Steven Joyce Defends Roads Of National Significance

Last week SST columnist Rod Oram wrote an excellent piece on the economic folly of the Government’s Roads of National Significance. It was well researched and argued, and supported by a number of statistics.

Today, Minister of Transport Steven Joyce has responded. In contrast this opinion piece is completely devoid of any meaningful research, but it does reveal more behind his thinking:

Having the right transport infrastructure in place is an important part of the export job. We need to get our goods to market more effectively and efficiently, we need to cater for more tourists (who bring money here), and we need to make it easier to get around our largest cities (so our people can get to work).

Therefore we need to invest our roading funds, paid for by our petrol taxes and road user charges, strategically to deal with the biggest issues in our land transport network.

That’s why the government developed the Roads of National Significance. They are the seven strategic projects most necessary to reduce congestion, improve journey times and improve safety across New Zealand’s highway network.

The problem for Minister Joyce here is he presents no linkage between the need to deal with the “biggest issues in our land transport network” and “that’s why the government developed the Roads of National Signficance.  He goes on:

These projects are not plucked out of thin air. They are crucially important to our country’s economic future. They are the most urgent large roading projects New Zealand has. And, like it or not, our roads carry about 70% of our freight.

Well, the Puhoi to Wellsford toll road did not feature on transport plans at all until the Minister came to power. And Rod Oram’s analysis exposes the lie that they are crucially important to the country’s economic future. So did the Minister respond in kind with statistics to support his argument?

And for Rod Oram’s benefit; they are not cooked up as part of a grand political conspiracy about cost benefit analyses. The two reports he spent so much newsprint on reading ulterior motives into last week were simply the result of the progressions of business cases as the knowledge of each project improved; and they were completely devoid of political input. That’s a factual reality that he was informed of before going to print.

So he doesn’t deny the really poor cost benefit for the RoNS, but instead attempts to personally attack Rod Oram, who is a trained economist.

So why do some people get so wound up about investing in roading projects?

The reason, Minister, is that they represent poor value for money. The Puhoi to Wellsford toll road will most likely lose money.  And without telling us how much the toll will be it is hard to see how a meaningful cost benefit analysis for this road has been conducted.

There’s a limit of course – it’s called our international debt levels, as I said at the outset. So local body wish lists for $2.3b CBD rail tunnels on top of all this need to be fully tested; and someone else besides taxpayers (and international moneylenders) will have to put their hands in their pockets if they want to bump those sort of projects up the queue. We also should be wary about putting too much faith in a mode of transport that currently carries less than 2% of Auckland’s commuters to and from work each day, even after some quite spectacular growth.

Just as well the $5m study into the CBD tunnel has confirmed economic returns of between $3 and $6 for every dollar invested then. And why shouldn’t the petrol excise tax contribute toward the cost? Surely petrol taxes should fund the projects that give the best value for motorists?  The CBD rail tunnel falls into this category.  Why should the NZTA have all the say on where it should be spent?

Some people believe the way our cities have grown is wrong. They think the quarter acre section is a fool’s paradise. People should live more in apartment buildings and less with a backyard, or heaven forbid, in a small town outside of the city.

Straw man argument. Who are these “some people”?  Who said a quarter acre section is a fool’s paradise?

It’s a philosophy that argues that urban planners should have much more say about how we live our lives; and it’s an agenda that the old ARC had in Auckland for a long time: have a cast-iron metropolitan urban limit, force up the price of sections, increase the density of our suburbs, have people live in high-rise apartments, don’t let people get off the highway at Puhoi. And so on. If you follow that logic too far, the Auckland Harbour Bridge would never have been built, and the North Shore would still be a couple of seaside villages.

Now he’s getting really silly.  What’s the linkage betwen the MUL and “forcing up the price of sections”?  Any statistical causal evidence?  It’s the NZTA that don’t want to let people of at Puhoi… what on earth is he on about here? Besides, its not his job to decide urban planning – its the role of the new Auckland Council.

But we also have to understand that people like to live where they want to live, and provide cost-effective transport options (roads even!) for those people too. Amusingly, Auckland has increased in density in recent times. But largely not where the central planners said it would, (along the transport corridors) and instead in the beach-side suburbs. Fancy that.

Oh, how amusing! Got any statistics to back up what you are saying, Minister? There is far more apartment construction going on in the CBD than in Murray’s Bay, from what I observe.

In my view, it reflects poorly on Oram for buying into a political agenda, complete with unfounded conspiracy theories, and calling it a business column. We need less of that sort of “business” thinking, and more sound practical ways where governments can support New Zealand’s trading firms to grow faster. Providing value-for-money transport corridors they actually use is one way of doing that.

Yeah, get another dig in at Rod Oram, because you can’t refute his statistics. Conclude with baseless drivel. Good luck in the next election, because believe it or not Minister, value-for-money transport corridors are what everyone wants.  In Auckland, though, these corridors don’t look like toll roads.

Leave a comment