4. Hon BILL ENGLISH (Deputy Leader—National) Link to this
to the Minister of Finance
Why does the Government now consider the Waterview Connection to be a potential candidate for a public-private partnership?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
Because it is a project of significant scale. Indeed, it is the largest single roading project that we know of to make a public-private partnership a viable option, because it may allow us to complete the project earlier than if it were funded from the National Land Transport Fund, given the pressures on that fund.
Does the Minister recall that late last year Labour ruled out the use of public-private partnerships in any form, in order to score a political point on the day, and, in fact, one Minister said Labour would die in a ditch to prevent any public-private partnership from being used in New Zealand?
Hon Dr MICHAEL CULLEN Link to this
I think that could be described these days as an academic question.
Martin GallagherHon Dr MICHAEL CULLEN Link to this
Yes, markedly. Total central government investment in land transport has increased by over 2½ times. Total central government public transport investment is almost 12 times higher, and total central government spending on roading has doubled in that period. But there are still major infrastructure deficits that need to be overcome.
Judy TurnerDoes the Minister agree that the potential for a public-private partnership along the Waterview Connection is indicative of a relaxation in the Labour Government’s ideological position on private sector involvement in infrastructure; if so, in what other areas does he foresee private sector involvement in New Zealand’s infrastructure projects?
Hon Dr MICHAEL CULLEN Link to this
On the latter point, in terms of telecommunications infrastructure, of course the private sector plays the dominant—indeed, the overwhelming—role, and one of the arguments at the moment is whether the public sector should be playing a stronger role in that regard. I remind the member that the legislation that enables public-private partnerships, which were not legal in 1999 when we became the Government, was passed in 2003 under this Government.
When Labour uses the term “public-private partnership” does it mean the definition given by the Minister of Transport, who is meant to oversee this project, when she said: “we already have public-private partnerships. We have the private sector building the roads; we have the public sector paying for them.”—is that what the Labour Government means?
Hon Dr MICHAEL CULLEN Link to this
Very clearly we have public-private partnerships, with small Ps, because the private sector does, by and large, build roads in New Zealand. It is a long time since we had a Ministry of Works that built the roads. Most people, in the context we are talking about today, understand Public-Private Partnerships, with capital Ps, to be rather more specific around the nature of the private sector involvement in the management of the entire process.
Rt Hon Winston Peters Link to this
Will the Minister confirm that the Government can borrow money at a lower level of interest than a business can, and that businesses always want a profit; therefore, why does the Government not just borrow the money, build the required utility, and pay it off over time—what is wrong with that option?
Hon Dr MICHAEL CULLEN Link to this
Claims have been made over many years that the private sector, through a public-private partnership mechanism, will be able to deliver on time, within budget, and probably more cheaply than the standard public sector - led procedures are able to do. We have not done this previously, because most of the projects we have had have been relatively small scale, and the costs involved in doing the first public-private partnership did not make it worthwhile exploring the options. This is a $2 billion - plus project. It is therefore worth testing whether those assertions are correct.
Can the Minister confirm that the real reasons the Government has mentioned public-private partnerships are that the Prime Minister wants a tunnel put through her electorate instead of a road, that it will cost well over $2 billion—probably $3 billion—and that the Government would have to borrow the money or put petrol tax up even further to do so, so it has decided to call it a public-private partnership?
Hon Dr MICHAEL CULLEN Link to this
However expensive a tunnel might prove to be, the National Party would be quite incapable of producing a light at the end of it. But, more than that, the deep tunnel option is probably cheaper than the alternative option of a cut and fill, and certainly far easier to consent than trying to drive a road, on surface, right the way through existing areas.
Can the Minister confirm that in fact Labour has been opposed to public-private partnerships the whole time it has been in office and that all it announced the other day was its intention to set up a committee to look at an option for something that cannot work under current legislation?
Hon Dr MICHAEL CULLEN Link to this
Well that is certainly more precise than anything we have heard from National so far in any of these areas. But, more than that, the member needs to remind himself that this Government went to the trouble of passing legislation through Parliament to enable public-private partnerships, which were illegal—and which party voted against that legislation at every point? The National Party voted against it.
Keith Locke
Madam SPEAKERI seek leave to table an article from the Melbourne Age showing that a toll-funded public-private partnership motorway was much more expensive than if it had been publicly funded.