On Newshub Nation: Simon Shepherd interviews Infrastructure Minister Shane Jones

Simon Shepherd: Roads, schools, hospitals, prisons, the building blocks that keep society functioning. And we don't have enough. It's called the infrastructure deficit and will be the focus of a major conference this coming week. The man charged with fixing it, is Minister Shane Jones. I asked him how he's going to do it.

Shane Jones: Yeah. Look, I was in agreement with quite a few things that did come from the Prime Minister’s advisory group. That one thing that we need to fix up is a long-term pipeline, give some certainty. The Infrastructure Commission which will be announced this week with some very senior New Zealand identities is going to have to confirm and give greater certainty to what projects are in the pipeline out of local government, out of central government. I wouldn’t deprecate what we’re doing, though, Simon. I mean, there’s 1.— there’s the thick end of $1.5 billion for KiwiRail. There’s about $3 billion.

Simon Shepherd: Yeah, you’re talking about that pipeline—

$3 billion for housing, $3 billion in education and health. Let’s not forget about that as well.

No, but it is $6.1 billion over the next few years. In the pipeline — 174 projects, and yet Treasury says in the next 10 years we’re going to need to spend about $129 billion.

Well, without a doubt. We need to derive better approaches to funding. I personally feel that the NZTA $45 billion over the next 10 years is inadequate. I’m working with Mr Twyford, and obviously he’s the senior minister. I really think we’ve got to come up with better funding mechanisms that blend both private and public capital or even that capital which is publically-owned, and start to fund our infrastructure in a far more innovative way.

Sure. You said a year ago that New Zealand is open for business, in terms of those kinds of innovative funding models. What has actually happened since you said that?

That’s a good cop. Things have been concealed in treacle, but we are actually waiting now to hear how do we actually move ahead with the Penlink project, which is a significant project. It’s very ready, in terms of — could be shovel-ready in a small period of time. That could be a blend of private and public capital. I can’t drive the project myself. It also involves Auckland Transport, and they occasionally occupy a part of the planetary universe I have no control over. But that’s an example of a project that could be up and running in a short order.

You talk about the pipeline as if there is a pipeline there, but the construction industry itself feels that in a couple of years the projects are just going to fall off a cliff. There’s nothing to replace the ones that you’ve scrapped like the Roads of National Significance.

Well, there has been a big change in terms of NZTA funding. The money is still there, it’s just going into smaller projects with an accent on safety. But look, fair cop. We’ve got to give greater levels of reassurance to the civil construction sector because they themselves have said, ‘Look, we want to work with you. We don’t want to be your enemy.’ They now see that there is substantial amounts of money that is going to KiwiRail. I mean, $1.5 billion should not be sneezed at over a two-year period.

But they are, in particular, worried about the spending on state highways. The spending on that is totally being reallocated towards other kinds of projects, and yet that just means we’re just going to get congestion and maybe more safety concerns on an area of transport that is crucial.

There’s two areas in Auckland, in terms of roading projects, that I think ought to enjoy higher priority — is Mill Road, out toward the Drury, Ardmore area and Penlink up in the Hibiscus Coast. I’m disappointed that we haven’t been able to make as much progress as we could on those two, but let’s face it, there’s an accent on public sector transport in Auckland. There’s additional work happening to see if we can stack up the light rail project. That’s a very complex project. The Cullen fund, they’ve poked their nose into that. They’re bringing us back a proposal and the NZTA as well. You know what I really think is a key problem, that we’ve lost our way here in New Zealand — our infrastructure projects take longer than they should. We have put too many barriers unnecessarily, as a country, in front of infrastructure projects. That’s a view I campaigned on. It’s a view that my leader has, and we’re going to have to tidy up some of that through David Parker’s RMA changes.

A lot of the NZTA funding has been diverted off to those other kinds of projects I was talking about. You talk about KiwiRail and there’s bikes, walking tracks, public transport. Do you believe that the Greens have hijacked the purse-strings on this?

No, but, hey — there’s three people in this waka. There’s the kakarikis, there’s ourselves, New Zealand First, and our colleagues from Labour. When you have an MMP government, you have to have a balance. I do believe—

You said in the House that it’s a pro-road government.

Well, I believe that in the regions we are a pro-road government. We are fixing up those areas of local roads and regional roads that have long-since been neglected. Admittedly, they are not the uber four-lane highways from Wellington to Kaitaia, but that was a pipe dream anyway. None of that was ever funded. All that was funded north of Auckland was Warkworth, and that’s taken 12 years. The only way we’re going to fund those sorts of developments is work out how we can make up the revenue shortage, and that’s why Phil Twyford and I are bringing back proposals with Sir Brian Roche, as to what level of sophistication and change do we need to bring to the current $45 billion amount of money over 10 years that NZTA represents because it’s not enough.

You’re going to have to find more innovative funding models. You’ve been talking about that for over a year and a half, but it’s a crucial time right now. There’s talk of an American recession. We’ve got interest rates at record lows. It’s up to the government to step in and keep this economy going, and a crucial part of that is infrastructure.

Yes, I’ve heard and I’ve listened very carefully to what the governor of the Reserve Bank has had to say, and he’s challenging us to be more creative and help him inject some more velocity into the economy. The difficulty with infrastructure projects is we don’t have multiple projects sitting on the shelf, ready to go, and there’s such a long lead in time.

That’s the problem, isn’t it? You haven’t planned for multiple projects ready to go when the other ones finish.

Well, the reality is that NZTA themselves had not finished their planning. They were on a trajectory to continue to lay out more four-lane highways, but they had no way of funding them. But look, I don’t want to get into a fight with NZTA and the people that want more roads. We’ve just got to find a new way to fund those roads.

Well, it sounds like National had a plan, and you’ve come into government, and you don’t have a plan for when the project’s finished. Is that fair?

Yeah, but the political creed that I bought in is a greater accent with my leader on KiwiRail. We’re not prepared to start KiwiRail.

So when the Infrastructure Commission is in place, can you give us reassurance that projects are going to happen more quickly.

Yeah, that’s part of the reason why we are breathing life into them. It’s not to be in competition with NZTA. In fact, one of the first meetings that is going to take place is going to be between Sir Brian Roche and the new chair who will be announced later in the week.

So who is that going to be? Who is the new chair, did you say?

I said the new chair will be announced later in the week. We’ll just have to taihoa for that.

All right. Let’s talk employment now. You’ve been making announcements in the Far North — $7 million in skills training in Northland. Does that mean you’re finally getting your nephews off the couch up there?

Well, the NEETS figure— Don’t ask me to explain what the term NEET means. I just call them ‘nephs off the couch’. We are dramatically improving that figure. I know personally where they’re going. They’re going into entry-level jobs in rural New Zealand, in forestry and in agriculture. But have we done enough? No, we haven’t done enough. Why haven’t we done enough? Because we’re turning around long-term inter-generational challenges. I’m finding, however, there’s a new generation who want to work in this space. They’re a lot more imaginative, innovative, and we’ve provided them the putea, and they’re starting to deliver on the results.

You mention jobs — how many jobs, then, has the provincial growth fund actually created now?

Right. So originally you may recall, I came on your programme and I said over time I was confident there would be 10,000 jobs.

That’s right.

And I think over the full life, when you look at where the money’s gone into forestry, into infrastructure, into rail, into roads, and unfortunately they take a long time to have life breathed into them. But we’re well over the thousand-mark, and soon I’ll be releasing some more figures.

So well over the thousand mark. Is that actual jobs? And where are you sourcing those figures from? We’re not making those figures up. They are actual jobs?

No, although I’m a politician, this afternoon I’m not making them up. 2000 people have enjoyed the fiscal attention of the provincial growth fund. My colleague, Mr Jackson, through the Mana in Mahi.

Are these full time jobs or just contractors, short-term jobs?

Well, the reality is some of the projects, for example building the gondola in Ruapehu, there’s both the full-time jobs, but there’s the service providers and the contractors who get in there and build the stuff together.

So they’re full-time equivalent jobs?

Well, over time, yeah, they are. The point that I’m making to you is that once the infrastructure is up and running, once the businesses are up and running, then they will attract more people over time.

All right. Also the provincial growth fund, last year you told is that you were hard line on drugs, and there was no guarantee you would commit the fund to a cannabis company. Medicinal cannabis is now heading towards legal status and the regulations are being drawn out. Will you change your position on that?

If the government and my colleagues want to receive and approve those sorts of proposals, I’m not going to stand in their way, but— I don’t know, call me a bit old-fashioned and a bit hard line, but I grew up near Kaitaia, and I’ve just seen the damage that drugs have done to my community. I don’t want to sound too moralistic about it, but I don’t want anything to do with funding any project.

This is medicinal cannabis. This is not—

Yeah, look, the law has provided for the development of those businesses and medicinal cannabis, and I’m not going to encourage anyone to undermine that law. But of all the things I’m focused on, cannabis in any form is not one of them.

All right. Let’s just talk about a couple of other issues here — one billion trees. There’s been 110 million planted. The government has funded 24 million. Are you satisfied with that so far, 20 months into it?

Well, we’ve got a horrendous impasse coming our way in 2030, and that’s really the long-term challenge in terms of the trees. If I can explain it to you, Simon, like this — the National Party put us on the hook for 2030 impasse through the Paris Agreement, and the trees that I plant will hopefully sequester the nasties out of the atmosphere so we lessen that bill. That’s going to be a major challenge for us. Our party are doubting Thomases on importing credits from overseas. We want to see more trees planted, and I believe we’ll get to 100 million at the end — per year — at the end of next year.

At the end of next year. OK. Those trees being planted are, well, majority is exotics, pines. It’s only 12% natives. The critics are saying that’s not good enough, in terms of sequestering carbon.

The native trees do take some time to grow and fulfil the full potential for sequestering carbon, you’re right. But hey, a lot of these trees are being planted by the private sector market. And if the private sector wants to put their own money at risk and plant exotics, I’m not going to get in their way. The $120 million dollars that the Crown has allocated for grants to grow trees — two thirds of that grant money must go towards natives.

OK. I’ve just got one more question. Willie Jackson has come out in support of Kelvin Davis over the Corrections mistake over the letters. Do you agree with that? Do you support Kelvin Davis over this?

Well, look, it’s been a debacle. Obviously, I support Kelvin as a fellow minister. He’s as honest as the day is long, but I just wonder whether or not in the bureaucracy, the Department of Corrections, the people looking at those letters are related to Theo Spierings because their performance is inversely related to a quality result.

Yeah, but overall perception — it feels a bit loose, doesn’t it?

Yeah. It’s astounding to me. We’ve got the worst possible human being who has ever inhaled oxygen in Aotearoa in a jail, and somehow he’s set up a pen-pal club. I don’t get that at all.

All right. Infrastructure Minister, Shane Jones. Thank you very much for your time.

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