There was an intriguing question and answer session in parliament today between the Greens’ Russel Norman and Finance Minister Bill English, around Treasury’s Guidelines for Better Business Cases and the various Roads of National Significance.
The transcript can be read here.
I think Russel Norman did a pretty good job of walking Bill English into sounding like a huge hypocrite – in that supposedly the RoNS projects are the only bits of capital investment (and we’re talking $14 billion here) which don’t need to pass through the better business case guidelines. Most amusingly, it seems that the reason the RoNS projects get to bypass the process is because they were an election promise, even though the very existence of the guidelines is to temper over-enthusiastic promises that haven’t been properly assessed.
The importance of applying the business case guidelines to the RoNS projects becomes clearer when you actually look at Treasury’s process in more detail: most particularly a requirement to assess alternatives, come up with a robust ‘problem definition’, look for small-scale interventions which might delay the need for large-scale spending and largely go about justifying a project in a more robust way. From what we heard after the review of the City Rail Link’s business case last year, this is the exact process the CRL is going through at the moment.
Yet a project like Puhoi to Wellsford avoids having to have alternatives assessed, avoids having to develop a robust ‘problem definition’ (what is the project actually trying to solve) and perhaps most of all, avoids questions such as “what if we bypass Warkworth, how much does that solve the problem and delay the need for a super expensive motorway?”
Talk about a double-standard!
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Great stuff they are basically being forced to admit over and over again that they are pushing these through without any substantial analysis. Love it when they resort to childish crap like “well you may be happy for people to sit in traffic but we’re not so we are building these roads” Awesome stuff keep hammering them again and again!
In my days in transport, Treasury were pretty careful with money – what’s the bet that they too are being ignored in the RoNS process?
Russell and Bill are two of the more genuine MPs in the house. Great to see them hammering away at each other with what seems to be begrudging respect.
But Russell is factually correct (and I suspect Bill knows this); the RoNS should be assessed using Treasury’s guidelines – and if they were then Puhoi-Wellsford would be sent down the fiscal river on the next cabbage boat. Or at least the staging/timing would be altered so that major safety improvements were done first.
It’s a shame in this case that people are possibly dying in accidents because of the govt’s addiction to over-sized motorways, rather than incremental safety improvements (that are likely to have much better value for money).
What this really highlights is the power of Joyce. The RoNS are his programme and he clearly won the right to a firewall from Key to protect them from any Treasury overview and English’s essentially dry economics. English is a spend nothing dry. Joyce is a ‘I know best’ interventionist. Not unlike Muldoon. Neither understand cities.
Key’s popularity is the machine that keeps this tension under wraps. As it declines (watch) we can expect this difference to become more visible. English’s problem is his record as leader. Joyce’s is that he’s wrong.
The final paragraph from Mr English is telling.
Hon BILL ENGLISH: The way the transport funding now works is essentially user-pays. That is, people who use the roads pay through their petrol tax and their road-user charges. That money goes into the dedicated transport fund. If we build more roads, they would have to pay more. If we build fewer roads, then conceivably they would pay less. In the long run, New Zealand needs this kind of infrastructure. Actually, I think there was general agreement across the parties by the mid-2000s that we were under-invested in roads, and, despite where the Greens would like to go, most Kiwis still have cars and most of them are going to insist on using those cars, and therefore we probably need roads.
In my opinion, road user charges and other associated taxes / levy’s need to be rolled into the general transport budget which would have to include rail, PT, walking and cycling etc.
It is not user pays. It is tax and spend.
Yes this is an absurd argument: a tax is a tax. By this reasoning alcohol excise tax should all be spent on investing in more bars and pubs.
As to his second point: this is just the view from the provinces, and is not inaccurate for the countryside, but is irrelevant for the billions of billions spent on urban motorways. Bryce is right, but also transport spending needs to be liberated from capture by one mode and be apportioned according to need and best outcome. This will be different for cities, esp. AK, than the countryside.
Also he is admitting that this is a policy for the past!? Makes a mockery of that terrible cliche of his type; ‘going forward’.
And; yes we need roads, but we have roads, it is a question of how many new roads we need and where these are and when we may need them. Infantile Nats love to imply that the opposition somehow will make all our existing roads vanish.
But don’t our rates also pay for roads, foothpaths, traffic lights etc….??
Not to mention externalities like pollution costs? environmental amelioration, ACC etc….etc…
In that case we should remove the subsidy ratepayers contribute to the road users under this user pays system.
Then we need to refund all those who have to pay for the externalities.
Peter M- this only happened this morning? Fast work.
Love how Bill has to criticise the CRL to try and score points.
Damn, Russell and Julie-Anne and a bunch of the Greens are THE opposition aren’t they?
Keep it up Dr N!
I am pretty apolitical, but the Greens have been in phenomenal form lately.
It is sad to watch what the Nats are doing to NZ transport through spending in the wrong areas. I am very pleased with what the Green Party is doing at the moment. They are definitely on a roll and I am impressed.
Bill English claimed repeatedly that the cost/benefit of the RoNS was “pretty good” compared with rail. Is this true? Is it true for some but not all? Anybody know where I can find figures on this?
You could start here, and there is more on this site alone: http://greaterakl.wpengine.com/2012/04/06/the-poor-quality-of-our-state-highway-spending/
Ohhhh look! More tax and spend:
Given the flat lining of driving, more efficient cars and inflation I suspect this won’t actually raise the money it needs to and NZTA’s budget will decline in real terms. The seemingly set nature of the RoNS speeding will mean less money for the more sensible things they do.
The ante has been upped. Now $14bn an counting…
http://publicaddress.net/system/topic/3474/?p=259553#post259553