says Joyce.

The government-funded New Zealand Transport Agency matches local government spending on local roads dollar for dollar.

So the agency set aside over $350 million to match what councils planned to spend on roads for the year. But the transport agency spent $40 million less because local government spending came short by $40 million.

That means a total of $80 million that should have been spent on local roads was not.

Chris Olsen from Roading New Zealand says it is quite a significant impact.

“If you think that the government’s stimulus package was $142 million over three years then $80 million in one year is quite substantial,” says Olsen.

And that means job losses.

The thousands in south Auckland queuing for only 160 supermarket jobs have already illustrated the dire employment situation right now.

At least 100 roading workers in Auckland lost their jobs last year and Robert Reid from the National Distribution Union says this could increase.

“We are facing considerable more redundancies in the future and we’ve already been told that by the major road construction companies,” he says.

But local government says roading projects are prone to delays and it is trying to create jobs.

Geoff Swainson from Local Government New Zealand says local government are involved in a broad range of infrastructures and projects.

“One only has to look at the investment that’s occurring around the country in terms of, for example at the moment, building new stadiums,” he says.

Roading New Zealand says more local government money needs to be committed to roading projects to keep people fully employed.

Joyce told ONE News he has met with the interested parties and he is aware local government has under spent on its roading budget for years now. He says while it is too early to tell how this financial year will turn out he will keep his eye on it and if one region under spends then that money will be relocated to another region to use on their roads.

For a start, I did think that the main idea of investing in transport infrastructure was to improve the state of the country’s infrastructure so that we can get around more easily and more sustainably, rather than it being a giant “make-work” programme, but I guess that’s a useful secondary benefit.

But the main question that came into my head was “why the heck’s this a story now?” An excellent table put together by Cam Pitches of the Campaign for Better Transport clearly shows that the May 2009 Government Policy Statement cut a lot of money out of local road funding compared to what had been expected under the August 2008 Government Policy Statement – $225 million less over three years in actual fact. Quite close to the $80 million a year that’s mentioned in the new story above. Over the past few years councils have struggled to fund their share of the cost of improving and maintaining local roads as they’ve been doing everything they can to keep rates down – so it seems a little unfair to criticise councils for not spending enough on building more roads when at the same time they’re being criticised for increasing rates by too much.

Before the Government Policy Statement was changed in May 2009, the previous iteration had realised that local governments were struggling to fulfil their half of the funding share when it came to necessary local road improvements, and that NZTA funding (from petrol taxes etc.) would be necessary to make up the short-fall. Unfortunately that ‘making up the shortfall’ money is now being ploughed in to the roads of national significance – and therefore we have ended up in the current situation. It’s hardly a surprise, and certainly not the fault of local government in my opinion (I hardly think Local Government Minister Rodney Hide would be particularly happy about Transport Minister Steven Joyce telling local councils to raise their rates to spend more money on local roads).

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  1. Are roads the new NZGR? Back before rail was corporatised, it was regarded as fat and inefficient because it was used as a means of job creation rather than an efficient means of transport.

    And now rail must “pay its own way” while it looks like the roading industry sees one of its purposes as … job creation?

  2. I don’t know whether road building is even that effective as a “make work” industry – as it’s very capital intensive rather than labour intensive. I heard that public transport investment creates 40% more jobs per dollar spent on it – and those jobs are often permanent (drivers, clippies, signal-staff etc.) rather than temporary.

  3. Just goes to show the empty rhetoric of Hide and Joyce when it comes to Local Government. They want Local Government to spend less but are too stupid to realise where the bulk of Local Government spends its money- infrastructure. Cutting Local Government involves driving over more potholes- get it.

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