Making the Golden Triangle Work Discussion paper ahead of the local body elections 2019

04.Call us today and let us help you, 0800 300 362. ema.co.nz

OUR RECOMMENDATION

Government can unlock new funding tools, such as the infrastructure bond approach developed for Milldale, north of Auckland, and assist in other areas such as UDA legislation. Ratepayers in the 9,000-home Milldale suburb voluntarily pay higher rates ($1,000 per year for 30 years) to pay for new horizontal infrastructure built and paid for up front to support fast and large-scale development of the new suburb. But councils also have to help themselves and remove ideologically-driven opposition to Private Public Partnerships, Mixed Ownership Models and asset recycling. Port of Tauranga is a hugely successful, mixed ownership model. There is no reason Auckland Council can’t do the same and unlock funds currently tied up in its full port ownership. Another option, widely used overseas, is retaining the port’s land and long-term leasing out the port operation. The New South Wales Government has used recycling of its assets, including both partial and full sales of its assets, to fund large-scale infrastructure, bringing significant social and economic benefits to the state. The NZ Super Fund, ACC and Iwi have investment timeframes that suit infrastructure development and are another alternative to rates, while the government’s Investment Attraction Taskforce could prioritise attracting private investors. With record low interest rates, councils at their debt ceilings and high levels of international funding available, now is a good time for central government to support infrastructure development at local levels. The Productivity Commission’s report on local government funding makes the case for many of these tools while also finally debunking the case for business differentials. The EMA has long-campaigned against business differentials and these should be phased out in favour of alternative revenue sources such as user pays. Congestion pricing should be introduced now in Auckland in tandem with the ongoing expansion of public transport. Internationally there is well-proven and available technology to apply congestion charging now and it is a superior alternative to the current Regional Fuel Tax.

The EMA is closely monitoring other pinch points in infrastructure development, including the availability of aggregate, cement and other materials. Local government has an important role to play through resource consents related to quarrying and storage of materials.

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OUR RECOMMENDATION

With new regulation on the way, Auckland’s Watercare is a model of supplying water and removing wastewater that is consistent with the Government’s Policy direction. Watercare’s Central Interceptor project is one of the few infrastructure success stories in the region. It will bring a significant clean-up to Auckland’s inner-city beaches and water quality when completed.

Auckland’s adoption of water metering has also significantly reduced per person consumption to less than half the national average, reducing pressure on storage and network capacity.

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Houses in Hamilton, New Zealand.

Other jurisdictions in the region could consider the Watercare model or encourage Watercare to take a regional role before having central government impose a regime, especially if they seek to retain control of their own water provision services. Existing water provision systems are highly fractured and standards inconsistent. They won’t survive.

OUR RECOMMENDATION Large tracts of land in Auckland’s Devonport, Birkenhead and Whenuapai suburbs could become available following the Defence Force’s review of its assets. Auckland Council should encourage these moves and emulate the housing and infrastructure success that is Hobsonville Point. Tauranga councils have to free up further land for development, with as few as 1,000 sections left for new housing - in one of the country’s fastest-growing cities. Alternative funding streams may be the answer to overcoming provision of infrastructure to support housing, or the Government’s Urban Development Authority (UDA) legislation may solve the issues in a similar way.

Hamilton also needs to look at how it funds development with the heavily-indebted Hamilton Council unable to progress projects at Peacockes and Temple View. UDAs may also be the eventual problem-solver with their ability to charge their own rates and new residents opting into the higher rate.

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None of the first four issues can be dealt with properly until our central government and councils agree on fresh approaches to the fifth – Funding of local government.

Significant underspending on infrastructure by successive local and central governments continues to bite across a region featuring fast-growing cities and under-pressure regions. But all our councils are at or very near their debt thresholds or are unable or unwilling to extract more funding from ratepayers.

Auckland traffic congestion, estimated to cost the economy between $1.2 billion to $2 billion per annum just two years ago, is getting worse. Tauranga residents and those in some parts of Hamilton are facing similar long delays on daily commutes and key transport corridors. There are productivity gains to be made immediately by addressing these issues.

Northland’s access to critical freight routes to the south continues to be constrained by a two-lane, winding road link also known as State Highway 1. Yet another freight study has thrown more uncertainty into the future mix of the Tauranga, Auckland and Northland ports.

Freight access to all three ports remains problematic. Long queues of trucks on Quay St and The Strand seeking access to Auckland port as it hits its pre-Christmas importing seasonal peak around election time will remind voters of those issues. Congestion will also be building in Tauranga

on Totara St around the time of the election as that port approaches its peak export period. Tauranga continues to lack an effective public transport network, with commute times by car now rivalling Auckland in some areas.

Lack of horizontal infrastructure – roads and utilities – has resulted in land supply for housing in Tauranga drying up, while the development community in Hamilton also apparently lacks confidence in its council. Infrastructure issues continue to hamstring the development of Hamilton’s Peacockes block. Consent rates in Auckland are at record levels but the EMA would like to see more detailed statistics on Certificates of Completion, a better measure of what is actually being built. The recent announcement of a central regulator for water quality will put further pressure on councils to improve their drinking water standards and management of wastewaterSitting behind the resolution to most of these issues is funding: How are our councils going to pay for the many things we’d like them to do?

The answer is not rates, as the sustained levels of rate increases required to build new, or even to just maintain current infrastructure, are unpalatable and unsustainable for existing ratepayer bases. Simply holding a hand out to central government isn’t going to work either, as Government juggles many national spending priorities – although it does have a role. The reality is that Auckland, as a powerhouse of New Zealand’s economy, needs the money. But so does the rest of our EMA region.

So what would the EMA like to see for our region and our cities?

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The disturbing aspect of preparing this discussion paper ahead of the local government elections is that issues across the EMA region (from Taupo north) remain almost unchanged from the 2016 local body election; they are just more pressing. Unfortunately, and perhaps this is a factor of three-yearly election cycles, almost no progress is visible. There are five common issues facing local government in our region:

This discussion paper highlights the problems and recommends solutions, to help guide your voting on October 12.

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Road in Rotorua cutting through forest,New Zealand.

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<Auckland downtown taken from Skytower, New Zealand.

The Auckland Transport Alignment Project (ATAP) was supposed to be the key to unlocking Auckland’s congestion and transport woes. Four years later we are still waiting for any significant progress on new projects, and with the NZ Transport Agency in disarray, nothing is moving any faster. Tauranga, Hamilton and Whangarei have their own issues.

OUR RECOMMENDATION

a) Create a delivery agency for the Auckland Transport Alignment Project, perhaps utilising the new National Infrastructure Commission, and prioritise:

• Building third and fourth rail mains for Auckland: A third main unlocks the full potential of the City Rail Link and assists in the Ports of Auckland’s goal of doubling the amount of freight it moves by rail. A fourth main would allow an express train service from the new Puhinui interchange to the CBD and to Hamilton.

• Building a fast transport link from Auckland International Airport to Puhinui: Bus, light or heavy rail, make the decision and get on with it in time for 2021’s APEC and America’s Cup.

• Build the East/West road corridor in Auckland: An urgent project for a decade, this critical freight link is now back on the shelf with no sign of a new design and no sign of a start date. Nearly 20 per cent of Auckland’s economy comes out of the area. It needs better access and Onehunga needs some certainty to plan its new town centre and wharf redevelopment.

• Electrify the Papakura to Pukekohe rail line: Auckland’s fast growing south needs a rapid public transport link or the Southern Motorway upgrades will be an expensive car park.

• Electrify the Swanson to Helensville rail line: Encouraging development and providing commuter services to the Kumeu Film Studios and other major commercial sites.

• Expand ferry services to Te Atatu, Whenuapai and Riverhead in the west and Long Bay, Browns Bay and Mairaingi Bay in the North

• Build Penlink: A public-private partnership (PPP) exemplar roading project to unlock access to the Whangaparaoa Peninsula.

• Introduce smart traffic measures: Synchronised light phasing, smart phone alerts and allowing left turns against red arrows when crossings are empty. Now.

• NZTA needs to make a decision on the cycling/walkway Skypath across the Harbour Bridge and start construction.

b) Tauranga needs to develop a public transport system that is going to help cope with its rapid growth and assist in managing congestion from Papamoa and Welcome Bay.

c) Hamilton needs another bridge across the Waikato River, especially if it is to fully unlock the Peacockes development.

The Hamilton bridge, and an improved corridor east to Tauranga, a four-lane link from Tauranga to Katikati and four lanes heading south from Whangarei, are all national projects that will benefit from the combined weight of the region’s local government bodies agitating for urgent funding and more importantly, actual construction. Local government can assist with consenting and planning support.

OUR RECOMMENDATION If the region is to function as the true “Golden Triangle” driving New Zealand’s economic and population growth, let’s take a co-ordinated region-wide approach to infrastructure and join forces to get action out of central government.

• Take the example of the planning, development and co-ordination of growth along the Auckland-Hamilton Expressway, and replicate it along finished corridors from Whangarei to the south and Hamilton east across to Tauranga and onward to the Eastern Bay of Plenty.

• Co-ordinate regional development funding approaches and applications for areas such as Northland, the Far North, Coromandel and Eastern Bay of Plenty. Use the combined leverage to provide infrastructure needs for under-pressure tourism hotspots in Taupo, Rotorua, Coromandel and the Bay of Islands.

• Our two main ports have a working relationship, and a regional approach could only enhance that. Councils are well-placed to encourage further regional co-operation as all three ports, including Northland’s, have at least majority council ownership.

• Auckland and Tauranga ports need greatly improved freight access to enhance their efficiency and reduce their impacts on surrounding communities.

• The review of Defence Force assets opens an opportunity to establish a new naval base near Whangarei, particularly if the upcoming decision on dry dock facilities takes advantage of the existing support engineering and marine businesses in Whangarei and shifts that facility north.

• Whangarei airport’s runway will need an extension when Air New Zealand eventually upgrades its regional fleet. Is that an opportunity to create a new tourism and freight hub in the north either at an extended or new Whangarei location or at an extended Kerikeri location? Could this be a combined civil and Defence Force base, also providing support for a relocated navy and enabling the closure of Auckland’s Whenuapai Air Base and a development similar to nearby Hobsonville Point?

• A jet-capable runway also opens up significant tourism opportunities and creates an important freight gateway for time-sensitive horticulture, agriculture, shellfish and fin fish markets.