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It’s time to decide how infrastructure is funded

Tough decisions ahead - Featured Image - Local Government September 2017

By Peter Silcock, chief executive, Civil Contractors New Zealand

The national surge in infrastructure investment and election promises to invest more are good news for us all. However, most of the new investments and promises are focused on transport while our ageing three waters infrastructure is increasingly becoming the poor cousin.
The relative lack of investment in our three waters infrastructure is complex but, in my view, it is principally tied back to the differences between the funding models. By its very nature, the transport network needs to be connected across the country and a good portion of our local roads are funded nationally.
The three waters infrastructure is not connecting nationally and is funded and managed by local authorities. It is also mostly unseen by the public. If the roading network is not maintained, people experience the pot holes and congestion first hand and soon start to complain.
By contrast, a pipeline may be leaking, or approaching its capacity for years before anyone notices it and then gets around to fixing it.
While we don’t have a nationally-connected water infrastructure network, the three waters are a critical service that is nationally important to our social, environmental and economic wellbeing.
I am not suggesting that central government should take over the management of our three waters infrastructure – although a combined funding model like our local roads would be worth investigating.
But they certainly need to ensure that the right tools and funding are in place to enable local government to do the job.
The government’s announcement earlier this year of the Housing Infrastructure Fund targeted at high-growth councils is a step in that direction.
But it only looks to remove barriers to new homes being built rather than addressing issues about the maintenance and replacement of our existing water infrastructure.
The challenges we face in the three waters space are not just about growth councils. Comprehensive, long-term nationwide solutions are required.
As we head into the election it is great to see various parties committing to investing in infrastructure but they are ignoring the major issues of funding for local government work on our water infrastructure.
We desperately need more tools and funding options because New Zealand is facing a perfect storm of issues including:

  • Ageing assets resulting in more maintenance and, increasingly, replacement work;
  • Climate change pressures requiring systems that can cope with more extreme floods, long and more intense drought events and sea level changes;
  • More resilience to enable systems to get up and running after major events like storms and earthquakes;• 
Population growth and urban infill placing more strain on existing systems; and
  • Increased pressure on freshwater supplies from changing land use.

The pressure on our three waters infrastructure is intense all over the country not just in high-growth areas. In fact, we know that there are significant pressures in areas with low or negative growth as well.
If we don’t find a better way to fund the maintenance and replacement work required, our ability to provide the level of service the public expects will continue to decline.
The need for new funding tools should not be an excuse for inaction. Tough decisions need to be made based on the community’s expectations of the level of service and strong technical advice.
We need to better engage the community about how we can meet their expectations and the future consequences of under-investment. We also need to make some tough decisions using our existing funding mechanisms if that is what is required.

This article was first published in the September 2017 issue of NZ Local Government Magazine.

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