Recommendations
150. It is recommended that the Committee:
Role of Infrastructure in the Economy
1. Note that sound infrastructure and the services it provides have an important role to play in meeting the government's sustainable development objectives;
2. Note that investors across the economy need confidence in arrangements for the provision and regulation of infrastructure if they are to commit funds to new projects;
Current Infrastructure Issues
3. Note that New Zealand's unique characteristics present a challenge to cost effective and secure infrastructure provision;
4. Note that the PricewaterhouseCoopers (PwC) audit provides a "snapshot" of the state of current and future infrastructure assets and that the report did not identify any unrecognised issues that might pose a serious barrier to growth and sustainable development objectives;
5. Note that the Associate Minister for the Environment is leading a work programme to address RMA issues, the Minister of Energy is leading on energy security, and the Minister for the Environment is taking responsibility for ensuring that overall water allocation issues are progressed;
Infrastructure Policy Framework
6. Agree that the following objective for New Zealand's infrastructure policy be adopted:
"To enhance infrastructure's net contribution to economic growth and societal well-being over time, while reducing the incidence and severity of service failures and adverse effects on the environment";
7. Note that a key imperative is to ensure infrastructure will be sufficient to support both the Growth and Innovation Framework objective of returning our per capita income to the top half of the OECD and the Government's sustainable development objectives;
8. Note that infrastructure policy issues will need ongoing government attention, and that this will include ensuring that relevant policy settings are designed to:
- Monitor infrastructure issues actively;
- Facilitate a smooth response to new infrastructure pressures as they emerge;
- Reduce the incidence and severity of unexpected service failures; and
- Assist transitions such as those arising from technological changes and shocks (including disasters);
9. Note that officials have identified five "principal infrastructure functions" where good performance is necessary if the policy and delivery agencies are to make their best contributions to sustainable infrastructure arrangements, the five functions being:
- Promoting government outcomes
- Establishing infrastructure policy settings
- Monitoring
- Futures analysis
- Emergency management liaison;
10. Note that officials (MED lead) will take steps to ensure that agencies with infrastructure policy roles are informed of key learnings from the Stocktake, and that this will include attention to the issues in recommendations 8 and 9;
Performance of Current Infrastructure Arrangements
Overview
11. Note that officials assessed how well the current policy settings aligned with sustainable development objectives and concluded that sustainable development objectives are a common theme in the policy settings and that current Sustainable Development Programme of Action work programmes on water, energy and cities will help ensure that sustainable development principles are applied in practice;
Statistical Issues
12. Note that a need has been identified for improved infrastructure performance benchmarking against international practice and for improved infrastructure information to inform policy development and goal setting, and to monitor implementation;
13. Note that while there is extensive data available through a range of statistical and indicator programmes, and recent investments in improved statistics and strengthening of the official statistical system will help improve the range of relevant data about the state, performance and demands placed on infrastructure, some significant gaps remain;
14. Agree that MED and Statistics New Zealand, together with other relevant agencies, should undertake further work to establish the information requirements for monitoring New Zealand's infrastructure, and report back to Cabinet by December 2004;
Audits
15. Note that the infrastructure audit conducted as part of the Infrastructure Stocktake has been valuable in helping to establish a basis for the state of current and future infrastructure assets;
16. Agree in principle that future infrastructure audits be conducted every three years;
17. Note that, subject to agreement with recommendation 16 above, officials (MED lead) would advise on audit needs for the 2006/2007 financial year, and that recommendations would be accompanied by funding requests;
Asset Management Plans
18. Note that asset management planning by infrastructure providers can assist delivery of the required service levels through cost-effective creation, acquisition, maintenance, operation, rehabilitation and disposal of assets to provide for present and future infrastructure needs;
19. Note that the Local Government Act 2002 requires the Local Government Commission to review the Act as soon as possible after the 2007 local authority elections and that this will include council planning procedures;
20. Agree that the 2007 review of the Local Government Act 2002 should include whether there is a need for a more comprehensive approach to asset management planning requirements in respect of assets owned or controlled by council-controlled organisations;
Sector Engagement and Regional Partnership Programmes
21. Note that MED will ensure that specific infrastructure dimensions are included in sector engagement and regional partnership programmes;
Arrangements for Cross-Sectoral Infrastructure Advice
22. Note that arrangements for development of policy and advice on infrastructure issues will continue, as at present, to be the responsibility of the relevant Minister and agencies with sector responsibilities, supplemented by cross-Ministry committees such as the Interdepartmental Working Group on Infrastructure;
Funding and Financial Arrangements
23. Note that Treasury is conducting work on whether infrastructure bonds should be introduced in New Zealand, and if so, on bond design features;
24. Invite the Minister of Finance to report to Infrastructure Ministers on the issues associated with infrastructure bonds and with options for the introduction of infrastructure bonds, by 30 November 2004;
GIAB Issues
25. Note that the Growth and Innovation Advisory Board plans to conduct analysis of the linkages between ports and airports, and other transport infrastructure, including discussions with infrastructure users and providers (excluding the tourism industry), and that the Board will report to Infrastructure Ministers by late 2004;
Publicity
26. Agree that the Minister for Economic Development take responsibility for announcing the Stocktake findings; and
27. Agree that this Cabinet paper and the consultants' reports be released on MED's website for public information and comment.
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