Latest / Best of Business / Geoff Cooper: Infrastructure Commission chief executive on the unveiling of New Zealand's first national infrastructure plan

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Geoff Cooper: Infrastructure Commission chief executive on the unveiling of New Zealand's first national infrastructure plan · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk SEDB. Follow
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  Speaker 1: this and our wide range of podcasts now on iHeartRadio Afternoon.
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  Speaker 2: The Infrastructure Commissions just dropped its thirty year plan and
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  Speaker 2: it's a sobering reality check. It says we need just
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  Speaker 2: cut spending on roads, we need to double spending on hospitals,
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  Speaker 2: Energy needs a big spending boost, and Auckland's Harbor Bridge
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  Speaker 2: may need a nine dollar toll. Jeff Cooper is the
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  Speaker 2: CEO of the Infrastructure Commission.
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  Speaker 3: With us Hi Jeff kyoto Hea, how you doing well?
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  Speaker 2: Thank you mate? Explain the thinking behind a nine dollar toll?
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  Speaker 3: Oh gosh. Look, we've started really by looking at all
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  Speaker 3: of the different infrastructure services New Zealand's going to need
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  Speaker 3: over a thirty year period. You know, so often we
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  Speaker 3: look at one sector at a time, we come up
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  Speaker 3: with lists of things that we realize we can't afford
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  Speaker 3: and we have to go back to the drawing board.
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  Speaker 3: This is an effort at looking across all of these
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  Speaker 3: sectors and putting forward a fundable, coordinated portfolio of investments.
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  Speaker 3: And out the back of that clearly is that you
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  Speaker 3: know we need to say age and phase projects a
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  Speaker 3: little bit more to make sure that we need get
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  Speaker 3: a good balance between services. So if we want to
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  Speaker 3: go outside of that budget, what it ultimately means is
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  Speaker 3: that we're going to need to derive more revenue from
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  Speaker 3: the asset base, and in roading that can look like tolls,
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  Speaker 3: it can look like congestion charging and other such things.
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  Speaker 3: And all sectors, not just land transport, are grappling with
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  Speaker 3: these things because the financials are tight, and I think
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  Speaker 3: New Zealanders.
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  Speaker 2: Know that do you have any preference as to where
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  Speaker 2: we build our healthcare?
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  Speaker 3: Well, the plan sort of goes through. I mean we
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  Speaker 3: start by looking at how our demographics are changing, and
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  Speaker 3: under any plausible scenario, we look at you know, New
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  Speaker 3: Zealand is going to need more investment in health services.
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  Speaker 3: We've known this for a while. But if anything, we're
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  Speaker 3: aging faster than we thought we were going to. So
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  Speaker 3: what we've done in the plan is look at how
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  Speaker 3: our aging differs by regent and then a stab you
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  Speaker 3: know where services need to follow those population projections.
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  Speaker 2: So it probably Auckland, yeah.
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  Speaker 3: I mean certainly the areas of large population growth, yes,
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  Speaker 3: But actually when you look at it is this is
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  Speaker 3: something that you know of all of the services that
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  Speaker 3: we look at. This is one for all of New
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  Speaker 3: Zealand actually broad based aging.
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  Speaker 2: Are there parts of the country though, where we are
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  Speaker 2: seeing population declines to the extent that we should actually
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  Speaker 2: stop investing money and infrastructure.
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  Speaker 3: Certainly, when you look at the periphery of many of
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  Speaker 3: the networked infrastructure we have, it's clear that at the
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  Speaker 3: at the ends of the of the network the financials
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  Speaker 3: are most difficult. Now, I don't think for a second
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  Speaker 3: that means that we should stop providing services to those areas,
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  Speaker 3: But what the plan does say is that the network
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  Speaker 3: as a whole needs to be able to fund it. Right,
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  Speaker 3: that you can do cross subsidies, that's fine. But suddenly
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  Speaker 3: when we're looking at you know, resilience issues, the balance
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  Speaker 3: between what is making money on the network and what
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  Speaker 3: probably needs money tipped into it is getting harder, and
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  Speaker 3: you know, like local governments at the leading edge of that,
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  Speaker 3: they see that day to day it's getting harder.
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  Speaker 2: Why is it that we spend more money on infrastructure
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  Speaker 2: as a proportion of GDP than anywhere in the developed world,
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  Speaker 2: but we still have this massive deficit in infrastructure.
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  Speaker 3: I think, I mean, it's a very good question on
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  Speaker 3: the first one, and in part the answer to this
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  Speaker 3: is the fact that we are on a very narrow
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  Speaker 3: band of land the bottom of the South Pacific. We're
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  Speaker 3: a country of five and a half million people. We're
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  Speaker 3: roughly the same size as great as Sydney, but we
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  Speaker 3: are trying to build out infrastructure networks on a parcel
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  Speaker 3: of land that is twenty one times larger. Right, So
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  Speaker 3: the geology, the geography is very difficult, and we have
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  Speaker 3: a dispersed population. That means more pipes, more roads, more
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  Speaker 3: transmission lines and so on, and that costs if you're
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  Speaker 3: going to do that, you know, so there are some
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  Speaker 3: things that are baked in, but of course you know,
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  Speaker 3: on the other side of things, clearly we need to
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  Speaker 3: try and do this in a way that is more
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  Speaker 3: cost efficient than what has been in the past, because
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  Speaker 3: you know, if we need more hospitals, you know, we
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  Speaker 3: can't afford to do them at two to three billion
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  Speaker 3: dollars per facility. We can't afford roads that are costing
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  Speaker 3: four hundred million dollars per kilometers. So you know, this
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  Speaker 3: is why the plan talks to the urgency of getting
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  Speaker 3: resource management right and identifying opportunities to bring down those.
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  Speaker 2: Costs right, Jeff Listen, thanks for talking to us about
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  Speaker 2: I appreciate it. Jeff Cooper, Infrastructure Commissioned CEO.
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