[Sitting date: 15 August 2012. Volume:682;Page:4384. Text is incorporated into the Bound Volume.]
PHIL TWYFORD (Labour—Te
Atatū) to the
Minister of Transport: How much is the New Zealand Transport Agency expected to borrow for land transport projects in each of the three financial years after the Land Transport Management Amendment Act comes into force?
Hon GERRY BROWNLEE (Minister of Transport)
: As the available revenue for each of the 3 financial years after the Land Transport Management Amendment Act comes into force is currently unknown, no specific answer can be given. Since 2010 a facility has existed for short-term borrowing by the New Zealand Transport Agency to smooth out the pay-go system of funding, as was provided in the 2008 amendments to the Land Transport Management Act 2003. The short-term facility is currently set at $250 million. Any further borrowing over that has to be, and will continue to be, approved by the Ministers of Transport and Finance.
Phil Twyford: Is the plan to allow the New Zealand Transport Agency to borrow—the new plan, that is, not the existing power to borrow merely for cash-flow purposes—a response to the projected $1.5 billion shortfall in the National Land Transport Fund by 2020, or the scenario of a $4.5 billion shortfall from 2021 to 2030?
Hon GERRY BROWNLEE: No. In fact, the capacity for the New Zealand Transport Agency to borrow has existed for a very long time. The member will be aware that the Northern Gateway Toll Road, a project that was consented, designed, built, and funded by debt by the previous Government, was done outside of the National Land Transport Fund. What this bill allows is for those sorts of projects to be completed inside the National Land Transport Fund.
Brendan Horan: If the New Zealand Transport Agency has the power to borrow for major roading projects, will a similar borrowing mechanism apply to public transport, including KiwiRail; if not, why not?
Hon GERRY BROWNLEE: All Crown entities have a capacity to borrow, but that is constrained by section 106 of the Crown Entities Act, which requires that the appropriate Minister and the Minister of Finance agree to that borrowing.
Phil Twyford: Does he agree with the Prime Minister when he said: “The Government has to stop borrowing so much money; if we don’t quite frankly New Zealand will be downgraded and interest rates will go up for all New Zealanders.”; if so, why does he want to borrow to fund projects many of which have such low benefit-cost ratios?
Hon GERRY BROWNLEE: The question is based on the member’s own view and assumption about things. The reality is that there is no plan for the course of action that the member is asserting is going to take place.
Phil Twyford: Does it make economic sense to borrow to fund the
Pūhoi to Wellsford “Holiday Highway”, which has a benefit-cost ratio that barely breaks even and costs $1.7 billion, when a $400 million upgrade would fix the congestion and safety problems?
Hon GERRY BROWNLEE: Although I disagree with many of the assertions made in that question, I would say that I think that providing a stronger link to Northland, where there is so much poverty yet so much economic potential, is a good idea.
Phil Twyford: Does he remember a set of projects of national significance handpicked by the National Party in the 1980s called Think Big, which left the country saddled with debt for decades afterwards; and did he ever imagine that they would return from the dead as the roads of national significance?
Hon GERRY BROWNLEE: I think that is a completely erroneous sort of comparison. Some analysis of those projects will show that the member’s assertions are wrong, but I would say that the city rail link in Auckland certainly sounds like a project that would fit the bill he describes.