Spend that cash

On Tuesday, the Government slapped itself on the back and congratulated itself on a massive $7.5 billion surplus – the biggest surplus since 2008 prior to the global financial crisis.

This is against a backdrop of the lowest business confidence since just after that global financial crisis; a massive dive in rural confidence tagged to farmers’ concerns about the Government’s policy direction; and a slowing economy in the provincial regions that previously, had been booming.

There is something wrong with this picture. The adage that perception is reality rings true. Most of New Zealand is feeling the pinch, but the Government continues to tell us everything is OK.

For some time, we have been calling for the Government to urgently spend some money on roads – making existing roads safe and building new, four-lane roads where they are most needed. It is our roading network that keeps our economy moving and growing and food on our tables. People and goods need to get from A to B in the most timely, safe, cost-effective and efficient manner. Even if you are giving a nod to the environment, that makes the most sense, as congestion and delays on the road only increase the emissions the Government is trying to reduce.

But with the ideology in play, circular reasoning is being applied around the negative impacts of cars and trucks, rather than their essential role in our high standard of living. This sees a reluctance by the Government to follow all the expert advice that says, “spend some money on infrastructure to boost the economy”.

Back in June, the Prime Minister’s Business Advisory Council warned that New Zealand is at an “infrastructure crisis point”. It said there is “no overarching vision or leadership in New Zealand for infrastructure development”.

You would think this would raise some concerns, given the Government’s heavy reliance on advisory groups at the expense of core government agencies such as Treasury, who are surely recommending spending some money to make some money.

Last week, we saw stark evidence of the impact of not spending on infrastructure. A key part of the State Highway network collapsed, literally (pictured above – photo from Mark Brimblecombe). Locals say Parapara Road, on State Highway 4 between Whanganui and Raetihi, has been problematic for the past 15 years.  A sizeable crack appeared last week and then the road broke entirely, with hundreds of cubic metres of soft earth slipping and sliding and cutting off vital transport links for an indefinite period.

Drone footage and photos of the slip illustrate how significant it is. The slip is still moving and it is not going to be fixed any time soon, if ever.

This leaves farmers, school children, ambulances, and freight companies facing major detours for an indefinite period of time. The recommended detour route will add at least one hour to every journey. About 1000 vehicles use the Parapara Rd daily, about 10 percent of which are heavy vehicles. Health care professionals are looking at helicoptering out critical patients, as a road journey will now be so long. This is a critical situation.

Steve McDougall from McCarthy’s Transport has been quoted as saying the company’s logging trucks will now have to connect with State Highway 1 at Bulls, or State Highway 3 via New Plymouth, to travel northwards. He says this will have a catastrophic effect on the business that will cost between $30,000 and $40,000 per day. It will reduce productivity – less trips will be possible each day. That cost will be passed on to the forest owners and the end user customer.

The cost of not investing in roads ultimately hurts all New Zealand families. Basics, such as food costs and access to health care cause the initial pain, but the cost across the supply chain of all goods just goes up and up.

We cannot have major roads collapsing. Look at how long it is taking to find a fix to the Manawatu Gorge. The Government needs to apply some basic economics to its thinking. How much cost are they prepared to add to every Kiwi household so they can say, “look how much money we’ve got in the bank”?

– Nick Leggett, CEO, Road Transport Forum


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