New Zealand: What is at stake on 23 September (NZ elections) for infrastructure policy?

The big areas of difference between National and Labour in infrastructure policy are around transport, water, housing and funding mechanisms.

Generally speaking, New Zealand First seems closer to Labour than to National on these issues, but we would not expect infrastructure to feature strongly in coalition negotiations.

Transport

The difference here is over the emphasis – roads or public transport, in particular, rail. The next government – whether led by National or Labour - would invest in both, where they would diverge is on the spread of that investment.

National's big election play is the ten new Roads of National Significance: Labour's is the rapid rail network connecting Auckland, Tauranga and Hamilton.

The same divergence is evident in their competing transport packages for Auckland:

  • National would put in a new four-lane highway from Manukau to Drury and a north-western bus way
  • Labour would build a rapid rail link from the CBD to the airport and to West Auckland (instead of the bus way)

But National would also commit up to $267 million over the next three years to support commuter rail in Auckland and Wellington, and Labour would double the funding for regional road projects across the country (making the current ceiling of $140 million the floor and creating a new upper limit of $280 million).

Funding mechanisms

The broad point of difference here is that National sees a bigger role for the private sector, while Labour may be more inclined to equip local government with direct funding options.

Labour would engage in Public Private Partnerships (PPPs) for things like transport projects but would not use them for social provision – hospitals, prisons, schools. A case in point: National has said it will consider a PPP for the $1.2 billion Dunedin Hospital project, but Labour has ruled this out, saying the experience in the health sector internationally is that it would be too risky.

By contrast, Labour would allow Auckland Council to impose a fuel tax to help meet its transport funding shortfall – a request that National has been strongly resisting. Labour is also talking about targeted rates to capture the value uplift created by the new transport routes.

Both parties would use infrastructure bonds.

Water

National says no-one owns the water. Labour, the Greens and New Zealand First say that it is part of the public estate and that everyone owns it. This forms the basis for Labour's royalty scheme – still at this stage very much a work in progress.

Labour is committed to charging royalties on bottled water, irrigation schemes and other commercial uses. This would apply to large users only (although this has yet to be defined) and the royalty rates would be a matter for stakeholder consultation and Treasury input after the election.

The charges would vary depending on water scarcity and quality, and according to the policy architect, David Parker, will be "pretty low" – fewer than 10 cents a litre for pristine water which can be simply bottled and sent overseas, a few cents per thousand litres for irrigation.

The revenue raised is expected to be less than $500 million a year. Some of this would be directed to settling iwi interests and rights in freshwater with the balance being returned to the relevant regional councils for water management.

Labour would cancel the Crown Irrigation Fund, put in place by National in 2013 to promote development, but would leave in place the Freshwater Improvement Fund.

The reason National has avoided asserting ownership is that it will prompt claims under the Treaty of Waitangi, but water issues are lapping at National's feet also – primarily because it is widely recognised that the first come first served allocation system under the Resource Management Act cannot cope effectively with capacity constraints or with competing demands.

The Land and Water Forum in its final report, released in November 2012, discussed at length water use charges or taxes but did not make a recommendation because it could not reach a consensus. Nevertheless, shortly after the report's release, then Finance Minister Bill English accepted in response to questions from the Green Party in Parliament that water reform may include " developments in the pricing area".

Since then, the government has been mostly engaged with matters of water quality and irrigation infrastructure and is engaged with the Iwi Leadership Council on how to resolve Maori rights and interests.

From comments English has made recently, it seems that National's preference is to apply the template applied through the Marine and Coastal Areas (Takutai Moana) Act 2011. This is National's replacement for Labour's doomed Foreshore and Seabed Act and establishes a "non-ownership model" through which iwi can seek customary title in localised areas with which they have a long association.

Housing

Both Labour and National are promising big build programmes within the next 10 years – Labour 100,000 affordable homes nationwide, 50,000 of them in Auckland; National 34,000, all in Auckland, around 7,250 of which will be priced at less than $650,000.

National has also introduced a number of reforms to the Resource Management Act aimed at streamlining the construction consents process.

But, while increased supply is the only durable solution to the shortage of affordable housing, building is necessarily slow and New Zealand's population growth is currently very high by historic standards so despite the government's best efforts, the housing shortfall in Auckland gets worse every day.

National has been reluctant to act on the demand side, leaving that largely to a Reserve Bank concerned at the damage a property bust would do to the financial sector. This is a key point of policy divergence as Labour is all but committed to some form of capital gains tax excluding the family home. (We will discuss this in further detail in our tax commentary, due out soon.)

Labour would also:

  • extend the bright line test put in by National from two years to five
  • remove the ability to use tax losses on rental properties to off-set tax on other income, and
  • discourage residential property investment by foreigners.

Because the Reserve Bank's initiatives have hit first home buyers hardest, National has developed a series of measures aimed at mitigating this effect.

Both parties also have a range of initiatives to assist renters. Labour would proceed with increases to the accommodation supplement announced in this year's budget. It would also strengthen tenants' rights more significantly than National is prepared to do.

Chapman Tripp comments

This is not an exhaustive comparison. In many cases, the distance between the parties is not great in terms of their immediate policy intentions – e.g. telecommunications and energy (now that Labour has dropped its NZ Power proposal).

We have focused on the points of greatest or most practically significant divergence. New Zealand First is generally closer to Labour than to National in that it is pro-train, has supported a royalty on water and has criticised National's housing response as inadequate.

We would not discount NZ First seeking some sort of charge on foreign companies bottling New Zealand water but otherwise would not expect the issues we have discussed here to feature largely in any coalition negotiations.

The information in this article is for informative purposes only and should not be relied on as legal advice. Please contact Chapman Tripp for advice tailored to your situation.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions