The concept of user pays is well entrenched in New
Zealand. People mostly accept that if
you benefit from something, then you pay for it. Interestingly, when it comes to infrastructure,
users and those who benefit aren’t necessarily the same.
In my opinion, all New Zealanders generally benefit -
directly or indirectly -from improvements in infrastructure and therefore the
costs should be shared among us all.
This isn’t a widely held viewpoint.
For instance, many people who live outside Auckland
object to paying for Auckland roading.
They fail to appreciate that, although they don’t directly use Auckland
roads, they would benefit from improved roads in the region.
Most of New Zealand’s petrol and diesel comes from the
Marsden Point Refinery in Whangarei and is transported by road to Auckland for
distribution around the country. It
makes economic sense that the faster we can move petrol (and other goods)
around the country, the lower the cost everywhere. So logically, because
everyone benefits from cheaper petrol and other goods, it makes sense that everyone
should contribute to Auckland roading.
It’s been estimated that a sensible roading network in
Auckland could increase productivity by 10% due to reduced travelling
times. With one-third of the population
living in Auckland, this would increase the productivity of the country by
3.33% overall. Clearly, that benefits all New Zealanders.
All New Zealanders benefit from tourism, which is a
huge revenue source for our country.
Te Anau is the gateway to the extraordinary Milford
Sound which attracts many international tourists annually. Te Anau’s population is about 2000. However over summer, the population trebles
and an additional 4000 beds are required for visitors.
Tourism is important for the economies of both Te Anau
and New Zealand. But it would be
difficult for Te Anau’s 2000 people to pay for and support infrastructure for
6,000 people - as it is for the many other communities who are gateways to our
landmark tourism areas. Because we all
benefit from the revenue that tourism generates, shouldn’t we all contribute to
the infrastructure required to support access to these places?
Central funding would resolve the user pays
issue. Where things are legislated in
law, local communities have no choice about whether or not to comply and as
such should not be asked to pay.
Central control and management of infrastructure at a
national level, particularly in the water and waste water sector, is a
must. We have central funding for our
roads, so why not for this equally critical area?
Central funding has two impacts: 1) it removes local
communities from the sole responsibility of paying for a piece of nationally
significant infrastructure; and 2 ) It removes the control of the level of
service from the local community and puts it into the hands of people with
expertise in that area.
National provider of water and wastewater infrastructure
A fine example of a highly efficient national provider
of core infrastructure services is in Scotland, where water and sewerage services are provided by a single
public company, Scottish Water. The success
of Scottish Water is widely acknowledged.
It is regulated by the Water
Industry Commission for Scotland, which ensures
that householders and businesses
receive a high-quality service and value for money by setting prices,
monitoring Scottish Water’s performance and facilitating competition in the
If we could stop being so regionally focussed and
start thinking nationally about implementing a similar system here - New
Zealand Water - the benefits in terms of quality and cost would be immense.
I believe that directly and indirectly, we all benefit
from infrastructure and should therefore all contribute towards its cost. At best, the user pays approach is parochial
and inefficient. At worst it’s holding
us back from making the necessary investment in our infrastructure, which is
critical to increasing productivity, driving growth and enhancing our quality
It’s time to think about infrastructure from a
national perspective and not as a collection of independent regions.
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