Infrastructure Bill

Hon STEVEN JOYCE (Associate Minister for Infrastructure) Link to this

I move, That the Infrastructure Bill be now read a second time. The Infrastructure Bill is an omnibus bill in four parts, covering three areas: changes to utilities’ access arrangements to transport corridors, changes to the New Zealand Railways Corporation Act 1981, and the repeal of the Affordable Housing: Enabling Territorial Authorities Act 2008, with the retention of an amended restrictive covenants provision related to social housing.

The Transport and Industrial Relations Committee received 37 submissions from a wide range of organisations, which represented the interests of the three areas the bill covers. The majority of submissions focused on the proposed changes to arrangements for access to transport corridors by utility operators such as power and telecommunications companies. Most submissions were very supportive of the aims of these parts of the bill, and offered constructive suggestions to improve them. Three submissions commented on the changes to the New Zealand Railways Corporation Act, and were supportive of the changes proposed.

Several submitters on Part 4 of the bill, which repeals the Affordable Housing: Enabling Territorial Authorities Act, expressed general concerns about the affordability of housing, and noted that repealing that Act without any indication of an alternative approach to addressing housing affordability was unsatisfactory. However, Local Government New Zealand and the six territorial authorities that made submissions on Part 4 have suggested that, rather than improving housing affordability, the Affordable Housing: Enabling Territorial Authorities Act would, if implemented, increase the cost of housing in the current market. Further, the building sector raised concerns about increased complexities and delays as a result of that Act, and that is why we are repealing it. In addition, proposed changes to other legislation such as the Building Act and the Resource Management Act will be more effective in simplifying processes and reducing the costs of housing development, thereby helping to improve housing affordability.

Restrictive covenants are a growing barrier to the integration of social housing in communities. The majority of submitters, including territorial authorities and non-governmental organisations, were supportive of retaining this provision through an amendment to the Property Law Act 2007. These covenants unfairly discriminate against some of our most vulnerable people, such as older people, children, and people who require assisted living, such as IHC clients.

I thank the members of the Transport and Industrial Relations Committee for the work they have done in strengthening this bill. I support the changes that have been recommended. Many of these were of a minor nature or drafting nature, but I will briefly outline the more significant changes, which relate solely to utilities’ access rights. Although all utility operators have the right to do work on local authority roads, local authorities can impose reasonable conditions on the utility operators when undertaking those works. Local authorities should not be able to use road-opening processes to require utilities to do something that benefits the local authority at the utility’s cost. Where a local authority would like to impose such a condition, it should pay the increased cost of the condition, and the area should be identified in advance.

The intent of clause 21 and parts of clauses 30 and 32 of the bill is to restrict the ability of local authorities to impose conditions that create additional amenity value beyond the current amenity value of the area. Submitters’ concerns with the clauses as originally drafted were that they would restrict local authorities’ ability to maintain the amenity value of certain roads and would increase the cost to local authorities in doing so. These clauses have been redrafted to better reflect the intent.

Part 1 of the bill establishes a framework for a national code of practice governing how utility operators and corridor managers coordinate their activities. Several submissions identified the need for a code management body. The bill takes the approach that there is no requirement for a code, but if industry participants see value in having one, then it can be developed. Mandating a code management body would add a degree of compulsion beyond what is intended.

There is an inconsistency between the various utility Acts covering the activities of operators, effectively giving telecommunications operators more rights of protection over their assets than electricity and gas operators have. For example, the Telecommunications Acts allows only local authorities to impose conditions on telecommunications operators, but the Electricity Act and the Gas Act allow local authorities and other utility operators whose assets are being moved to impose conditions on electricity and gas operators. The majority of submissions on this issue supported removing all utility operators’ abilities to impose conditions on each other. Instead, utilities can create standard conditions that apply to corridor managers and utility operators through the mandatory code of practice. The bill has been amended to remove all utility operators’ rights to impose conditions on each other, by amending the Electricity Act and the Gas Act to make them consistent with the Telecommunications Act.

Several submissions recommended minor amendments clarifying the current cost allocation provisions that apply when a corridor manager requires a utility’s assets to be moved, such as when a road is being moved or realigned, or when the New Zealand Transport Agency requires a utility to move its asset because it is unsafe. The current cost allocation provisions in the Electricity Act and the Gas Act, which the bill copies into the Telecommunications Act, apply a causer-pays principle—the causer of the work pays for the total cost of the work. However, the provisions have an exception that provides for utility operators to share most of the cost when a controlling authority causes the work: the utility must pay for the fittings, and the controlling authority pays for the actual work done.

Submitters suggested that ambiguity arises from who constitutes a controlling authority. The prevailing interpretation is that the term “controlling authority” applies to the New Zealand Transport Agency only. However, the definition of “controlling authority” in section 54 of the Government Roading Powers Act includes local authorities. Submitters said that the term is ambiguous and should be clarified. The reference to fittings is ambiguous and causes disputes. Submitters said that it should be clarified. The provisions do not allow any claims for betterment. One submitter was unsure whether this meant that there could be no claim whatsoever, or that the claimer must pay the increased cost. The submission was that claims for betterment should be allowed but that the costs should lie where they fall. Changes to the bill have been made to address all of those concerns.

Currently, utility operators have no right of access to the rail corridor. KiwiRail has powers under the New Zealand Railways Corporation Act to grant and revoke easements under any conditions, including requiring the payment of rent. Utilities have a right of entry at level crossings only, where a unique regime applies, with application for access being determined by the District Court. Submitters pointed out that the amendments to the Railways Act in the bill recognised that the rail corridor was underutilised and that the current amendments do not go far enough towards enabling greater use of the rail corridor by utilities. KiwiRail cited fundamental differences between road and rail, especially in the way that it operates—particularly its inability to divert traffic—and safety concerns as reasons why the current arrangements should remain in place. The bill will go some way towards addressing these concerns by requiring all corridor managers to publish their criteria for access to corridors and to respond in writing within 30 days to an access request. The code of practice can also assist by facilitating greater cooperation.

A review of the New Zealand Railways Corporation Act 1981 and the New Zealand Railways Corporation Restructuring Act 1990 is currently under way. This work programme will consider the matter of KiwiRail’s powers in relation to granting and revoking easements on railway land.

Only minor technical or drafting changes were made to the remaining parts of the bill, so I do not intend to cover those. I intend to introduce at the appropriate time two Supplementary Order Papers, with the first dividing the bill into four bills, to better reflect the Legislation Advisory Committee’s guidelines—

Hon SHANE JONES (Labour) Link to this

Kia ora tātou katoa. I rise to speak in favour of the Infrastructure Bill, but, as our whip has said, I do so with a heavy heart. The bill has been stripped of the most important dimension, because it has been decided that infrastructure does not include the most valuable commodity, which is shelter. Without allowing for a transparent process, this Government has circuitously stripped out a very innovative approach to housing, an approach that required councils, when they were dealing with their resource management schemes and planning provisions, to impose on developers—perhaps many of whom created the leaky-home drama—an obligation to the wider community. Unfortunately for all home seekers and the broad community, this Government has sold them out. We are prepared, however, in the spirit of driving forward infrastructure, to overlook such an egregious failure.

That causes me now to come back and identify why this bill will be supported by Labour. There is very little debate that we must create an improvement in our productivity and also in our levels of innovation, much of which is related to the concept known as agglomeration. That is a concept that says that where networks of people and capital are concentrated in an area—otherwise known as a city; soon to be called a super-city—entrepreneurialism, development, and creativity will flow. Infrastructure undergirds much of what we hope to see as a consequence of more people being able to make innovation. For that reason, infrastructure is regarded by members on this side of the House, beyond cavil, as an essential ingredient in enabling our country to achieve its full potential. We do not indulge ourselves in foolish, vacuous statements, such as those about catching up with Australia. We are more interested in husbanding our indigenous resources, developing our own people, and isolating those areas of infrastructure that will create a real step change. Real change is not about funding seven highways, or suddenly announcing an upgrade to the Kōpū Bridge so that it can bear the weight of the trucks that will be carrying the new, hitherto unknown, undisclosed bounties of mineral wealth that have never before been placed before the nation.

Let me come back to the bill; infrastructure is a key ingredient in such broader debates, and this is the Infrastructure Bill. Let us focus for a moment on the usefulness of a code. There is a potential contradiction in the notion of a code being enforceable at District Court level yet being an exercise in voluntary participation. That is not the Government’s usual style; its usual style is forced participation. We look forward, as a consequence of this bill, to participants in the infrastructure industry being able to cobble together a usable code, but there is provision if they fail the test. Apparently they are all focused at the moment on seeking opportunities in those fairly foul beasts known as council-controlled companies, in Auckland, which are largely the handiwork of the Minister. However, it is important that a code comes into place so that the red tape that has afflicted this area of the economy can be sorted out in the confines of that code. When we have participants who either will not play by the rules or who will gain from the rules, then there will be the opportunity for them to be policed and for them to be corrected.

As members know, one of the reasons why infrastructure will be roundly supported by us is that we saved Auckland from gridlock. We did that by laying down foundation planks for a long-term strategy invested in public transport, but it is sad that up and down the country every provincial council is being starved of money for pubic works. Indeed, one of my councils in the Tai Tokerau, the Kaipara District Council, has complained bitterly to us about its cutbacks, which are being made in order for the current Minister of Transport to rebuild the Kōpū Bridge to bear the weight of a vicious mining exercise, where apparently there will be no need for diggers, no need for trucks, and no need for carrioles; all that will be needed are needle-like precision cuts into the side of a mountain, and then in some way “Dr Spock”—the physical character represented by the Minister on occasions—will spirit away all the minerals. No, it will not happen like that. That is why public transport is being starved, but the provision of public transport requires a very efficient process of allocating scarce resources; I tell members that this is a sensible contribution in that regard. Provincial councils are being starved, and this bill has little to say, unfortunately, as to why they are being put on an ugly diet—something, perhaps, that ACT Party members ought to have been put on, or could be putting themselves on, but that is another matter. So the code is important, and Labour agrees with it, but we do put on record our considerable concern with this fixation on highways, and with the deprecation of the importance of public transport.

We are also concerned about the winding down of our railway system. We know that Mr Steven Joyce and other members are antagonistic towards KiwiRail. The reason that rail corporation provisions are being changed in this bill—and I direct the Minister’s attention to that; he and other Ministers have the ability to change the manner of appointment and the number of directors who are being appointed to the railways corporation—is that Ministers are shafting Jim Bolger, getting rid of him. That man is a great patriot. He breathed life into the Treaty of Waitangi settlement process. Despite some misguided views about a host of public policy issues pertaining to social matters, he has been gutted by the rat pack, led by that salesman of Brylcreem otherwise known as Steven Joyce. That is a business that will never ever prosper.

In relation to the attitude of local government to utility network providers, I say that local government has a great deal to answer for. That is why the previous Government elected to establish the royal commission. It is widely known that a pipe covering the distance across seven or eight local authorities in Auckland had to have its dimensions changed, and that slowed infrastructure down. What happened as a consequence of our royal commission—unfortunately hijacked by Rodney Hide—is that we became aware of infrastructure deficiencies. We laid down a pathway as to how they could be addressed, but this Government, although it talks loudly, acts very timidly. It has enraged those people who do not like its rhetoric, and disappointed those who are looking for bold action. But we know that the Government will be contested next year.

This bill is supported overall, but with the caveat that it has stripped the heart of social housing out of the infrastructure debate. As I said, that is an egregious failure but we are prepared to overlook it. Local government, working more effectively with investors in the utility scene and in infrastructure, can improve infrastructure outcomes, but not if that represents the degradation of public transport, the deprecation of KiwiRail, and the ongoing assassination, led by Tony Ryall and Steven Joyce, of that great patriot of right-wing politics from the King Country, Mr Jim Bolger. His name and reputation, unfortunately, are being besmirched both openly and secretly in Auckland by the current Minister of Transport. However, in the spirit of unity we are prepared to allow this bill to progress to the next stage. Kia ora tātou katoa.

DAVID BENNETT (National—Hamilton East) Link to this

The people of New Zealand and the members of the public who are listening this afternoon deserve an apology for that last speech.

MOANA MACKEY (Labour) Link to this

I am happy to stand and take a call in the second reading of the Infrastructure Bill. That contribution from the chair of the Transport and Industrial Relations Committee, David Bennett, would have been a lot more sincere if he had not been grinning the whole way through it. He might want to review the tape and reflect on how serious he seemed when he grinned the whole way through that speech while he criticised my learned colleague Shane Jones for his contribution. He claimed that Shane Jones was there just to fill in time. I think it was a little bit of a case of the pot, the kettle, and the colour black, which David Bennett might want to consider for his next foray into this House.

I will focus on Part 4 of this legislation. It deals with the repeal of the Affordable Housing: Enabling Territorial Authorities Act, which Labour introduced in our previous term of Government. The first thing I will say about that—and I would like the next National speaker to comment on this—is to ask why that particular move was included in the Infrastructure Bill. Why? It is not the natural place for people who are interested in that legislation to look to find that measure. When people saw that the Infrastructure Bill was before Parliament, I doubt that it would have occurred to them that the affordable housing legislation was being repealed as part of the Infrastructure Bill.

When we were going through the process of the select committee submissions, where Labour and Green members raised concerns about some of the changes in that respect, we had people contact us to say that they had no idea that it was happening because they did not know to look to the Infrastructure Bill for the repeal of legislation on affordable housing. I think the Government needs to answer that sincere question, because it appears to me that it was hiding that change in this infrastructure legislation. It has no place in this legislation. Not only that, but that particular part of the bill should have gone to either the Local Government and Environment Committee, which heard and dealt with the original legislation, or the Social Services Committee, which deals with housing. The Transport and Industrial Relations Committee was not the proper forum for—

GARETH HUGHES (Green) Link to this

Kia ora. Ngā mihi nui ki a koutou. Kia ora. I am happy to take a call on this important issue and mostly common-sense bill. This is the first piece of legislation that I have seen through the House, and although my colleagues would agree that it is probably not the most glamorous bill, it is an important one.

Before I touch on the specific parts of the Infrastructure Bill, I would like to discuss the role of infrastructure in general. Infrastructure is an important part of economic, social, and environmental development. Good planning can see positive outcomes, whereas bad planning in infrastructure can see us slip down a path of diminishing prosperity, negative social outcomes, and declining environmental health. Earlier this month the Government launched its plan to invest $18 billion into infrastructure over 10 years. It announced five priorities: broadband, electricity, regulatory reform, roads of national significance, and the Rugby World Cup 2011.

The Greens believe that those are important areas to focus on. However, on each point, we strongly differ on the path the Government has gone down. Just looking at the roads of national significance, in particular—or as I call it, the roads to no sustainability—the plan includes a future spend of $9.6 billion on only seven roads and a further $13.5 billion of spending on other roading projects. That is a huge part of our national wealth. For rail, however, there is no new spending. This Government is putting all of our bets on roads. Many of the seven roads of national significance represent very poor economic decisions. For example, the $2 billion Pūhoi to Wellsford holiday highway has a benefit-cost ratio of only 0.8, and the Transmission Gully “white elephant” motorway has a benefit-cost ratio of only 0.6. Those roads of national significance are gambles and are politically driven, rather than being based on sound economic analysis. They will lock us into a high carbon future, do nothing to help our climate change effort and nothing to assist with our valuable “clean, green” brand, and act as expensive millstones around our necks as the price of oil inexorably rises.

Why would the Government place all our bets on roads, as a measure to reduce congestion, when all the local and international experience shows that it just does not work? Under the previous Budget, for every dollar spent on sustainable modes of transport, like buses, trains, walking, and cycling, National will spend $7 on roads. It is simple economic mismanagement. The Greens would spend money on roads, for sure, but roads are actually not the priority in the short to medium term. We would favour a more balanced investment approach, especially in places like Auckland, where the economic costs of congestion are stifling. Sixteen percent of Auckland’s wealth is spent on transport, compared to 6 percent in Europe and other Asian cities that have a more balanced investment approach to mobility. If members look at the actual investment this Government is planning for transport infrastructure, they will find that it is not an exaggeration to say that this Government is hysterically pro-roads.

The Greens plan to give Kiwis a choice about how they will get to work, not sentence them to greater levels of automotive dependence. Our recommendation for transport in our Green New Deal package is fiscally neutral. In the short term we would shift $1 billion of State highway funding into more sustainable, more productive, and higher quality alternatives, thereby taking the pressure off our alternative roads. Our measures would create 40 percent more jobs, while at the same time making our transportation network more resilient to the inevitable oil price shocks. This is a real jobs package. That is what a Green New Deal looks like—delivering a smart road to prosperity. Even though the Government is doing very little to tackle climate change, at least in the infrastructure plan it touches on it to a small degree.

I will now turn to the bill before us. The Greens voted for this bill at its first reading on the whole because it is simple common sense. As Jeanette Fitzsimons said in the first reading, there is a huge amount of waste when there is no coordination, no planning, in terms of combining the wires, pipes, and fibre in the same corridor. It is high time we attempted to bring about that kind of rationalisation. Like the TV show game that my son loves, in this bill, however, one of these parts is not like the other. Parts 1 to 3 naturally go together. Part 1 creates the framework for a consistent national code for access by utility operators to transport corridors. Part 2 harmonises the notice provisions across all the Acts, and requires territorial local authorities to pay for any amenity improvements when utilities are moved or upgraded. Part 3 cleans up the New Zealand Railways Corporation Act and harmonises it to management provisions with other State-owned enterprises legislation.

Part 4 is the odd one out; it is not like the others. It is like the proverbial square peg in a round hole. We can support the first three parts without too much reserve; they are sensible moves. I would place a wager, however, that if I have the privilege of being re-elected another couple of times, I may see Part 2 back before this House before I retire. I strongly suspect that the balance of costs is wrong. Part 2 disallows any amenity improvement requirements when work is undertaken, unless they are already outlined in the territorial local authority’s long-term community council plan. All costs must be borne by the local authority. This is in contrast to the current law that splits the amenity improvement costs evenly, unless otherwise agreed.

I turn to the odd one out, Part 4, which repeals the Affordable Housing: Enabling Territorial Authorities Act 2008. The Green Party thinks it is a good move to separate this out into its own bill, thereby avoiding the accusation, which this Government could have previously been labelled with, that this is a cowardly move to hide the sneakily significant repeal of affordable housing provisions. This part should stand alone as its own bill. As referred to in the Labour Party and Green Party minority report, we believe that this part should have been referred to either the Social Services Committee or the Local Government and Environment Committee.

Housing affordability is a major issue in New Zealand. Close to one in three New Zealanders now spend 30 percent of their disposable income on housing; 30 percent is the internationally agreed benchmark for housing affordability. The Demographia 2009 International Housing Affordability Survey found that the median house price in New Zealand is 5.7 times the median household income, ranking New Zealand in the category of “severely unaffordable”, and with only Australia worse at 6.0. But, on the bright side, I guess we are catching up with Australia in one respect. It is especially pertinent for people of my generation, people like me, who come out of university encumbered by debt, and enter a housing market that has grown rapidly over the last decade, mostly to the benefit of baby boomers and those people already on the property ladder. The market has not been slowed by sensible moves, such as a capital gains tax, or revisiting the tax rules on loss attributing qualifying companies. Loss attributing qualifying companies allow people to offset their losses in investment properties against personal tax income. It means that young people trying to get into the housing market are effectively subsidising the tax offsets of people who are buying investment properties using loss attributing qualifying companies. This is wrong, and pernicious.

When looking at housing affordability in the context of infrastructure, we need to be doing more around transport corridors to encourage increasing densities in urban centres, rather than adding more urban sprawl. Although the Greens supported the Affordable Housing: Enabling Territorial Authorities Act in the previous Parliament, our support for it was lukewarm. We did not think it would be particularly effective in achieving its stated objective of making housing more affordable. As it turned out, no territorial local authority made use of the enabling provisions in the Act, so it is not terribly disappointing to see the bulk of the legislation repealed. However, the Greens strongly supported the part of the Act that prohibited restrictive covenants that aimed to exclude social and affordable housing. We are disappointed that the Government has decided to water down those provisions and to remove the prohibition of restrictive covenants that aimed to exclude affordable housing. As Moana Mackey pointed out, I think the Government was relying more on the recession to see house prices drop so significantly that the issue of affordable housing would go off the boil. The fact is that housing prices have not dropped, and working families are still locked out of the housing market.

We are facing a housing crisis. There are 10,000 people on the waiting list for State home rentals. In order to afford a home, people are being forced further and further out of the city and town centres, but meanwhile they are spending considerably more of their pay packet on transport. I predict that the homelessness survey, which is expected to come out in June, based on Australian estimates and similarities, will see tens of thousands of Kiwis classed as homeless. We support Parts 1 to 3 because we believe they are common sense, but we have grave concerns about Part 4. Kia ora.

JOHN BOSCAWEN (ACT) Link to this

I was not intending to take a call on the Infrastructure Bill, but the speech we have just heard from Gareth Hughes has motivated me to do so. The ACT Party will be supporting this bill, which, according to the commentary on the bill, “provides for a new Utilities Access Act, and makes a number of amendments to several Acts to remove a number of legislative barriers to infrastructure development.”—and, certainly, do we not need those barriers to infrastructure development to be lifted? This is an omnibus bill of four parts, and it covers three areas. It covers changes to utilities’ access arrangements to transport corridors, makes changes to the New Zealand Railways Corporation Act 1981, and repeals certain aspects of the Affordable Housing: Enabling Territorial Authorities Act 2008.

As I said, I want to comment on Mr Hughes’ speech, because he preceded the main part of his speech by making some general comments on infrastructure, and those comments cannot go unanswered. It always fascinates me when people stand up in this House and criticise the Government’s decision to build roads, because by far the most common form of public transport is the bus. The last time I checked, buses travelled on roads.

RAHUI KATENE (Māori Party—Te Tai Tonga) Link to this

The relationship of tangata whenua to roads, rails, and motorways has been a long and painful one. The member’s bill on the acquisition of Māori land for public works that has been put up by my colleague Te Ururoa Flavell, the Public Works (Offer Back of and Compensation for Acquired Land) Amendment Bill, cites examples of what we could define as compulsory alienation. To put this contemporary bill into a historical context, I want the House to recall that by 1885 Māori land could be taken for roads and railways under the main provisions of the Public Works Act, or under the Crown right to take up to 5 percent of lands without compensation. Indeed, in a letter of 9 February 1928 to Sir Peter Buck, Sir Apirana Ngata suggested that the provisions for taking land without compensation for roads and railways did not end until 1927, when they ended as a result of Sir Apirana Ngata’s influence.

Other concerns were raised over the last 170 years about the damage that the impact of infrastructure development might have. In reports tabled by John Ballance—Minister of Lands and Immigration, Minister of Defence, and Native Minister in the Stout-Vogel administration—we hear of many of these concerns. Māori were concerned that traditional food sources such as eel swamps and berry trees might be destroyed. When valuable timber was cut, they wanted to be paid for it, and they wanted to benefit from participation in decision making over road routes.

Fast forward 120 years, and the concerns are similar but different. We must never forget that the history of this land will carry forward into our discussions of today. This context always shapes the thinking that we undertake in creating new solutions for old problems. The problems of either century are related to the unintended effects of the decisions we make about infrastructure. We all know that a strong infrastructure is vital to an economy that runs well. It is about facilitating the movement of people, goods, and information around our country and around the world. Effective infrastructure is all about servicing housing and households. It is a primary means of enhancing community life and keeping us all connected. But we must never get into a position where economic growth is of more importance than social, cultural, or environmental concerns.

In this light, the Māori Party supports improved public transport rather than investment in roading itself. We want to see more support for integrated public transport networks—buses, trains, and walking and cycling tracks. We are concerned about the impact of infrastructural decisions on our environment. In particular, we want to reduce our reliance on oil in the face of peak oil. We have a preference for transport and roading that is frequent, reliable, and inexpensive. We will continue to put forward the view that an approach to infrastructure that is focused only on future economic growth will only ever be a limited one.

Last year we were visited by Morey Wolfson, the utilities programme manager in the Colorado Governor’s office. For those whose main association with utilities is through landing on the “Water Works” space in the game of Monopoly, utility operators are those who manage electricity, gas, telecommunications, water, and waste water. This guy from Colorado had an interesting approach. He was motivated by five “E’s”: environment, energy, economy, education, and equity. He described this as the ecosystem of thinking. This type of thinking should be encouraged in all areas of infrastructure development. We are facing fundamental change and we need to be prepared on all fronts.

The Infrastructure Bill is about reducing inefficiencies in the legislation and preventing the disputes that create project delays and increased costs. It takes into account factors such as the safe and efficient flow of traffic, the health and safety of the public, and the need to lessen disruption to businesses and the community. Just as in 1885 there were varied and passionate views about the role of Māori participation, so too in 2010 we want to broaden the debate so we are talking about building up not only the nation’s hardware—such as hospitals, prisons, transmission lines, and electricity plants—but also the nation’s economic growth potential. It must not be fast tracked at all costs, placing stress on our environment or impacting on our capacity to live healthily and sustainably. We will support this bill in the interests of a broader debate.

Dr JACKIE BLUE (National) Link to this

I am pleased to speak to the second reading of the Infrastructure Bill. I would like to put some context around this bill and why the Government has seen the need to bring it to the House in the first place.

This bill follows on from a discussion paper on the state of New Zealand’s infrastructure, which was released last year. It was incorporated into the first national infrastructure plan, which was released this month. It was abundantly clear from the stocktake of key infrastructure issues and challenges last year that the Government had to get New Zealand infrastructure right, which means improving the quality of our roads, ensuring our electricity grid is up to speed, and increasing our broadband speed. The plan, which has a 20-year horizon, is part of a range of work aimed at improving the Government’s planning, decision making, and management of infrastructure in order to maximise economic benefits. To achieve this, the Government is investing almost twice as much over the next few years than was planned by the previous Government. The reality is that the Government is spending over $6 billion per year on physical assets and holds approximately $110 billion worth of such assets.

The plan will also support thousands of jobs. This will contribute to a stronger economy that over time will mean better wages and higher living standards for New Zealand families. This plan, like any plan, will only succeed as long as it can be implemented. The words must result in action, and that is why the bill is before the House today. This bill is an omnibus bill that will make substantive amendments to a number of Acts and repeal one Act. At the Committee of the whole House stage, this bill will be divided into two bills: the Utilities Access Bill and the Infrastructure Bill.

This bill is about maximising economic growth by developing critical infrastructure. It removes the unnecessary barriers to infrastructure development and improves the consistency between regulations. It is also part of our commitment to review regulation and remove red tape. The bill is in four parts. Parts 1 and 2 improve arrangements for managing access by utility operators, such as electricity, gas, telecommunications, water, and waste water to transport corridors. It was apparent during the submission process that there were a number of inconsistencies or gaps in legislation, and also in industry practice. We heard of inefficiencies, uncertainties, and disputes, leading to associated higher costs and delays.

Part 1 will clarify and improve the arrangements for managing access by utility operators to various transport corridors, such as roads, railways, and motorways. Most important, Part 1 establishes a framework for a national code of practice, governing how utility operators and corridor managers coordinate their activities. There is no requirement to have a code enforced. However, if there is no code suitable for approval and the Minister identifies a need for one, he or she may make regulations in place of a code. If a code is deemed necessary and the utilities’ operators and corridor managers cannot decide what the code should be, the Minister will.

Part 3 amends the New Zealand Railways Corporation Act 1981 to remove some of the statutory restrictions that negatively affect the running of the New Zealand Railways Corporation’s business. Part 4 repeals the Affordable Housing: Enabling Territorial Authorities Act 2008, although keeping an amended prohibition on restrictive covenants affecting social housing. The repeal of this Act is on the basis of the view that the Act was counterproductive and likely to reduce the supply of affordable housing. Local authorities have also been critical that the Act was complex, costly, and overly prescriptive. I am sure that these parts will be hotly debated in the Committee stage. I commend this bill to the House.

DARIEN FENTON (Labour) Link to this

I am pleased to have an opportunity to take a call in the second reading of the Infrastructure Bill. Before I get into my speech, I offer my congratulations to the Green member on his very useful contribution in his first contribution to debate on a bill in the House. As previous speakers have said, Labour supports this bill but we did not vote for Part 4 in the select committee. As other speakers have already outlined, we hope we will be able to address our concerns when we come to the Committee stage. It is also fair to say that even though we are supporting this bill, we have serious concerns about what this Government means by infrastructure development.

The purpose of the bill is to progress a suite of amendments to facilitate infrastructure development. However, given the scenario in Auckland at the moment, one has to wonder whether this is achievable. The population growth in Auckland makes the challenges of infrastructure, economic development, and good planning even more urgent. Unfortunately, Aucklanders are not having a real say in their future. By the way National and ACT are ramming through their version of a super-city, a narrow and influential elite will determine how Auckland’s infrastructure develops. What happens in Auckland has a major influence on the rest of the country. That influence will grow even more in the future. It is crucial that the many, not the few, determine how this happens.

The first part of this bill is about implementing a national code of practice, governing how utility operators and transport corridor managers coordinate their activities. We are talking about installing telecommunications, electricity, gas, and water along the roading and rail corridors of New Zealand. The Institute of Public Administration New Zealand, one of the submitters, described the current arrangement for the roading corridor as being effectively a commons where all parties have the absolute right of access without charge, subject to conditions. Roads are the commons of modern urban society.

Many of our utilities under the roads and rail corridor go back to the days when the Government owned the utilities operations and companies. The sell-off and privatisation over the years means that coordination and national consistency have become much more complex. These days, local authorities, the New Zealand Transport Agency, and rail licence access providers are all corridor managers. The councils own the road corridors, but they cannot stop people digging it up. One submitter told us that they literally do not know what is under the ground in some parts of the country in the corridors, which makes the job of the local authorities very difficult indeed. At the select committee there were plenty of complaints from utilities managers, as well. Coordination and national consistency were described to the select committee as the Holy Grail, but I think that is a big ask in any legislation. To be honest, I am a little bit cynical because apparently this code has been under development for many, many years by the New Zealand Utilities Advisory Group. There appears to have been some falling out of some of the parties, and some do not participate, at all.

Although there was general support from utilities operators for an industry-led code, an agreement about the need to make arrangements as consistent as possible across utilities and corridor managers, local authorities had more reservations and concerns. Several submitters thought the bill could go further in making arrangements more consistent, but there is definitely a divide in opinion between utility operators and corridor managers on several issues.

Utility operators have rights of access to local authority - controlled roads, but that has to be balanced against corridor managers’ responsibilities for controlling the road. Corridor managers need to have the ability to direct how the work is done, as they are responsible for that amenity, for the safety of the public, and indeed for the contractors who are doing the work. The code will include rules setting out how work must be done, which will give utility operators the ability to ensure that work is done in a way that does not damage their assets.

A code can be prepared and presented for the Minister for approval by anyone, although I have to say that this was queried by the select committee. It seemed strange to us that just anyone could be preparing a code. However, the bill requires proper consultation and for the code to be broadly agreed to by the relevant corridor managers and utility operators, and to reflect a balance of interests between corridor managers and those operators. The select committee has made a number of recommendations with regard to the strengthening of the enforceability of the code, which Labour supports.

Since this bill was introduced, many questions have emerged about transport infrastructure in Auckland. Aucklanders are very concerned about the role and the undemocratic nature of the powerful new Transport Agency in the Auckland super-city. There have been warnings that Auckland’s local roads are likely to suffer in the mix between the Government’s control from Wellington and its desire for the so-called roads of national significance, of which there are three in Auckland. The fact that the agency is required to deal with all roading issues, including whether there are speed bumps or better footpaths in local streets is, quite frankly, bizarre. Eighty percent of the work of community boards in Auckland is street related: footpaths, car-parking, slow roads, bus shelters, traffic conflicts, and so on. Yet all this, plus the determinations of the huge asset of Auckland’s transport infrastructure, is being handed over to an unaccountable group of Rodney Hide’s mates.

I am foreseeing that transport will be a huge election issue this year, come the super-city elections, and it will be interesting to watch how the candidates, including the mayoral candidates, play out their competing promises in the campaign. It is hard to see, however, how the new mayor and those who are elected to the new Auckland Council will have any power to actually implement their transport policies. Since this bill was introduced we have had the grand infrastructure plan, and I have to say it is great to talk about roads and railways and other things. The part that is always missing for me in any infrastructure plan that comes from this Government is the people element. Surely people are part of our infrastructure and skills, and education. It does not seem so. I do say that we now know why the Kōpū Bridge was rushed through, with the mining announcements we have had in the last couple of days.

At the same time, there is increasing uncertainly around the Government’s commitment to rail, with closures of some regional lines in the wind. A number of utility operators complained to the select committee about not having as-of-right access to rail corridors, saying that it inhibits their ability to develop infrastructure. It was explained to the select committee that the rail corridor is different from the roading corridor. It has specific health and safety requirements. KiwiRail and ONTRACK are responsible for workers and contractors. There are few alternative routes, and most of the network is a single track. So we are pretty concerned that Steven Joyce is planning to mothball some parts of the rail network as a precursor to the sell-off of KiwiRail in the second term—

Hon TAU HENARE (National) Link to this

It is a pleasure to be able to follow my cousin, Darien Fenton. The development of infrastructure is central to New Zealand’s productivity and improving its future economic growth. Improving the consistency of the regulatory arrangements for infrastructure development, streamlining governance, and removing regulatory barriers all contribute to improving the time lines for providing infrastructure and to reducing the cost of infrastructure development. The Infrastructure Bill removes the unnecessary barriers to infrastructure development and improves the consistency of regulatory arrangements.

I want to quote a very, very fine British Prime Minister, Gordon Brown, who is oft heard to say “not the few but the many”. I think this bill is about the many. This bill is about how we get, after 9 long years of—

CAROL BEAUMONT (Labour) Link to this

I rise to speak in support of the Infrastructure Bill, but I do not support the repeal of the Affordable Housing: Enabling Territorial Authorities Act. It seems to us that we may have the opportunity to deal separately with Part 4 of the bill, which repeals that Act, and that would be very good.

I am delighted to have heard the contribution of my colleague Tau Henare. That was fantastic. It is great that he has seen the error of his ways and taken on board Labour’s view; that is, “for the many, not the few”. I expect to see him joining us on this side. That is just wonderful to see.

I will talk about the submission process because I, along with others in the House, was one of the members of the Transport and Industrial Relations Committee, which dealt with the Infrastructure Bill. We received and considered 37 submissions from interested groups and individuals, and of those we heard 14 submissions. Generally they were quite technical submissions from various authorities that deal with the infrastructure area—planners, engineers, and the like. We received advice from Treasury, the Ministry of Economic Development, the Ministry of Transport, and the Housing New Zealand Corporation. I would like to take the time to acknowledge those officials for their assistance in working through this bill. It was a reasonably complicated bill to deal with because it addresses a number of Acts. The Infrastructure Bill tries to pull those together.

As members are aware, the bill was reported back in November last year. Gee, what a lot has happened since then! We have seen the accident compensation scheme gutted—and that is just the start, according to the Minister. We have seen a rise in GST signalled. We have seen the third Auckland governance bill—and I will come back to that, because, as my colleague Darien Fenton said, that legislation overlaps very strongly with what we are trying to do with this Infrastructure Bill. Most recently, we have heard about mining in sensitive areas—those areas protected under schedule 4 of the Conservation Act, including the Coromandel and Great Barrier Island. So a lot has happened since the Infrastructure Bill was reported back to the House.

The submissions led to a number of changes being made to the bill. As the Minister said, some of those are quite technical, and some are substantive. I will address some of those changes as I go through. The bill effectively provides for a new Utilities Access Act and makes a number of amendments to several Acts to remove a number of legislative barriers to infrastructure development. I say that infrastructure development is ultimately still about people. We are looking at transport corridors—moving people or moving freight to get it to where people need it to be, in order to provide the sorts of jobs and an economy that will support and sustain New Zealanders. The bill has four parts that cover three main areas. Part 1 deals with changes to arrangements for utilities access to transport corridors, which, as I learnt in hearing all the submissions, is a very important mechanism for ensuring that we can upgrade and maintain our utilities. Those transport corridors are fundamentally important, because they provide the opportunity to upgrade without having to damage residential or industrial infrastructure that is already in place. Part 2 deals with changes to the New Zealand Railways Corporation Act 1981, and Part 3 repeals the Affordable Housing: Enabling Territorial Authorities Act 2008. I will come back to the latter one, but, as I have already said, Labour opposes that repeal.

This bill allows the Minister to approve a code of practice for processes relating to access to road, rail, and motorway corridors. The changes to the New Zealand Railways Corporation Act are about aligning that corporation’s governance arrangements with equivalent provisions in the Crown Entities Act 2004. I will come back, as I said, specifically to the affordable housing legislation.

In relation to utilities access, I note that this work was begun under the previous Labour Government, and, indeed, was considered by Cabinet in 2007. It was because there had been inconsistent application of “reasonable conditions” being put on utility operators like electricity, telecommunications, water, sewerage, drains, and gas operators when they were seeking to exercise their right of access to roads and so on. Local authorities generally, as road-controlling organisations, say there has been poor-quality reinstatement of roads by utility operators and concerns about inconsistencies between statutes, thereby creating advantages for some operators over others. The bill, in part, seeks to make the legislation consistent for all utilities, and provides a legislative process to give legal status to a stakeholder-created code for utilities companies for managing access to roads, motorways, and rail corridors. I want to explain that inconsistencies include notification requirements prior to work commencing, the allocation of costs when installations are moved, and the criteria for setting reasonable conditions on the works by those with jurisdiction over the transport corridor, whether that be a local authority, the New Zealand Transport Agency, or Railways Corporation.

Those inconsistencies can play out very badly for local communities. I will give members an example from a community I am working in. This is from the Onehunga Community News of July 2009, which is a very good monthly publication. It keeps a really close handle on what is going on locally. The Onehunga Business Association manager, Amanda Kinzett, was quoted talking about work that was happening on Princes Street in Onehunga—which, coincidentally, is where my office is located. She talks about being taken unawares on a particular Friday evening in April when she saw roadworks taking place on Princes Street, when there had been no notification of the work to be carried out. After some phone calls she discovered that Fulton Hogan was resurfacing the road. That was OK; fair enough. A number of delays led to the roadworks commencing on 11 May. The job was due to take 3 days but, due to inclement weather, that was not the case. Interestingly enough, “In a turn of events which in its way is fortuitous, a Vector employee”—this is where it gets interesting, everybody—“was driving past the works, noticed the upheaval and recollected”—went “ding!”—“that Vector was due to carry out work in the area. This work was brought forward, which delayed the resurfacing another couple of weeks, but did avoid the road being resurfaced and then having holes dug in it. Apparently”—and this is the bit that relates to the Infrastructure Bill—“Auckland City is supposed to have a system whereby this type of work is notified, to avoid, for example, roads being dug up by successive contractors. It appears that this system has its faults. As we go to press”—in July last year—“the work has taken six weeks,”—not 3 days—“capped off with two burst water mains and a burst gas main.” This bill is about trying to stop some of those things happening, by ensuring that the code of practice requires notification by utilities operators to each other. It means, for example—and this is one of the bill’s provisions that will be changed as a result of the select committee’s work—that the code will require coordination of work between utilities operators, including how utilities operators deal with corridor managers as well as other utilities operators. That was illustrated by my Princes Street example, where we had gas, water, electricity, and roading all through that one street in Onehunga. So we are certainly supportive of that change. Clearly, those sorts of situations are not acceptable. They caused considerable loss to businesses in Princes Street, and are just unacceptable in a modern society that is trying to improve infrastructure.

I am aware that I am running out of time, but I want to just talk briefly about the implications of changes to Auckland’s governance. Unfortunately, although this bill puts in place many good provisions around infrastructure, because we will be facing a super-city with authority taken away from elected representatives and in the hands of corporate bodies, effectively—so-called council-controlled organisations—I think we will see a number of major problems with infrastructure. Everybody, from businesses right through to community organisations, for example, is opposing the new transport agency, and, clearly, they are key players. I will leave it there. Thank you very much.

ALLAN PEACHEY (National—Tāmaki) Link to this

I am pleased to be the member who will bring the second reading debate on the Infrastructure Bill to a close, and, in doing that, commend the bill to the House. Closing the debate gives me an opportunity to reflect on how the debate has progressed through the House. It started with a very, very clear and concise explanation from the Associate Minister that spelt out very, very clearly the reasons for the Infrastructure Bill, why it is required, what its significance is, and what it will do for New Zealand, and there is no reason why I should relitigate that.

Unfortunately the debate then took a turn for the worse. The Labour Party, instead of putting up one of its members who had been on the Transport and Industrial Relations Committee and knew what was going on—who had done the hard, grinding work—put up Mr Shane Jones. We all know that Mr Jones is the second assistant to the second deputy to the vice-captain of the Labour Party B team, and it showed. What an opportunity Labour members missed, right at the very start of the debate, to engage in debate with the Government on what the real significance of the Infrastructure Bill is. I had expectations that the debate would get better with subsequent Opposition speakers. It did marginally, in the sense that at least those speakers gave us a sort of a hint that, yes, the Labour Party sort of supported the bill. But then, instead of engaging in the significance of the bill, and engaging with the Government in a meaningful debate, Labour members had to throw in a whole pile of asides and irrelevant comments.

Why is it that when we on this side of the House understand that the development of infrastructure is essential to New Zealand—it is essential if New Zealand is to lift its national productivity—Opposition parties do not want to engage in a debate on lifting national productivity? If one thinks about that for a moment, the answer is obvious. After 9 long years of adhockery in the approach of the Labour Government to the development of New Zealand, this new National Government has had to get into top gear quickly and begin to get the infrastructure improvements that this country needs, and that is what this Infrastructure Bill will do. It will improve and expand the future economic growth and prosperity of New Zealand.

One has to ask why it is that Opposition parties do not believe in economic prosperity. If they did believe in it they would have engaged in a meaningful debate with the Government on the significance of this bill. This is a very significant bill for the future of New Zealand and its development. Historians will stand in awe of the huge steps that this country took forward after 9 years of lethargy as a result of the passage of the Infrastructure Bill through this House.

I was a member of the Transport and Industrial Relations Committee that held the hearings on the Infrastructure Bill. The committee worked very, very hard. I am bound to say that Labour members were generally cooperative and generally made a reasonable contribution. I have to conclude by saying that it is disappointing that Labour members on the committee did not bring the same positive attitude to the debate on the second reading we have had in this House. I commend the Infrastructure Bill to the House.