Attachment 2: Infrastructure-Related Work Programmes
1. This attachment describes the main recent and ongoing government work programmes that impact directly on infrastructure.
Cross-Sector
2. Sustainable cities: The Sustainable Development Programme of Action work programme is being led jointly by the Ministry of Economic Development (MED) and the Ministry for the Environment (MfE), and is initially concentrating on Auckland. There are seven work streams identified under the Sustainable Cities umbrella including transport, urban form and design, and the Auckland Regional Economic Development Strategy. These work streams are supportive of major infrastructure initiatives such as the Investing for Growth package on Auckland transport infrastructure. They enable integrated work on a number of fronts to contribute to better integration of Auckland's land use and transport development. A specific example is the current work on innovative approaches to peak traffic congestion.
3. Sustainable Development indicators: Statistics New Zealand is undertaking a multi-year sustainable development indicators work programme, which will develop high level sustainable development indicators, including "decoupling" indicators, for New Zealand. It is expected that some of these will be relevant to infrastructure, but that they would be insufficient, on their own, to inform infrastructure investment or policy decisions.
4. Infrastructure R&D investment: GIF identified a "solid research development and innovation framework" as important to building New Zealand's economy. The Foundation for Research Science and Technology (FRST) has restructured its investment portfolios to reflect GIF and SDPoA principles and is now developing a new investment strategy for infrastructure R&D to take account of Government and industry priorities. FRST invests approximately $30 million of taxpayer dollars annually in infrastructure R&D. The IWG has provided the consultants' reports to FRST and MoRST, in addition to meeting with officials from both agencies, to ensure that the new investment strategy takes account of the outcomes of the Infrastructure Stocktake programme.
5. Local government funding review: The Department of Internal Affairs has initiated a review of local government funding to:
- Examine the impact of community expectations on present and future local government funding requirements;
- Examine the impact of other regulatory requirements (both recent and anticipated) on present and future local government funding requirements;
- Explore the issue of affordability in relation to present and future local government funding requirements;
- Identify the degree to which any identified pressures are likely to be resolved by recent changes to councils' funding powers and examine appropriate solutions where gaps might be identified; and
- Develop criteria to review and assess the merits of any additional funding arrangements that might be found to be necessary.
The outcomes of the review will be reported to a Central Government / Local Government Forum meeting scheduled for late 2004.
6. Tourism infrastructure requirements: The Ministry of Tourism secured three years of funding through the Cross Departmental Research Pool for a project to examine capacity requirements in light of increasing visitor numbers. This project is at an initial scoping stage, but the intent is to apply tourism forecast data to the existing infrastructure demand models used by a wide range of public sector agencies (for example, transport). Where such models do not exist, as appropriate, the project will explore options for developing models or proxies with the aim of identifying key choke points and/or bottlenecks in terms of tourism infrastructure provision, providing a basis for developing solutions in advance of reaching capacity constraints.
Energy
7. Sustainable Energy: The SDPoA work programme on energy is developing a framework for considering energy issues going forward. The framework will provide a clear articulation of long term goals for sustainable energy, an explanation of how current policy settings contribute to those goals, and a discussion of areas where a sharper policy focus is required, taking into account an assessment of trends in the external environment relevant to New Zealand's circumstances. The framework is intended to provide a basis for more informed decision-making by central and local government and by market participants, including in relation to energy infrastructure. This work includes consideration of the transport aspects of energy use.
8. Electricity governance and reserve energy: The governance of wholesale electricity arrangements has now been transferred to the Electricity Commission. The Commission will recommend to the Minister of Energy any changes that are required to the governance regulations and rules in the future. The Commission is also responsible for taking reasonable steps to ensure security of supply in a "one in 60" dry period by contracting for reserve energy and requiring information disclosure by generators. MED is working closely with the Commission to promote security of supply in the 2004 and 2005 transitional period.
9. Gas governance: Parliament is currently considering amendments to the Gas Act 1992 to provide backstop regulation-making powers for the gas industry (provisions similar to those in the Electricity Amendment Act 2001). It is proposed that if the gas industry fails to make sufficient progress towards meeting the expectations of the Government (as articulated in the Government Policy Statement issued in March 2003), the Minister of Energy will establish an energy commission which will recommend regulations and rules to the Minister of Energy. In response to this, the industry has proposed an alternate co-regulatory model of governance, whereby an industry body will have the power to levy and sanction its members. These issues are currently before Cabinet for consideration.
10. Commerce Commission "control" inquiry: The Commerce Commission is undertaking an inquiry into gas pipelines in response to a request from the Minister of Energy. The Minister has requested the Commission report by 1 November 2004 with a recommendation as to whether gas services should be controlled under the Commerce Act. In making its recommendation the Commission will consider whether competition is limited in the market and whether it is in the interests of consumers that control be imposed.
11. Distributed generation: MED is developing regulations to facilitate the connection of distributed electricity generation to distribution networks. The regulations will provide greater certainty and clarity about timing and costs associated with obtaining interconnection and are expected to be in place about August 2004. The Electricity Commission will be responsible for monitoring the regulations and recommending any future amendments.
12. Gas exploration: Consideration is being given to possible policy changes to strengthen incentives for increased gas exploration.
Water
13. Waitaki water allocation: The Resource Management (Waitaki Catchment) Amendment Bill 2003 amends the Resource Management Act 1991 to deal with significant, competing proposals seeking to use the limited water resources of the Waitaki catchment and provides for the establishment of a statutory board to devise a water allocation plan for the catchment as well as a process whereby the merits of the various applications can be considered. The future of this legislation is currently under review.
14. Drinking water quality: Drinking water standards are proposed that will require all drinking water suppliers to take all practicable steps to meet the drinking water standards. The Ministry of Health has a project underway examining the options for providing assistance to drinking water suppliers to help them meet the requirements of the proposed Health (Drinking Water) Amendment Bill. The outcome of the project is likely to be a scheme along similar lines to the Sanitary Works Subsidy Scheme currently in place to assist with funding sewerage schemes in small communities.
15. The Ministry of Health notes that it is intended that small suppliers will have up to 5 years to comply with the new standards, and that the draft legislation will take a proportionate approach to risk: i.e. the greater the level of population served, the greater the level and scale of monitoring for drinking water safety purposes. The new legislation will encompass the concept of "all practicable means" which in effect requires small suppliers to do only what is practicable. However, given current international experience, most suppliers are expected to be able to adapt existing drinking-water safety technologies to small-scale community situations with operating costs scaled to suit.
16. Water supply catchments management - the Ministry for the Environment is currently developing a national environmental standard on human drinking water sources. This will complement the proposed Bill to provide better management of human drinking water from "source to tap". The national environmental standard is expected to involve monitoring, grading and reporting of suitability of human drinking water sources, and an assessment of risk of contamination in the catchment.
17. Promoting water demand management - SDPoA may examine tools to improve efficiency and education programmes to improve behaviour leading to less demand for water (project outcomes have yet to be determined). Some local authorities are undertaking environmental education to encourage water efficiency and changes in behaviour of public and industry to reduce water use and pollution discharges into water.
18. Funding of irrigation infrastructure - the Ministry of Agriculture and Forestry is currently examining options for addressing impediments to irrigation development. This work will be linked with the SDPoA water work programme and MED's regional development work programme.
19. Tourism water and wastewater infrastructure project: In 2003, MED, with the Ministry of Tourism, commissioned research into the tourism demand on water and sewerage infrastructure in four case study areas - Rotorua, Kaikoura, Queenstown Lakes and Stewart Island. The study concluded that small communities with small ratepayer bases and high visitor numbers may be unable to fund the upfront capital investment required to build water and wastewater infrastructure that is adequate to meet the additional visitor demand. A subsidy scheme is to be introduced in the 2004/2005 Budget, and other forms of assistance such as capacity building will be addressed. Such communities do, however, have the mechanisms to fund operating costs.
Transport
20. Land Transport Management Act 2003: Amongst other things the LTMA permits public private partnerships in road provision and has extended the objectives of transport agencies to include the Government's sustainable development objectives. Improved integration of planning documents, including recognition of demand management and passenger transport options are also required by the LTMA. The transport sector is presently in a transitional phase in adopting these requirements.
21. Regional Transport Fund: This fund, managed by Transfund, was established to encourage regional development (covering roading and alternatives to roading) under the 2002/2003 National Land Transport Programme. $22.5 million per annum is available for expenditure on regions with acute needs. Expenditure is currently focused on the acute-need regions of Northland and Tairawhiti, which have suffered from under-investment in transport infrastructure and increasing pressure on their roading, particularly from the forestry sector.
22. Surface Transport Costs and Charges study (STCC): The Ministry of Transport is considering the costs associated with the use of various land transport modes and their implications for achieving the objectives of the New Zealand Transport Strategy. The aim of this work is to improve New Zealanders' understanding of the costs imposed by land transport on the economy, society and the environment, and what level of charges are currently applied to cover these costs. It considers both road and rail transport. This work will inform future decisions on the level and allocation of transport related costs and charges within the economy and across transport.
23. Travel demand management: The Travel Behaviour Change Steering Group is an informal cross-agency group formed in December 2003 to clarify funding arrangements for a range of travel behaviour change and travel demand management initiatives. The Ministry of Transport facilitates the Steering Group and Transfund, the Energy Efficiency and Conservation Authority (EECA), the Land Transport Safety Authority (LTSA) and the Ministry for the Environment (MfE) were founding participants. Other agencies, including the New Zealand Police, Ministry of Health and Ministry of Education, will be invited to participate.
24. Auckland land transport (funding): This component includes (subject to the acceptance and implementation of governance and regulatory issues):
- A 5 cents a litre increase in fuel excise duty (FED) and an equivalent increase in light road user charges (RUC) on diesel vehicles from 1 April 2005 (legislation required);
- Regional allocation of these additional funds and a further $900m allocation to Auckland from the Crown Account over the next 10 years;
- Indexation of FED and RUC (legislation required).
25. $200 million investment in rail: As part of the agreement with Toll Holdings Limited for the Crown to purchase the track and associated infrastructure, the Crown will invest $200 million over 5 years to upgrade the rail infrastructure to improve its performance, efficiency safety and reliability.
26. Funding of passenger clearance services: Recovery of costs at the border (from government agencies for the cost of providing bio-security, customs etc.) is under consideration. One of the options would result in greater costs for smaller regional airports than for larger airports with higher passenger flows. This could have implications for the viability of those airports and hence have follow-on effects across other infrastructure in those regions.
Telecommunications
27. Project PROBE: the Government has subsidised the rollout of broadband so that it will be available to all schools and communities by the end of 2004. This initiative will also result in increased competition in the market for broadband. Project PROBE is currently in its implementation phase.
28. Advanced network: an Advanced Network provides the very high bandwidth needs necessary for universities and other research institutions. New Zealand is one of only a few developed countries that does not have an Advanced Network in place. A business case for an Advanced Network in New Zealand is currently under development - this is being led by MoRST in collaboration with MED and other agencies.
29. Digital strategy: there is concern that the productivity benefits that use of ICTs can generate are not being realised. A Digital Strategy is currently under development which will set out means by which the necessary conditions can be created and how the benefits may be realised, including the respective roles of government, communities and private providers.
30. Local loop unbundling: officials are providing advice on the Telecommunications Commissioner's report regarding unbundling of the local loop. This is a complex issue and the decision will have significant implications for the form of investment in the sector, competition and user outcomes. A decision by the Minister of Communications is expected in May 2004.
Back to Top