The Kākā by Bernard Hickey
Is saving one minute of a politician's time worth nearly $1 billion?

Is saving one minute of a politician's time worth nearly $1 billion?

Simeon Brown hopes to save 12 mins in taxi trip to airport via tunnel that others say may cost over $10b; 205 NZers migrate each day; 110/day go to Australia; Govt talking NZ into deeper recession
Is speeding up the trip to and from Wellington airport by 12 minutes worth spending up more than $10 billion? Photo: Lynn Grieveson / The Kākā

TL;DR: The six news items that stood out to me in the last day to 8:26 am today are:

  1. The Lead: Transport Minister Simeon Brown announced yesterday he had asked Waka Kotahi-NZTA to again consider digging a 4-km-long four-lane motorway tunnel from The Terrace to Kilbirnie, shocking Wellington’s transport planners yesterday, who said the $10-billion-plus cost was prohibitive and wasteful. (See more detail and analysis below.)

  2. Migration: Stats NZ reported yesterday a record-high 226,000 non-New Zealand citizens migrated here in the year to February, while a record-high 74,900 New Zealand citizens migrated elsewhere, with just over half leaving for Australia. That equals a full A320 each day, with most getting off in Australia.

  3. Housing: Construction Industry Council executive director Tommy Honey told RNZ last night the Government’s freezing of funding for Kāinga Ora and water infrastructure was provide “weak” and “vague” signals about future pipelines for infrastructure and housing was helping to drive many builders closer to collapse. (See more detail and quotes below)

  4. Economy: A BusinessNZ-BNZ survey published yesterday found services sector activity “came to a screaming halt” in March, falling into contractionary territory and the weakest levels in 15 years, outside of the covid lockdown periods. (See more in Charts of the day below)

  5. Housing: Funding to support people leaving emergency housing find other housing and stay in it is due to run out within weeks (June 1) and the Government is refusing to commit to extend it, RNZ’s Lauren Crimp reported yesterday.

  6. Climate: The US National Ocean and Atmospheric Administration (NOAA) last night declared a global coral bleaching event had begun, which would be the second such event in 10 years and the fourth-ever on record. The NOAA said climate models predicted these events would be more frequent and severe as the planet warms. (See more below in Climate Graphic of the day)

(Paying subscribers can see more detail and analysis below the paywall and in the podcast above. We’ll open it up for public reading, listening and sharing if they give permission by getting over 100 likes. Achievement unlocked.)

Is saving Simeon one minute of time really worth $1 billion?

Transport Minister Simeon Brown shocked Wellington’s planners and councillors yesterday by reviving a plan for a four-kilometre-long road motorway tunnel that the locals said could cost over $10 billion in today’s money. That would be $17 billion in 10 years time if construction costs rose as fast as the CPI did over the last decade.

The plan for a road tunnel through a major earthquake fault and a swamp from The Terrace to Kilbirnie was briefly looked at in 2001 before being abandoned for cost reasons. That was before the currently-longest motorway tunnel at Waterview in Auckland (2.4 km) saw major cost inflation to $1.4 billion and before a quadrupling of costs to $5.5 billion to drill the 3.45km City Rail Link (CRL) in Auckland.

A New York University Mellon research project published a report last year called TransitCosts, which found the CRL was the most expensive rail project in the world to build per kilometer. Data in the report showed the CRL cost US$922 million (NZ$1.5 billion) per kilometer.

Brown argued the tunnel could save him 12 minutes on a trip to Wellington airport. That’s the equivalent of about one billion dollars per minute of saved time. Others have estimated each trip through the tunnel would cost $60 if the costs were allocated to drivers through a toll, with the cost double that if a Public Private Partnership model was used.

Brown said Waka Kotahi-NZTA would now look at the idea again.

“Boosting economic growth and productivity is a key part of the Government’s plan to rebuild the economy. The Long Tunnel option aligns strongly with priorities in the Government Policy Statement on Land Transport (GPS), including a reduction in travel times, greater resilience for the SH1 corridor, and improved safety for road users, pedestrians, and cyclists,” Mr Brown says.

“The Long Tunnel option has the potential to deliver up to 15-minute travel time savings between the region and Wellington airport, compared to around 2-3 minutes for the current parallel or diagonal tunnel proposals at Mt Victoria and the Basin.” Brown in a statement.

Wellington Regional Councillor and Transport Committee Chair Thomas Nash (Green) dismissed the rehashed idea, which he estimated would cost at least $10 billion.

“For the cost of what would be New Zealand’s longest road tunnel, we could get new inter-islander ferries and terminals, or surface light rail in Auckland or do most of the upgrades to triple passenger rail in Wellington.”

“It doesn’t help public transport, doesn’t support more housing and makes little or no difference to most drivers. We need to focus on doing the transport basics well in Wellington. Bus ridership is growing fast so let’s put in more bus lanes and bus priority at intersections.

“Rail use is constrained by much-needed maintenance and renewals so let’s fund that. First, get all those priorities properly under way and then we can talk mega projects.” Thomas Nash via X

Funding freezes & job cuts help extend & deepen recession

Another house building firm collapsed last week and the building industry is warning of another bust in the boom-bust cycle if the Government allows ongoing uncertainty about Kāinga Ora’s build programme, school building projects and water infrastructure funding to continue.

Timaru-based Tony Boyce Builders shut down over the weekend after its pipeline of work dried up.

“I was talking to a builder this morning and he normally has two and a half years work in front of him. He does housing all the time. He's down to eight months and he's really worried. He's got a big, big staff. So it's affecting everyone really.

“Everyone sort of is just closing up their wallets because they're worried that there might be a recession in front of us. And the high interest rates, and they're just sort of pulling the pin really.” Tony Boyce talking to Lisa Owen on RNZ Checkpoint last night.

Construction Industry Council executive director Tommy Honey said some of the changes introduced by the new Government were welcome, such as bringing in building materials from overseas, but the funding freezes and a lack of pipeline certainty were worsening the situation. Here’s his comments (bolding mine):

“What we've also noticed is this government's pretty good at stopping things, but not so good at starting them, or not telling us what they're going to start and when.

“I know one architect in Wellington lost $800,000 of architectural fees and projects that they were contracted with the government to do, and they've just completely stopped.

“The industry is actually carrying the brunt of the delays in decision making. The two things that we're not getting from the government that we would love are clear signals and a clear direction. The signals we're getting are weak and the directions a little bit kind of vague at the moment and that contributes to the uncertainty that we're all experiencing.

“If we knew that in July this was going to happen, and in December that was going to happen. So there's not much clarity and a lot of the government's talking points across many sectors really is we will start to think about talking about considering what we will review.

“But boy do we need clarity and we need certainty. Certainty is actually what drives the industry. (Building firms) they will continue to fall over unless someone picks up the can and starts saying, this is what we're going to do, or even this is what we're not going to do. Be absolutely clear about where you're stopping and people will put the energy in a different direction.

“We're either in a recession or facing one and people are concerned about that, and so there's a lot of hesitancy or reluctance and so any strong signals from the government about their investment in say social housing via Kāinga Ora or other things that they want to do. We've got some interesting work happening in the building consenting space trying to reduce regulation, we definitely support that but give us a timeline, a schedule.” Construction Industry Council executive director Tommy Honey talking to Lisa Owen on RNZ Checkpoint last night.

Honey also noted the uncertainty would discourage people buying new homes off the plan and sackings at MBIE would further complicate moves to speed up consenting and approve new building materials.

Charts of the day

Govt funding freezes and job cuts deepen and lengthen recession

BNZ Senior Economist Craig Ebert in BusinessNZ-BNZ PSI report: “The fledgling improvement in the Performance of Services Index (PSI) earlier this year has come to a screaming halt. It is a pattern we have seen in a few indicators of late including last week’s PMI and QSBO. It raises the question that the economy may well be even weaker than is widely appreciated as well as questioning the timing of any recovery.”

It could be worse

A Rangahau Aotearoa-Research New Zealand poll (attached below too) of over 1,000 adults from April 4-8 found trust in Journalists rebounded since Covid, but was below trust in Landlords. MPs remained lowest ranked.

Climate Graphic of the day

Bleached as

NOAA report: “Since early 2023, mass bleaching of coral reefs has been confirmed throughout the tropics, including in Florida in the U.S.; the Caribbean; Brazil; the eastern Tropical Pacific (including Mexico, El Salvador, Costa Rica, Panama and Colombia); Australia’s Great Barrier Reef; large areas of the South Pacific (including Fiji, Vanuatu, Tuvalu, Kiribati, the Samoas and French Polynesia); the Red Sea (including the Gulf of Aqaba); the Persian Gulf; and the Gulf of Aden.”

Comment of the day on The Kākā

Sick of it

“Can someone please explain the need to reduce sick leave? As I understand it business doesn't have to accrue it on the balance sheet like annual leave so is the argument that because it's more people will abuse it? Seems pretty cold hearted to me as we all know one flu can hit us for 5 days and then you're done for the year.” Matt in yesterday’s Dawn Chorus.

Cartoons of the day

Emma Cook for The Waikato Times and via BlueSky

A double negative

Shaun Yeo for The Otago Daily Times-$$$ and via X

Timeline cleansing nature pic


Ka kite ano


The Kākā by Bernard Hickey
The latest daily snapshot of the news, detail, insight and analysis on geo-politics, the global economy, business, markets and the local political economy for citizens and decision-makers of Aotearoa-NZ.