Infrastructure boom or bust?


Former National Party M.P., Minister for Economic Development and one time Treasurer in the Government of Prime Minister Bill English, Steven Joyce believes that it is necessary for the Government to spend more to stimulate the economy. The comments from Mr Joyce come amid an increasingly turbulent global outlook and signs that the New Zealand economy may be about to stall.

I find it interesting that Mr Joyce, from a party that is traditionally against government intervention in the economy especially where it comes to significant expenditure, seems keen on this Government spending more to stop the economy from stalling.

It is not that I necessarily disagree either, though my preferences for spending priorities will be rather different to his. Mr Joyce and the National Party had a road building programme called Roads of National Significance that they focussed their transport policy on at the expense of other transport modes. $12 billion was set aside for new motorways and extensions of existing ones, particularly around Auckland, but also with significant projects in Christchurch and Wellington.

Whilst some of the projects were definitely needed like the four laning of State Highway 1 from Belfast to Templeton, there were other motorway projects of questionable need which were constructed north of Auckland. If the money had to be spent on roading, there are three potential alternative projects in the South Island that could have gone ahead would have been:

  1. Either a second one lane bridge over the Hurunui River in north Canterbury on State Highway 1 or the addition of a second lane to the existing one;
  2. Making State Highway 70 better able to take trucks, thereby keeping them off the southern part of the coastal stretch of State Highway 1
  3. Replacing the one lane bridges over most West Coast rivers with two lane structures or building a second single lane one next to the existing structure

However a much more meaningful project would be to upgrade the South Island segment of the Main Trunk Line. This would be a useful alternative for freight that might otherwise end up on trucks that cannot or should not be navigating South Island roads, in particular the Kaikoura coastal stretch and the alpine passes. But how much thought have either party given to this? Probably not much.

The Government and National both say that they are concerned about the cost of petroleum to the consumer, but neither have bothered to explore the possibility of biofuel using waste stream product. I have mentioned potential cooking oil and fat, but there may be other sources in the waste stream as well. Depending on the feasibility this could be a potentially significant revenue and job creation scheme – researching the feasibility; developing a blend; getting it tested and certified; finding potential investors in it. The waste stream will not be disappearing any time soon given our consumption habits and the unwanted refuse it creates.

Another idea that has been subject to criticism of late is developing Waste to Energy plants. One mooted for the West Coast has run into trouble after it was found that the Mayor of Buller District Council had gone behind his council to see if it was possible. Whilst I support the possibility of a waste to energy plant, the N.I.M.B.Y.ist under current starting to appear suggests resistance would be strong and not necessarily founded on fact.

So, yes, there are things the Government could invest in, but they might not be what Mr Joyce was thinking.