Steven Joyce: Why New Zealand struggles with infrastructure compared to Australia

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Auckland’s City Rail Link has cost far more than originally expected. Photo / City Rail Link
THREE KEY FACTS
Steven Joyce is a former National Party Minister of Finance and Minister of Transport. He is a director at Joyce Advisory and the author of the recently published book on his time in office, On the Record.
OPINION

There has been an outbreak of bipartisanship lately on
some of the big issues facing our country. Well, talk of it, at least.

Bipartisanship sits uncomfortably with democratic politics, which is first and foremost a contest of ideas. If there is too much bipartisanship, as arguably occurred during the pandemic, then you can end up with excluded and rebellious minorities, which this country experienced.
A lack of bipartisanship is also a problem though, particularly with long-dated issues that transcend any Government, such as with the provision of infrastructure, or the qualification age for superannuation. Overdoing the contest of ideas in these policy areas leads to constant flip-flopping, and nothing getting done.
When it comes to building transport infrastructure, we often look wistfully at Australia. There seems a much greater consensus there, for example, that both road and rail projects need to be built. The major parties in Australia might differ at the margin, but they also know it would be political death to sabotage the broadly agreed infrastructure programme, so things keep getting built.
It is not true to say we don’t build stuff here. In the past 20 years, we have built several big, new highways (too many for some), electrified Auckland’s commuter rail and expanded Wellington’s, all but built the City Rail Link, and completed a broadband network that appears to put Australia’s to shame.
However, since 2017, we have figuratively and literally gone off the rails, and wasted a lot of money by planning, but not building, stuff as political priorities have not just changed, but swung wildly.
What’s going on, and why is it so different to Australia?
It is my view the differences in each country’s approach to infrastructure partly comes down to our political systems and their makeup.
Australia operates a version of our old first-past-the-post system, where politicians are all elected to constituencies, although via a preferential system. That tends to accentuate the role of the major parties, and diminish the role of minor ones, such as the Greens and Pauline Hanson’s One Nation. Smaller parties tend to be visible mostly in the various upper houses around the states and federally, where they have less control over the purse strings and less likelihood of being part of Government.
Also, for better and often worse, the construction and other old-fashioned trade unions are much stronger in Australia than in New Zealand. They form a big part of Australian Labor, where here it’s the PSA (public servants) and the teacher unions.
That adds up to Australian Labor being much more development-focused than the New Zealand Labour Party. Australian Labor wants to build stuff, and they try as much as possible to ignore the Greens. Indeed, in my experience, they privately consider the Greens to be loopy.
Here we have MMP, where more often than not the tail wags the dog on both sides of the house. For New Zealand Labour, not only are the votes of the Greens often needed to be in Government, but they live in fear of the Greens hoovering up their votes on the left. They have Te Pāti Māori on that flank, too, which tends these days to be dominated by the anti-development end of Māoridom.
All of this helps explain why Labour in Government from 2017 to 2023 turned out to be so anti-roads. They adopted the whole radical Green Party transport policy, with its focus on light rail, raised pedestrian crossings everywhere, blanket speed limit reductions, and more cycleways than cyclists. Sure, Aussie Labor has a flavour of that, but nothing so radical as what we saw here.
And because the political pendulum always swings, we have now gone back the other way, on the back of a public fed up with finding it more difficult to get about their daily lives.
It’s clearly not just transport where we strike this problem. Superannuation has suddenly become topical again given Treasury’s concerns about its sustainability. Life expectancy has improved a lot in the past 50 years since universal superannuation was introduced, and we really need to do something about the retirement age, just to keep super affordable.
People often talk about opposition parties proposing change in this area and bottling it in Government, but that is not always the case. When Bill English became Prime Minister in late 2016, we proposed moving the retirement age out two years in 20 years’ time, starting in 2037. We believed that would address some of the long-term fiscal unsustainability of national super, while giving people plenty of time to prepare for the change.
Sadly, but unsurprisingly, Labour, after suggesting an age change was necessary throughout John Key’s premiership, took to opposing that proposal, even though the public was broadly onside. And of course NZ First deep-sixed it. The latter have at least been consistent.
Given we are not likely to change our voting system to accommodate the wishes of the infrastructure industry or the Retirement Commissioner, and that the political pressures we experience are likely to continue, is bipartisanship truly possible? What can we do about getting at least get a few important policy decisions extended beyond the length of the political cycle?
On the transport side, better use of the Infrastructure Commission would help. Encouraging it to be a respected independent sounding board which informs the public debate would make it harder for politicians to propose expensive wishlists out of left field. Better post-evaluations of what has already been built would also help answer the questions about what should be built next.
Regional deals could be helpful, too, as it would be a brave political party that seeks to overturn a regional deal agreed in the run-up to an election.
The retirement age thing is possibly harder, because there will always be votes in postponing that decision until it’s clear how irresponsible it is, by when it will be too late. It may be best to be kicked to a beefed-up version of the Retirement Commission, with the parties agreeing to sign up to the proposed solution.
Alternatively, the Labour Party might be genuinely interested in differentiating themselves from their smaller brethren. After all, signing to an agreed position between the major parties that acknowledges the demographic reality of our ageing population would both look like, and be, the responsible decision that elevates them above the Greens and others and perhaps even convinces some in the broad middle they are on their way back again. Now, that would be MMP in action.
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