Infrastructure council stirs debate on PPP, user-pays

Tuesday 26th April 2011

Many New Zealanders would prefer new infrastructure to be paid for through user-pays and public-private partnerships (PPPs) rather than by all taxpayers, according to a survey backed by some of the nation's biggest companies.

The New Zealand Council of Infrastructure (NZCID) - which includes construction companies such as Downer, Higgins, Fletcher Construction, Fulton Hogan, McConnell Dowell and Mainzeal - said today that it had found low support for further government borrowing, or raising taxes to pay for new infrastructure.

The survey, conducted by communications firm Kreab Gavin Anderson, will be presented at this week's NZCID conference on PPPs in Wellington, and involved focus groups in urban and regional New Zealand and a telephone survey of 500 people.

NZCID chief executive Stephen Selwood said today that the survey had found some people considered that central and local government could not afford to pay for all the community's infrastructure needs.

"While many of the survey participants had not actively considered this issue previously, once the various options had been explained to them they showed a clear preference for targeted funding methods over blunt instruments such as rates or tax increases," Selwood said.

Asked to choose no more than two preferred ways for the Government and local councils to pay for new infrastructure such as roads, public transport, ports and utilities, 40% of those surveyed selected user-pays models such as tolls on motorways, while 35% opted for PPP projects.

Partial sales of publicly owned assets such as power companies, ports or airports were chosen by 18%, while only 10% supported further public borrowing and just 8% supported higher taxes to pay for infrastructure.

A range of funding options for new public transport and roads - such as road tolls, petrol taxes and increased council rates - showed 57% preferred a $2 toll on specific motorways and highways. Only 9% favoured a regional petrol tax, while 4% supported a 20% increase in council rates.

The research also found that a significant number of people (24%) believed the Government should be wary of proceeding with projects for which it did not have the money.

"People's minds are very much on the basics at the moment but there is still an appetite for better infrastructure - around one in three respondents said existing roads, rail and other infrastructure across the country was only meeting the needs of some people," said Kreab Gavin Anderson partner and infrastructure specialist Jodie Brough.

"As confidence in the economy improves, demand for funding solutions will increase," she said. "The research indicates that user pays and PPPs remain firmly preferred to broad-based taxes and charges".

NZPA

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