The floods of 27 January and Cyclone Gabrielle have taken lives and ruined people’s homes and businesses.
What does this tell us, though, about public policy?
Kiwis have taken too much national pride in doing innovative stuff with number eight wire. Can we please drop that cliché? The shoddy work is starting to show; the country’s ageing and vulnerable infrastructure has been exposed. As well as the immediate human impacts of the disasters, it’s plain that we’ve failed to invest enough to future-proof and disaster-proof our roads, railways, ports, inter-island ferries, water services, flood mitigation, power distribution…
You can add to the list if you want, but it’s a very expensive list. When you have a load of problems like this, a good way to begin is to make such a list. And beside each item, write down what needs to be done to deal with it, and estimate how much it’ll cost.
The political parties could make policy responses to each item, indicating whether they’d fund it, and, if so, when and how. That could then be built into their ‘fully costed’ election manifestos.
If choosing to do nothing, or to cut corners, then they should account for the consequences and costs of living with (or trying to live with) vulnerable and unsustainable infrastructure. At least that would be honest.
We have a history of ducking these awkward policy choices, shelving proposals and doing things too economically if at all. Upfront capital cost is the standard excuse.
But it pays to be wary of politicians who promise lower taxes or rates, rather than invest in sustainable infrastructure, unless you’re prepared to see basic services break down.
Regarding water infrastructure, this is where the government’s Three Waters plan comes in, saying it’d save people from having to pay higher rates.
A typical provincial territorial authority includes communities of pensioners, who speak out at public meetings and are the most likely to vote. They need the town supply but don’t want to pay higher rates or (heaven forbid!) user-charges for raising capital and improving it. And the town is surrounded by asset-rich farmers on tank supply who don’t want to pay for urban water services that they can’t use. The council’s population and rating-base aren’t growing much anyway, so it’s harder to justify raising long-term debt for state-of-the-art plant. If such a council could leverage off a big city’s assets through a combined regional entity, then why not?
The downside, however, is that their own communities would get even less say in the decisions. The financial liabilities would be swept under the carpet by the much bigger balance sheet of a new Water Services Entity.
This arrangement sounds rather too much like the repackaging of sub-prime mortgages that momentarily brought the global economy to a halt in 2008, as bad debts were obscured and risk was under-priced. Sooner or later, there’s a price to pay, and NZ Inc would have to pay it – somehow.
Should such policy solutions for sustainable local services be centralised to an extent that affected communities lose direct ownership and democratic accountability? Perhaps it would be better if townies actually paid the higher rates or user-charges for their water – up front – as the National Party implicitly proposes.
You can’t have a civilised town without public water services. And it has to be paid for somehow.
Three Waters still leaves the environmental problems of catchments and flood management in the hands of the councils – who unfortunately would lose control over the town’s stormwater drains. And the co-governance aspect of Three Waters is reserved for high-level decision-making, far from the flax-roots level where indigenous water-related values actually matter.
New Zealand has a track-record of failing to shoulder the costs of being a developed country. As one attempt to deal with such issues, Three Waters is an innovative way of fudging the politics and perception of risk. I understand the problem; I’m not convinced by the structural ‘solution’.
The present Labour government has a poor record now of centralised restructuring, and this has turned into a series of expensive fiascos. For instance, how’s that new health bureaucracy doing? Not well, according to a (paywalled) report in the NZ Herald. If overloaded emergency departments were a significant part of the problem, for example, it’s not at all clear that disestablishing the DHBs was ever going to be a solution. Maybe things will get better once the ‘teething problems’ are over… But I’d treat the next shake-up with caution.
As a rule, local and central government leaders lack the courage to estimate actual infrastructure deficits and to say out loud what it’ll cost us to rectify them. Meanwhile, people want first-world services, including clean water, but many treat ‘taxes’ and ‘rates’ as dirty words. They don’t want, in effect, to pay for the things they’ve come to expect as integral to the world they inhabit.
If you cut taxes or rates so that I can spend more of ‘my own money’, then, sure, I can buy more water in plastic bottles from a supermarket, but I can’t spend it on making sure my tap water will be drinkable in the future.
Infrastructure looks like it’ll be an election issue, and we should hold the parties to account. The recent disasters are exposing how vulnerable NZ Inc is to systemic failure. Let’s have a frank political debate about it, with full transparency about costs and consequences.