Press Release – NZCID

“Using the proceeds from the partial sell down of existing state assets to invest
in services that will yield a social and economic return for the nation is preferable
to trading off critical infrastructure projects such as the Northland-oriented Puhoi …31 October 2011

Future fund for infrastructure better
option than road/rail trade off but user pays infrastructure
should be added to the mix

“Using the proceeds from
the partial sell down of existing state assets to invest in
services that will yield a social and economic return for
the nation is preferable to trading off critical
infrastructure projects such as the Northland-oriented Puhoi
to Wellsford accessway and the Auckland central rail link.”
says NZCID CEO Stephen Selwood.

“Investment in
infrastructure always comes at a cost, but is central to
lifting New Zealand’s long term social, environmental and
economic performance.

“Poor infrastructure is
consistently ranked by the World Economic Forum as the
single most problematic issue holding back the country’s
global competitiveness.

“This means that we have to find
new ways to fund needed investment in infrastructure such as
schools, hospitals and both road and rail networks.

“Asset
sales is one option. Where the social and economic benefits
exceed the cost it makes sense to sell assets than to defer
investment.

“But direct pricing for road use and water
consumption is another more direct funding mechanism that
has not been fully explored.

“Reliance on taxes and local
authority rates to fund infrastructure investment is
inefficient because it provides very little incentive to
manage demand. On the other hand, direct user charges for
such things as water and road use generates a revenue flow
to support timely investment and sends a clear signal to
users to manage their demand more carefully.

“A low level
toll on Auckland’s motorway system – say $3 at peak, $2 on
the shoulder and just a dollar off peak – would not only
raise sufficient funding to allow both the Puhoi to
Wellsford and Auckland rail link projects to proceed along
with many other important transport investments, but the
variable pricing would also allow much better use of the
existing motorway system by encouraging people to use public
transport, go another way, choose another time to travel or
share costs through car pooling.

“Similarly, councils that
have elected to charge for water use have seen demand drop,
enabling them to defer investment in new plants and other
infrastructure that would otherwise have been needed. At the
same time, the direct user charge provides a revenue stream
to support investment when it is needed.

“Investment in
infrastructure is central to lifting the quality of life in
New Zealand. Using direct user charges to help fund that
investment is the next step in ensuring timely investment is
made when it is needed,” Selwood
says.

ENDS

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