CAPTIONS BY COURTNEY SOLE AND JASON CONRAN. CAPTIONS WERE MADE WITH THE SUPPORT OF NZ ON AIR. WWW.ABLE.CO.NZ COPYRIGHT ABLE 2024 TENA KOUTOU. NAU MAI HAERE MAI. WELCOME TO Q+A. I'M KATIE BRADFORD, FILLING IN FOR JACK TAME. THIS MORNING, ONE OF THE BIGGEST INFRASTRUCTURE PROJECTS IN NEW ZEALAND'S HISTORY ` HOW DID THE CITY RAIL LINK GO SO FAR OVER TIME AND OVER BUDGET? I'VE SPOKEN TO PEOPLE IN THE INDUSTRY; I'VE SPOKEN TO PEOPLE IN AUSTRALIA, AND THEY THINK PROJECTS OF THIS SIZE ARE ACTUALLY ALMOST IMPOSSIBLE TO PRICE CORRECTLY. AND WE'RE LIVE FROM THE FIRST NATIONAL PARTY CONFERENCE OF THE LUXON-LED GOVERNMENT. BUT WE BEGIN THIS MORNING WITH LOCAL GOVERNMENT. WHILE OVERALL INFLATION IS SLOWING, RATES BILLS ARE HAMMERING HOMEOWNERS, WITH MANY LOOKING AT PAYING HUNDREDS OR EVEN THOUSANDS MORE EACH YEAR. BUT AT THE SAME TIME, THE FINANCIAL POSITIONS OF MANY COUNCILS CONTINUES TO BE DIRE. FORMER LOCAL GOVERNMENT MINISTER AND LABOUR MP KIERAN MCANULTY IS HERE WITH US. GOOD MORNING. THANK YOU FOR JOINING US. THERE HAVE BEEN WARNING FOR SOME TIME ABOUT THOSE RATE RISES. COULD LABOUR HAVE DONE MORE TO STOP THOSE? LET'S NOT FORGET THE WATER LAW REFORMS ARE AN ATTEMPT TO ADDRESS THE MASSIVE ISSUES FACING HOUSEHOLDS AROUND RATES. ALSO LOOKING TO THE FUTURE OF LOCAL GOVERNMENT THAT CAME UP WITH RECOMMENDATIONS OF AN ADDITIONAL REVENUE STREAMS. BECAUSE PRETTY MUCH RATES AS THEIR ONLY OPTION AT THE MOMENT. IT IS CLEAR TO ME THAT IN THE NEXT FEW YEARS RATES IS GOING TO BE THE BIGGEST ISSUE FACING HOUSEHOLDS. THE RATING ISSUE ITSELF IS UTTERLY UNSUSTAINABLE. WE NEED TO SORT OUT. COULD LABOUR HAVE MOVED FASTER? SHOULD YOU HAVE LOOKED AT THOSE OPTIONS? SHOULD YOU HAVE MOVED FAST ON THIS LOCAL GOVERNMENT REFORMS OR THREE WATERS? WHAT CAME OUT OF THE REVIEW WAS THAT THE LOCAL GOVERNMENT SECTOR HAD SINCE REPORTED TO THE NEW GOVERNMENT ABOUT IT. THEY HAVE DISMISSED IT OUT OF HAND. THAT IS DIRECT FEEDBACK FROM THE SECTOR COMING FROM THAT REVIEW AS TO HOW THINGS COULD HAVE REVIEW AS TO HOW THINGS COULD CHANGED TO MAKE IT EASIER FOR HOUSEHOLDS. THE MINISTER DISMISSED OUT OF SIGHT. LET'S NOT FORGET THAT THEY REVERSE WATER REFORMS WHICH WOULD HAVE SAVED THOUSANDS OF DOLLARS PER YEAR. ONE YEAR AFTER REVERSING THOSE WATER REFORMS, PEOPLE ARE FACING THOUSANDS OF DOLLARS OF INCREASES. YOU SPENT THOUSANDS OF DOLLARS ON WATER REFORMS. DID WE SEE A SINGLE PIPE AS A RESULT OF THAT? YOU HAD SIX YEARS TO DO SOMETHING. I THINK YOU HAVE TO BE CAREFUL SAYING WE WASTED $1 BILLION. AT WHAT POINT WAS IT WASTED? THE OTHER ENTITIES FOR ALIGNING UP. THAT MONEY WAS SPENT TO SET THAT UP. ONLY POINT AT WHICH THAT MONEY WAS WASTED WAS WHEN THIS GOVERNMENT DECIDED TO SCRAP THE REFORMS ENTIRELY AND GO BACK TO THE STATUS QUO. BECAUSE ALL OF THAT REFORM OVER THE YEARS, AND WE ARE TALKING ABOUT FUNDAMENTAL CHANGES HERE, ALL THAT WORK AND ALL THE INVESTMENT GONE. I DON'T ACCEPT THAT WE WASTED THAT MONEY, BECAUSE IT IS ULTIMATELY ON THE GOVERNMENT. YOU TALK ABOUT THE FUTURE OF LOCAL GOVERNMENT REPORT. WE HAVE SEEN REPORT AFTER REPORT ON THE SECTOR. WE KNOW THEY HAVE A HUGE MANDATE, NOT ENOUGH MONEY. WHEN I WE ACTUALLY GOING TO SEE ANYTHING DONE? LIKE INFRASTRUCTURE, WE SEE A LOT OF TALK AND NOTHING CHANGES. IT SHOULD BE THIS TIME. THE REPORT INTO THE LOCAL GOVERNMENT WAS A COMPREHENSIVE REPORT. A LOOK INTO THE STRUCTURE AND A LOT OF OTHER FACTORS. IT IS CLEAR THE LOCAL GOVERNMENT IS NO LONGER FIT FOR PURPOSE, BUT ALSO THAT THE RATING SYSTEM IS UNSUSTAINABLE. IF YOU LOOK AT WATER, IT HAS GONE BACK TO THE COUNCILS NOW. AND EVEN IF THEY PURSUE WHAT THE CURRENT GOVERNMENT IS DOING, IT IS NOT GOING TO GIVE THEM THE SAVINGS THAT THEY NEED. AND EVERY SINGLE RECOMMENDATION FROM THAT REVIEW, THE ONLY OPTION THEY HAVE IS RATES. I HAVE BEEN QUIETLY TALKING TO COUNCILS AND GETTING FEEDBACK ON THE LOCAL AREA, BUT ONE THING THAT STANDS OUT TO ME AS THE BLOKE THAT I SPOKE TO A COUPLE OF WEEKS AGO AND LOOKED ME AND I AND SAID, I'VE JUST HAD TO SELL MY FAMILY HOME BECAUSE WE CANNOT LONGER AFFORD THE RATES. IF THE MINISTER THINKS THAT THIS IS AN ISOLATED INCIDENT, HE IS KIDDING HIMSELF, BECAUSE THE MORE I'M TRAVELLING AROUND, THE MORE I'M HEARING ABOUT THIS. I AM TALKING TO LOCAL BUSINESSES WHO ARE FACING INCREASES OF 5000, 6000, $7000 A YEAR. THAT INCREASES WOULD STILL BE HAPPENING. 50% OF RATES INCREASES FOR MANY COUNCILS AS FOR WATER, AND AROUND TOTAL EXPENDITURE FOR COUNCILS IS AROUND 83%, AND THE GOVERNMENT IS DOING NOTHING ABOUT IT. THE GOVERNMENT WOULD SAY THEY ARE LOOKING AT NEW FUNDING AND FINANCING OPTIONS. YOU ARE TALKING ABOUT THE RATING SYSTEM BEING UNSUSTAINABLE AS IT IS. WHAT NEEDS TO CHANGE? THEIR NEEDS TO BE A CLEAR COMMITMENT FROM LOCAL GOVERNMENT TO ANY CENTRAL GOVERNMENT GOING FORWARD THAT THEY WILL NOT IMPOSE CHANGES WITHOUT THE FUNDS TO BACK THAT UP. OVER SUCCESSIVE GOVERNMENTS, THEY HAVE BEEN ASKED TO DO MORE AND MORE AND MORE, BUT THE ONLY WAY IN WHICH THEY CAN PAY FOR THOSE IS THROUGH RATES. BUT AT THE SAME TIME, IT NEEDS TO ABSOLUTELY BE OVERHAULED, BECAUSE IF WE DON'T GIVE COUNCILS MORE TOOLS, THE ONLY OPTION THEY HAVE IS RATES, AND WE CAN LOOK FOR OTHER WAYS ` PPPs AND OTHER THINGS THAT THE GOVERNMENT HAS. BUT AT THE END OF THE DAY, THE CORE RESPONSIBILITY OF COUNCILS IS COSTING A LOT OF MONEY, AND ONLY OPTION THEY HAVE IS TO INCREASE RATES, SO WITHOUT FINDING ALTERNATIVE MEANS OF FUNDING INFRASTRUCTURE PROJECTS, THE CORE FUNCTION OF COUNCILS IS GOING TO INCREASE. YOU'VE GOT A SUITE OF OPTIONS. I SAID TO LOCAL GOVERNMENT NEW ZEALAND, RAY, HERE ARE THE RECOMMENDATIONS. I WANT TO HEAR FROM YOU GUYS AS TO WHAT YOU SUPPORT. I'M NOT INTERESTED IN GOING DOWN ANOTHER DIVISIVE ARGUMENT. I WANT TO KNOW WHAT THE SECTOR THINKS OF THESE RECOMMENDATIONS. IF THEY CAN COME BACK AND TALK AMONGST THEMSELVES AND DEMONSTRATE SUPPORT FOR A CERTAIN NUMBER OF RECOMMENDATIONS, MY PROMISES I WOULD TAKE IT. AND HAS BEEN DISMISSED. THERE HAS BEEN DISMISSED IN AN ARROGANT WAY FOR SOME IT WAS CALLED WHITE NONSENSE. IT IS ALL WELL AND GOOD FOR THE MINISTER TO SET UP IN PARLIAMENT WOKE NONSENSE* BUT HE CAN'T TALK TO THAT HOMEOWNER AND SAY THEIR CONCERNS ARE NONSENSE. HOW ARROGANT AND OUT OF TOUCH? THE FACT IS THAT COUNCILS HAVE NO CHOICE ` THEY HAVE ONE HAND TIED BEHIND THEIR BACK. ROUGHLY 83% OF THEIR EXPENSES AS WATER. WE HAD A PLAN IN PLACE, THE GOVERNMENT SCRAPER, NOW THEY ARE POINTING THE FINGER AT COUNCILS. AS YOUR PREDECESSOR PUT IN THOSE COMMISSIONERS, THEY SEEMED TO HAVE DONE A REASONABLE JOB THERE IN TAURANGA, DO WE NEED MORE OF THAT? DESPITE THAT, WE STILL HAVE LOW TURNOUT AND COUNSEL. AS THE CURRENT MODEL WE'VE GOT THE PROBLEM? I THINK IT IS CERTAINLY NO LONGER FIT FOR PURPOSE. I WOULD NEVER WANT TO SEE A GOVERNMENT IMPOSING ON LOCAL RELATIONS. I WOULD NEVER WANT TO SEE COMMISSIONERS BECOME THE NORM. ULTIMATELY WHAT HAPPEN IN TAURANGA ` THE RATES STILL INCREASED. I WAS UNDER A LOT OF PRESSURE AS MINISTER TO INTERVENE, BUT FROM MY PERSPECTIVE, THE STATUTORY REQUIREMENTS FROM THE COUNCIL WERE BEING MET. I WASN'T INTERESTED IN WHAT WAS ESSENTIALLY RELATIONSHIP BREAKDOWN. IT IS A VERY HIGH BAR FOR A COMMISSIONER TO COME IN. I THINK THERE IS A CASE FOR AMALGAMATIONS. AND GREATER WELLINGTON THERE IS TALK ABOUT THAT. WITH THAT MAKE SENSE, GIVEN YOU'VE GOT THREE OR FOUR REGIONS IN WAIRARAPA. THERE ARE CASES FOR THERE TO BE ONE WAIRARAPA DISTRICT COUNCIL. WE MUSTN'T KID OURSELVES AT THE SAME TIME ` RATES WILL INCREASE AS LONG AS THE GOVERNMENT KEEP PUTTING IT BACK ON THEM. A FEW LISTEN TO THE FINANCE MINISTER AND THE PRIME MINISTER, THEY KNOW DEEP DOWN THEY'VE STUFFED UP. THEY KNOW BY REVERSING WATER REFORMS THAT AT THEIR MAYOR. AT THE NEXT LOCAL GOVERNMENT ELECTION THERE WILL BE GOOD MAYORS AND GOOD COUNSELLORS WHO LOSE THEIR JOBS THROUGH NO FAULT OF THEIR OWN. KAINGA ORA HAS OBVIOUSLY BEEN A BIG ISSUE. DID LABOUR DROP THE BALL? SAYING, GO OUT AND BUILD HOUSES BUT NOT KEEPING AN EYE ON IT? I DON'T THINK SO. WHEN YOU LOOK AT THE NUMBER OF HOUSES THAT WERE BUILT. THEY PUT A PRESS RELEASE OUT TO SAY THERE WERE 13 HOMES A DAY BUILT OVER THE LAST 12 MONTHS. WHEN THE REVIEW CAME OUT AND THE MINISTERS WERE TRYING TO PUT THE BOOT AND, THEY WERE TALKING ABOUT THE DEBT; THEY WERE NOT TALKING ABOUT THE ASSETS. YES, THE DEBT HAS INCREASED, BUT THE VALUE OF THE ASSETS HAVE ALSO INCREASED. WE ARE TALKING ABOUT PEOPLE'S HOMES HERE AS WELL. THOUSANDS OF PEOPLE ` 14,000, 15,000 HOMES BETWEEN COMMUNITY HOUSING PROVIDERS AND KAINGA ORABEING BUILT. WHEN YOU COMPARE THAT TO WHAT THIS GOVERNMENT IS DOING, THEY ARE STOPPING KAINGA ORA BUILDING HOMES. 750 PER YEAR COMPARED TO 5000 JUST WITH KAINGA ORA LAST YEAR. DID YOU FAIL TO KEEP AN EYE ON THEM, DID THE BOARD NEED TO GO? I KNOW THERE IS AN ISSUE OF A DEBT VERSUS ASSET, BUT SOMETHING HAS GONE WRONG THERE, RIGHT? IT IS RICH OF THE NATIONAL PARTY TO SAY THAT ` KAINGA ORA HAS WELL OVER 14,000 HOMES, AND THE NATIONAL PARTY WENT BACKWARDS THAN THEY WERE IN GOVERNMENT. THE NATIONAL PARTY DOESN'T BELIEVE IT IS THE GOVERNMENT RESPONSIBILITY TO BUILD HOUSES; WE DO. IF YOU'RE GOING TO DO THAT, YOU NEED TO FIND IT. WE STAND BY THE OUTCOME. COULD THERE BE MORE EFFICIENCIES IN KAINGA ORA? ABSOLUTELY. IT STARTED IN 20 EIGHTEENTHS.THERE ARE OF COURSE GOING TO BE INEFFICIENCIES. BUT LOOK AT THE RESULTS. WHEN MEGAN WOODS WAS THE HOUSING MINISTER SHE WAS CONSTANTLY LOOKING AT THE INEFFICIENCIES. THERE WERE ALWAYS BE EFFICIENCIES TO BE FOUND FORCE OF YOUR TALKING ABOUT A MASSIVE BUILD PROGRAM OVER THE WHOLE COUNTRY. AT THE SAME TIME, COMMUNITY HOUSING PROVIDERS, YOU LOOK AT THE TRAJECTORY NOW. THIS IS EXACTLY WHAT THEY WANT US TO BE TALKING ABOUT ` $400 MILLION GONE FOR LARGE-SCALE PROJECTS UNDER KAINGA ORA. THEY ARE SCRAPPING THE FIRST HOME GRANT WHICH IS ONLY A SMALL PORTION OF THE MOMENTUM BUILT UP OVER THAT TIME ` IT IS IT IS NOT GOING TO MAKE A DENT. CHRIS BISHOP HAS SAID HE WANTS HOUSE PRICES TO FALL. EVEN JUSTIN ARDERN JACINDA ARDERN SAID THERE WERE HOUSE PRICES SHOULD BE STABLE. I DON'T THINK HE WENT AS FAR TO SAY HOUSE PRICES FALL. IF HE DID, THAT IS PRETTY BOLD, BECAUSE NO ONE ELSE HAS SAID IT. ULTIMATELY THE PRICES NEED TO BE AFFORDABLE. YOU CAN EITHER STABILISE PRICES OR INCREASE WAGES FOR SO WHEN YOU LOOK AT WHAT THE GOVERNMENT HAS DONE, WHY HAVE THEY DONE? BY BRINGING BACK INTERESTED DUCT ABILITY, THAT IS JUST INCENTIVISING NEW BUILDS, AND IT IS INCENTIVISING COMPETITION ON SPECULATORS FOR EXISTING HOMES. THE EXACT SITUATION WHEN HERITAGE THAT WAS CAUSING HOUSE PRICES TO BECOME UNAFFORDABLE. DO YOU THINK HOUSE PRICES NEED TO FALL? WE'RE NOT GOING TO SEE WAGES GO UP ANYTIME SOON, ARE WE? NOT AFTER THEY SCRAPPED FAIR PAY. DO YOU THINK THEY NEED TO FALL? I DON'T THINK THEY NEED TO FALL, BUT THEY CERTAINLY DO IF WAGES DON'T GO UP. IF THE GOVERNMENT DID NOT SCRAPPED FAIR PAY AGREEMENTS AND FOCUSED ON STABILISING WAGES AND HOUSE PRICES, IT WOULD BE AFFORDABLE. OTHERWISE, THE ONLY WAY HOUSES CAN BECOME AFFORDABLE AS OF HOUSE PRICES FOR. HOUSE PRICES FALL. ALL THE TALK ABOUT COUNCILS GOING FOR GROWTH, IF THEY DON'T HAVE MONEY, THEY WON'T PUT THE INFRASTRUCTURE AND NO HOUSES CAN BE BUILT ON THAT LAND. BERNARD HENKE SAYS NEW ZEALAND IS A CONNELLY IS A HOUSING MARKET. IS IT DANGEROUS TO BE SO RELIANT ON INTEREST RATES, WHEN THEY COME DOWN, IT FEELS GOOD, WHEN THEY GO UP, IT IS TERRIBLE. IT IS HARD TO MAKE LONG-TERM INFRASTRUCTURE AS WELL WHEN WE ARE SO FOCUSED ON WHAT THE RATES ARE. IT WAS POSSIBLY BIPARTISAN. IT WAS SUPPOSED TO GIVE THE INDUSTRY CONFIDENCE THAT WE ARE WILLING TO PUT THAT TO ONE SIDE. WE HAVE SAID TO CHRIS BISHOP, BRING US INTO THE MIX, WE WILL GIVE OUR FEEDBACK, WE WILL TRY TO FIND A PLACE THAT WE ARE BOTH MORE OR LESS COMFORTABLE WITH SO THAT WHEN THERE IS A CHANGE OF GOVERNMENT, WE DON'T FEEL THE NEED TO MIX IT UP TOO MUCH. IT WILL GIVE THE SECTOR CONFIDENCE, AND HOPEFULLY IT WILL DRIVE MORE INVESTMENT FOR SUCH WHAT WAS HIS RESPONSE TO THAT? HE SAID HE IS KEEN. WE HAD TO TAKE HIM AT HIS WORD FOR SUPPER DO GET ALONG WITH HIM. I HOPE HE IS SERIOUS AND HIS COLLEAGUES TAKE HIS LEAD. ULTIMATELY GOVERNMENT AND HOUSING AND INFRASTRUCTURE, THEY JUST NEED CERTAINTY, THEY JUST NEED CONFIDENCE THAT THINGS AREN'T GOING TO COME IN THREE YEAR CYCLES. ULTIMATELY WE WILL HAVE SOME FUNDAMENTAL DISAGREEMENTS. YOU CAN SEE PLAYING OUT AND HOUSING. YOU CONSIDER LISETTE PLAYING AT A LOCAL GOVERNMENT. AT IN TERMS OF INFRASTRUCTURE, WE HAVE TO WORK TOGETHER. ELEPHANT IN THE ROOM ` YOU ARE MUCH TALKED ABOUT IS THE NEXT LABOUR LEADER. IF CHRIS HIPKINS WAS TO STAND DOWN TODAY, WOULD YOU PUT YOUR HAT IN THE RING? FESTIVAL, I DON'T THINK HE WILL. I THINK HE IS DOING A GOOD JOB. AND EVERYTHING WILL ELECTION WHEN A PARTY HAS BEEN VOTED OUT, THEY HAVE ARGUED AMONGST THEMSELVES, THEY HAVE DONE ALL SORTS OF STUFF IS UP WE HAVEN'T DONE ANY OF THAT AND THAT IS ALL DOWN TO CHIPPY'S LEADERSHIP. IF THAT DIDN'T HAPPEN, I WOULD BE INTERESTED. HAVE PEOPLE BEEN ASKING YOU TO BEHIND-THE-SCENES? HAD THEY BEEN SAYING, KAREN, THINK ABOUT IT? LABOUR HAS BEENI VERY QUIET. THE ONLY PEOPLE I TALK ABOUT THIS ARE JOURNALISTS. THEY HAVE GOT THE SAME ANSWER FROM ME EVERYTHING THE TIME THEY HAVE ASKED ME TO STOP I JUST DON'T WANT TO. I'M NOT INTERESTED. HE IS GENUINELY A MATE, AND I HUNDRED PERCENT BACK HIM. EVEN IF THERE WAS A VACANCY, I WOULD HAVE PUT MY HAND UP BECAUSE I JUST DON'T WANT THE JOB. I'M HAPPY WHERE I AM. BUT YOU GUYS HAVE TO RECOGNISE THAT IF YOU ARE THE ONLY ONES TALKING ABOUT IT... AT MEETINGS, ARE PEOPLE BRINGING IT UP WITH YOU? KNOW. I GO ALL AROUND THE COUNTRY. I WAS IN THE SOUTH ISLAND. I AM ALL AROUND THE SHOP. PEOPLE DON'T TALK ABOUT THAT. THEY ARE MORE WORRIED ABOUT RENTS GOING UP AT RECORD LEVEL OF INCREASE AROUND 12 MONTHS, RATES GOING UP AND INSURANCE. COINCIDENTALLY THE THREE THINGS THAT ARE DRIVING DOMESTIC INFLATION AND STOPPING ARE GETTING LOWER THAN IT SHOULD BE. AT THE END OF THE DAY, HONESTLY I THINK IT IS ONLY YOU GUYS TALKING ABOUT IT. FLIP IT AROUND ` IT IS GOOD FOR PARTIES TO HAVE A SUCCESSION PLAN FOR SO WHY NOT SAY I AM READY AND WAITING FOR THE CALL COME? WELL, BECAUSE WE BACK HIM TO WIN THE NEXT ELECTION. I ACTUALLY THINK HE HAS A BLOODY GOOD CHANCE OF WINNING IT. POLLING NOW COMPARED TO OTHER PARTIES AFTER AN ELECTION LOSS. WE HAD A BIT OF A CHANGE AFTER THE LAST ELECTION. I NOTICE THERE IS AN INCREASED LEVEL OF SATISFACTION WITH THE GOVERNMENT. PEOPLE ARE COMING TO LABOUR ASKING WHAT OUR ALTERNATIVE PLANNERS. NORMALLY TAKES ABOUT 18 MONTHS; IT IS HAPPENING NOW. PEOPLE ARE LOOKING AT AN ALTERNATIVE WAY. I THINK IT IS BECAUSE SOME PEOPLE VOTED FOR A CHANGE, AND THEY DON'T BILLY LIKE IT. WE ARE WORKING ON THAT. IT IS NOT REALLY HELPFUL, PARTICULARLY WHEN THESE CONVERSATIONS ARE NOT HAPPENING IN THE PARTY. NOT MANY MPS IN THE PARLIAMENT CAN SAY THEY HAVE THE UNANIMOUS SUPPORT OF CAUCUS, BUT CHRIS HIPKINS CAN. YOU GUYS JUST HAVE TO GET ON WITH IT. IF EVERYTHING HAD'VE GONE TO PLAN, AUCKLAND'S CITY RAIL LINK WOULD BE UP AND RUNNING BY NOW. BUT INSTEAD, THE BIGGEST CITY'S BIGGEST EVER INFRASTRUCTURE PROJECT IS WAY OVER THE ORIGINAL BUDGET, AND YEARS BEHIND THE ORIGINAL SCHEDULE. AND WHAT DOES THAT SAY ABOUT HOW NEW ZEALAND DOES INFRASTRUCTURE? THE CITY RAIL LINK'S CEO SEAN SWEENEY IS ON THE WAY OUT, HAVING TAKEN UP A JOB TO RUN THE CONSTRUCTION OF DUBLIN'S NEW METRO LINE. I STARTED BY ASKING HIM WHY THE TIMELINE AND COSTS BLEW OUT. I'D JUST LIKE TO SAY THAT SINCE I COMMENCED, WE'VE CHANGED THE START DATE ONCE AND THE BUDGET'S CHANGED TWICE. UNTIL YOU GET INTO CONSTRUCTION AND INTO CONTRACT WITH YOUR MAJOR BUILDER, DATES AND BUDGETS ARE ESTIMATES AT BEST. SO THE BUDGET GOT CHANGED WHEN I TURNED UP BECAUSE I ADVISED THE BOARD ON THE FIRST DAY THAT I DIDN'T THINK THE NUMBERS WERE RIGHT BASED ON PRIOR EXPERIENCE, COS I KNOW THERE'S AN ENORMOUS AMOUNT OF PRESSURE ON PROJECT TEAMS TO GET A LOW NUMBER TO GET A PROJECT UP. AND THEN WE HAD COVID, AND WE HAD TO REFUND DUE TO ALL THE IMPACTS OF COVID, AND THAT PUSHED THE DATE OUT AS WELL. WHY DID WE GET IT SO WRONG TO START WITH? WHY IS IT SO HARD TO GET THOSE NUMBERS RIGHT? WELL, THERE'S A FEW THINGS THAT CONTRIBUTE TO THAT. UH, THERE IS` THERE'S A LOT OF PRESSURE TO GET NUMBERS DOWN. THERE'S A LOT OF ACADEMIC PAPERS WRITTEN ABOUT THE PRESSURE ON TEAMS TO PRICE LOW. UM, WHEN YOU'RE COMPETITIVELY FUNDING ` YOU'RE BIDDING AGAINST OTHER THINGS INSIDE GOVERNMENT ` YOU PROBABLY DON'T WANT TO BE THE MOST EXPENSIVE BIT IN THE ROOM. YOU PROBABLY DON'T WANT TO BE THE MOST EXPENSIVE BID IN THE ROOM. ALSO, THESE PROJECTS ARE JUST INCREDIBLY COMPLEX TO PRICE. AND I'VE SPOKEN TO PEOPLE IN THE INDUSTRY, I'VE SPOKEN TO PEOPLE IN AUSTRALIA, AND THEY THINK PROJECTS OF THIS SIZE ARE ACTUALLY ALMOST IMPOSSIBLE TO PRICE CORRECTLY, AND THAT'S A CHALLENGE FOR THE INDUSTRY. WHEN ARE PEOPLE GOING TO ACTUALLY GET ON THE CITY RAIL LINK ` GET TO WORK, COMMUTE INTO THE CITY OR WHEREVER THEY NEED TO GO? WELL, THAT'S NOT REALLY A QUESTION I CAN ANSWER, BECAUSE THAT'S GOING TO BE ANSWERED BY A.T. AND KIWIRAIL. THEY'RE TALKING ABOUT SOMETIME IN 2026. WELL, WHEN ARE YOU GOING TO HAND IT OVER, THEN? WHEN IS IT GOING TO BE COMPLETED FOR THEM? WE'RE AIMING TO BE COMPLETE END OF NOVEMBER 25 ` PRACTICAL COMPLETION. THAT'S A LONG TIME SINCE AUCKLAND COUNCIL FIRST STARTED TALKING ABOUT THIS. THAT'S, YOU KNOW, 2010. WHY HAS IT TAKEN SO LONG TO GET THERE? UH... (SIGHS) WELL, I WASN'T AROUND AT THE TIME. IT TOOK TILL 2016 TO GET INTO CONSTRUCTION, AND PEOPLE FORGET WHEN CONSTRUCTION STARTED. THE GOVERNMENT WASN'T CO-FUNDING, SO AUCKLAND COUNCIL MADE A PRETTY BRAVE DECISION TO START THE JOB, BUT THEY COULD ONLY START SOME OF IT, BECAUSE THEY DIDN'T HAVE THE MONEY TO COMPLETE THE JOB. SO THEY STARTED IN 2016; THE GOVERNMENT CAME ON BOARD, I THINK, IN 2017, AND SINCE THEN, WE'VE BEEN MOVING AT PACE. BUT THESE THINGS DO TAKE A WHILE. TIME, BUDGET, QUALITY ` THERE'S A JOKE YOU CAN ONLY HAVE TWO OUT OF THREE OF THOSE. YEAH. YEAH. IF WE'RE LUCKY, WE'LL GET ONE, IN THE FORM OF QUALITY? WELL, WE'RE` (SIGHS) WE'RE DEFINITELY FOCUSED ON QUALITY, BECAUSE QUALITY'S FOREVER. UM, IT'S BEEN MY EXPERIENCE ` AND I USED TO SAY TO PEOPLE IN AUSTRALIA ` THAT IF YOU GET THE BUDGET` IF YOU'RE LATE, PEOPLE WILL BE ANNOYED UNTIL THE DAY YOU OPEN; IF YOU GET THE BUDGET WRONG, IT'S USUALLY ONE YEAR'S BUDGET CYCLE, BUT IF YOU GET THE QUALITY WRONG, IT LASTS FOREVER. SO WE'VE` CERTAINLY FOCUSING ON A QUALITY PRODUCT, BUT, UM... IT'S JUST REALLY HARD TO GET ALL THOSE THINGS... ESTIMATED TO A FINE GRAIN OF ACCURACY. THERE'S ENORMOUS UNCERTAINTIES ON THESE SORTS OF PROJECTS. WHEN A CONSTRUCTION FIRM PRICES ONE OF THESE ` IF YOU CAN JUST IMAGINE ` THEY HAVE TO DECONSTRUCT THE JOB INTO TENS OF THOUSANDS OF ELEMENTS. THEY HAVE TO MAKE ASSUMPTIONS ABOUT PRODUCTIVITY ON EVERY ONE OF THOSE ELEMENTS. SO THEY'RE ASSUMING THAT PEOPLE WILL WORK AT A CERTAIN RATE. PEOPLE AREN'T MACHINES. THEY HAVE GOOD DAYS, BAD DAYS. WE HAVE GOOD WEATHER; WE HAVE BAD WEATHER. WE'VE HAD FLOODS. WE'VE HAD COVID. WE'VE HAD DROUGHTS. ALL THOSE SORTS OF UNCERTAINTIES IMPACT` WE'VE HAD SUPPLY CHAIN PROBLEMS. SO ALL OF THOSE THINGS IMPACT ON THE END TIME AND COST. AND, YOU KNOW, I` (CHUCKLES) I'D SAY, NOT GLIBLY, WE ONLY HAVE LIMITED ABILITY TO FORESEE THE FUTURE. WHY DO WE NOT LOOK AT STRINGING PROJECTS TOGETHER? YOU KNOW, LONG TALK OF A SECOND HARBOUR CROSSING, THE FAILED LIGHT RAIL PROJECT ` WHATEVER PROJECT WE END UP GETTING IN TERMS OF GETTING TO THE AIRPORT, WHY DO WE NOT TRY AND DO THESE ALL AT ONCE? WELL, THAT'S A BIG TOPIC. UM... IT'S MY PERCEPTION... THAT WE HAVE LOST THE DESIRE TO DO... PROGRAMMES OF MAJOR PUBLIC INFRASTRUCTURE. IT'S MY PERCEPTION THAT... LOOK, THERE WAS A LOT OF NOISE CAME ON THE BACK OF THE THINK BIG PROJECTS OF THE '70S AND '80S. THERE WAS A LOT OF CRITICISM ABOUT GOVERNMENT ` GOVERNMENT CAN'T BUILD THESE THINGS; GOVERNMENT SHOULD GET OUT OF THE WAY, LEAVE IT TO THE PRIVATE SECTOR. WHAT HAPPENED AFTER THAT WAS BASICALLY WE STOPPED DOING MAJOR PUBLIC INFRASTRUCTURE FOR 30 YEARS. I LEFT NEW ZEALAND BECAUSE THERE WAS NOTHING FOR ME TO DO. I WENT TO AUSTRALIA. I CAME BACK HERE FOR THIS PROJECT. BUT THAT'S ONE PROJECT. I WOULD SAY THE COUNTRY FIRST OF ALL NEEDS TO DECIDE... WHAT SORT OF INFRASTRUCTURE DO WE WANT TO TAKE THIS COUNTRY FORWARD. AND I BELIEVE INFRASTRUCTURE IS A FUNDAMENTAL UNDERPINNING OF THE HEALTH AND WEALTH OF A NATION, BUT WE NEED TO HAVE THAT BIG CONVERSATION AS A COUNTRY, NOT DO SORT OF A SERIES OF ONE-OFFS. COS AT THE MOMENT, WE'RE DOING A SERIES OF ONE-OFFS, AND THEY STOP AND THEY START, AS WE'VE SEEN RECENTLY; THAT'S INCREDIBLY HARD FOR THE INDUSTRY TO APPROACH THEM EFFICIENTLY. WE'VE ACTUALLY LOST WHAT I'D CALL THE TIER-ONE CONSTRUCTION INDUSTRY IN NEW ZEALAND IN THE LAST 20 YEARS. IT DOESN'T EXIST ANYMORE. AND THAT'S A PROBLEM FOR THE COUNTRY. WE DON'T HAVE THE CAPACITY INTERNALLY TO DO MAJOR PROJECTS, AND THAT'S BECAUSE THE PIPELINE ISN'T THERE FOR FIRMS TO STAFF AND PLAN AND WORK TOWARDS. HOW FRUSTRATING IS THAT? YOU'VE JUST SAID YOURSELF YOU CAME BACK TO NEW ZEALAND FOR ONE OF OUR BIGGEST PROJECTS, BUT YOU'RE LEAVING. IT'S NOT EVEN GOING TO BE FINISHED, AND YOU'RE LEAVING FOR A MUCH BIGGER PROJECT OVERSEAS. HOW FRUSTRATING IS IT TO WORK HERE? WELL, (SIGHS) BEARING IN MIND THAT I CAME BACK JUST TO WORK ON THIS PROJECT, I'M NOT SURPRISED THAT I'M LEAVING. UM, THE WIDER FRUS` WELL, IS IT A FRUSTRATION OR IS IT A DEBATE? I THINK WE SHOULD HAVE A DEBATE AS A COUNTRY ABOUT WHAT DO WE WANT TO BUILD. AND IF WE HAVE THAT DEBATE IN A BIG WAY, I THINK WE'LL HAVE A BIG LIST, AND THAT WOULD ENABLE PEOPLE LIKE ME AND A CONSTRUCTION INDUSTRY TO STAY AND MOVE FORWARD. SO I` LOOK, I'VE FOLLOWED PROJECTS AROUND THE WORLD, SO IT'S... IT'S NOT FRUSTRATING FOR ME. I'D LIKE TO SEE NEW ZEALAND HAVE A REALLY HARD CONVERSATION ABOUT WHAT WE WANT TO DO GOING FORWARD, THOUGH. YOU MENTIONED WORKERS THERE, AND I JUST WAS SPEAKING TO ONE OF YOUR WORKERS WHO'S OFF TO AUSTRALIA NEXT WEEK. MM. HE SAID, YOU KNOW, THE JOBS ARE THERE, AND I SAID TO HIM, 'WELL, WE NEED PEOPLE LIKE YOU HERE. ABSOLUTELY. AND HE SAID, 'YEAH, WE DO.' YOU KNOW, HOW HARD IS IT TO GET THE WORKERS TO COME IN TO TRAIN PEOPLE UP, TO GET THEM TO STAY AND NOT DO WHAT YOU'VE DONE AND GO OFF AND FIND A BIGGER, BETTER PROJECT? WELL, THAT'S THE CHALLENGE OF THESE PROJECTS, BECAUSE WE'RE ESSENTIALLY... A ONE-OFF. SO YOU HAVE TO START FROM SCRATCH. THE LINK ALLIANCE HAD TO BUILD A WORKFORCE TO DO THIS SORT OF WORK FROM SCRATCH. EVERYTHING IS SET UP AS A ONE-OFF, AND THEN IT'S DECOMMISSIONED. SO AT THE MOMENT, WHEN WE DO THESE PROJECTS, THE COUNTRY IS PAYING AN ENORMOUS PREMIUM BECAUSE WE'RE DOING THEM AS A SERIES OF ONE-OFFS. GOING BACK TO MY EARLIER COMMENT, IF WE HAD AN ONGOING HEAVY CONSTRUCTION INDUSTRY HERE CAPABLE OF DOING PROJECTS LIKE OR SIMILAR TO THIS... AND WE USED TO. WE BUILT ALL THE SOUTHERN` THE DAMS IN THE SOUTHERN LAKES, THE TONGARIRO HYDRO. WE HAD THAT CAPABILITY, BUT WE'VE STOPPED DOING IT, AND WE'RE NOW PAYING A VERY HIGH COST PREMIUM FOR ANYTHING WE DO DO. HOW DO WE SOLVE THAT, THEN? WE SEE, YOU KNOW, DIFFERENT POLITICA PARTIES COME INTO GOVERNMENT; THEY CHOP AND CHANGE PROJECTS; IT'S SO POLITICISED. DO YOU HAVE IN YOUR HEAD AN ANSWER TO STOP THAT TO ENSURE THESE PROJECTS DO GO AHEAD LOOK, I'VE HAD CONVERSATIONS WITH POLITICIANS` OR I'VE SAT IN ROOMS WHERE POLITICIANS HAVE TALKED ABOUT THE ISSUE OF THE PIPELINE. THERE'S A VIEW THAT THEY HAVE A RIGHT TO DO THAT; THEY'RE ELECTED ON A MANDATE. I UNDERSTAND THAT VIEW. UM, WHAT I DON'T THINK POLITICIANS OR THE PUBLIC UNDERSTAND IS HOW EXPENSIVE THAT IS MAKING BUILDING IN NEW ZEALAND. SO, YES, WE HAVE THE RIGHT TO DO OUR PROGRAMME. BUT THERE ARE OTHER COUNTRIES ` I GATHER, LIKE IRELAND ` THAT HAVE A LONG-TERM INFRASTRUCTURE STRATEGY THAT ALL THE PARTIES HAVE SIGNED UP FOR, AND IT MEANS THE INDUSTRY CAN PLAN. WE DON'T HAVE THAT AT THE MOMENT. NEARLY ALL MY TUNNELLING GUYS HAVE GONE. THEY'VE GONE ALREADY? GONE` YEAH. THEY HAVE TO. THEY WANT TO WORK. SOME HAVE FOUND JOBS IN ROADS AND THINGS, BUT THE ONES WHO WANT TO WORK ON TUNNELS ` THEY'VE ALL GONE. SO THE NEXT TUNNEL WE HAVE, WE DON'T HAVE THOSE PEOPLE? YEP. FROM SCRATCH. WE HAVE TO BRING THEM BACK IN FROM OVERSEAS? ALL FROM SCR` AND YOU HAVE TO BRING THEM BACK ON EXPATRIATE TERMS; THEY HAVE TO START UP FROM SCRATCH; YOU HAVE TO FIND THEM A HOUSE, RELOCATE THE KIDS. IT'S VERY EXPENSIVE BUILDING PROJECTS LIKE THIS, BUT WE HAVE NO OPTION UNTIL WE HAVE A LONGER-TERM PIPELINE. DO YOU HAVE ANY HOPE THAT WE CAN GET THAT POLITICAL CONSENSUS? COS THERE IS, IN THE INDUSTRY` YOU KNOW, WE'VE HAD INFRASTRUCTURE PIPELINE GROUPS SET UP, VERTICAL CONSTRUCTION GROUPS ` THERE'S THE WILL THERE WITHIN THE INDUSTRY FOR THIS TO HAPPEN; THE POLITICIANS TALK BIG ABOUT IT, BUT THEN THEY COME INTO A GOVERNMENT AND THEY CHANGE THEIR MIND, RIGHT? THAT'S... DO YOU NEED SOMETHING, SAY AN INDEPENDENT INFRASTRUCTURE COMMISSION, THAT IS FUNDED, GETS GIVEN THE MONEY BY THE TAXPAYER AND MAKES THOSE DECISIONS ON PROJECTS? TAKE IT OUT OF THE HANDS OF POLITICIANS. WELL, IF WE ARE TO TAKE THE COST OUT OF PROJECTS GOING FORWARD IN NEW ZEALAND, WE HAVE TO DO IT DIFFERENTLY TO HOW WE'RE DOING IT, AND THAT IS` THAT WILL ENABLE NEW ZEALAND TO BUILD MORE FOR THE PEOPLE OF NEW ZEALAND. NOW, THAT WILL REQUIRE AN APPROACH THAT WE DON'T HAVE AT THE MOMENT, AND THAT WILL REQUIRE A COMMITMENT AND A DISCIPLINE TO BUILDING IN A CERTAIN WAY, AND AN AGREED LIST OF PROJECTS. IT'S ALL DOABLE, BUT THEY... POLITICAL PARTIES WOULD THEN GIVE UP ABSOLUTE FREEDOM TO PURSUE THEIR AGENDA. AND THAT'S GOING TO BE THE RUB, IS... WHAT'S THE ISSUE OF GREATER GOOD HERE? DOES IT`? HOW DOES IT WORK OVERSEAS? YOU'RE GOING TO IRELAND; HAVE THEY BEEN ABLE TO BUILD THAT POLITICAL CONSENSUS? THEY'RE A SIMILAR SIZE TO US. THEY'RE MOVING FAST WHEN IT COMES TO INFRASTRUCTURE. WHAT DO THEY DO TO TAKE IT OUT OF THE HANDS OF POLITICIANS? WELL, I GATHER THAT MAJOR INFRASTRUCTURE HAS BEEN LARGELY DEPOLITICISED. THEY'VE GOT AN ELECTION COMING UP. I ACTUALLY READ THE HEADER PAGE OF THE IRISH TIMES MOST DAYS. THERE'S NO DEBATE ON WHETHER THE METROLINK PROJECT I'M GOING TO SHOULD HAPPEN OR NOT. THERE'S NO PARTICULAR PARTY LOOKING TO SCORE A POINT. THEY'RE JUST SAYING, 'JUST GET ON AND DO IT.' I'M TOLD THEY HAVE A LONG-TERM STRATEGY THAT ALL THE PARTIES HAVE SIGNED UP TO. SO WE... IT IS POSSIBLE? IT'S POSSIBLE TO GET POLITICIANS TO` FOR A COUNTRY THE SIZE OF OURS. AND PUBLIC-PRIVATE PARTNERSHIPS ARE TALKED ABOUT. THIS GOVERNMENT, OBVIOUSLY, IS LOOKING AT MANY DIFFERENT WAYS OF TRYING TO FUND PROJECTS TO TRY AND GET THEM TO GO AHEAD. DO YOU THINK PPPS ARE THE ANSWER? THEY'RE NOT THE ANSWER. THEY ARE AN ANSWER. UH, I'VE DONE A NUMBER OF PPPS AS A BUILDER AND AS A CLIENT. THEY ARE... JUST ANOTHER FORM OF DELIVERY THAT HAVE PARTICULAR ADVANTAGES AND SOME DISADVANTAGES. THEY ARE COSTLY ` THEY COST MORE THAN A TRADITIONAL DELIVERY PROJECT BECAUSE OF THE WAY THAT THEY ARE SET UP. BUT THEY ARE A VERY POWERFUL WAY OF GETTING CERTAIN THINGS TO HAPPEN, AND IF THEY'RE USED ON THE RIGHT PROJECT, THEY CAN BE ABSOLUTELY THE BEST WAY OF DOING IT. SO I THINK THE COUNTRY SHOULD BE LOOKING AT THEM, UH, BUT THEY'RE NOT THE ANSWER TO EVERY PROBLEM. BUT THEY WILL ENABLE US TO GET PROJECTS GOING QUICKER. WHAT WOULD YOU SAY TO THOSE CONCERNE THAT THE PUBLIC SECTOR TAKE ON THE RISK WHILE THE PRIVATE SECTOR GET ALL THE GAINS IN THOSE PROJECTS? AND THE SAME COULD BE SAID WHEN WE LOOK AT OTHER WAYS OF` OTHER OPTIONS FOR FUNDING PROJECTS. WELL, MY BACKGROUND IN AUSTRALIA ` PPPS HAD A VERY GOOD REPUTATION FOR, YOU COULD SAY, FIREWALLING THE RISK FROM THE PUBLIC PURSE, BUT IN THE LAST FIVE YEARS, THAT'S NO LONGER THE CASE. ALL THE MAJOR PPPS IN AUSTRALIA HAVE COME BACK TO THE GOVERNMENT ASKING FOR MORE MONEY. SO ACTUALLY NOW THEY ARE NO MORE COST-CERTAIN THAN WHAT I'D CALL A TRADITIONAL DELIVERY PROJECT. WHILE THE STATION LOOKS IMPRESSIVE, IS GOING TO LOOK IMPRESSIVE ONCE IT'S DONE, THERE HAS BEEN A LOT OF DISRUPTION FOR THOSE LIVING AND WORKING IN THE CBD. DID YOU HANDLE THAT RIGHT? WHAT LESSONS HAVE BEEN LEARNT FROM THAT? WELL, AGAIN, WHEN I STARTED THE JOB, THERE WAS $0 IN THE BUDGET TO HANDLE DISRUPTION. NOW, I THINK IT'S... IT'S BEEN A BIG ISSUE, CERTAINLY FOR THOSE PEOPLE AND THOSE FIRMS, AND SINCE THEN, THE SPONSORS HAVE COME UP WITH A HARDSHIP FUND, AND WE'VE ATTEMPTED TO MITIGATE THE IMPACTS OF IT. BUT IT IS A BIG ISSUE, AND ANY PROJECT GOING FORWARD... WOULD NEED TO CONSIDER IT. THE GENERAL VIEW WAS THAT PEOPLE COULD USE THE PUBLIC WORKS ACT IF THEY WERE` IF THEY FELT SO INCLINED. UM, THAT'S PRETTY HARD FOR AN AVERAGE MEMBER OF THE PUBLIC TO DO. SO I THINK FUTURE PROJECTS ARE GOING TO HAVE TO ACCEPT ` PARTICULARLY IF THEY'RE IN THE CBD ` THERE'S GOING TO BE DISRUPTION, AND THERE NEEDS TO BE A` SORT OF A REALISTIC WAY OF ADDRESSING THAT DISRUPTION. SO A FUND NEEDS TO BE SET UP ` LIKE EVENTUALLY HAPPENED ` TO COMPENSATE THOSE BUSINESSES? THAT WOULD BE MY VIEW. TO BUY THEM OUT, OR`? YOU THINK THAT'S`? I THINK THERE SHOULD BE A FUND. I THINK THERE SHOULD BE AN ACCEPTANCE OF THE LEVEL OF DISRUPTION. UM, NOT EVERY IMPACT ON THE BUSINESSES HAVE WE CAUSED. BECAUSE WE'RE THE ONLY ONES PAYING, WE TEND TO BE (CHUCKLES) THE ONE BLAMED FOR EVERYTHING. BUT THE CBD IN AUCKLAND IS CHANGING MASSIVELY. AND IT WAS MY VIEW THAT WHEN COMMERCIAL BAY OPENED, IT WAS GOING TO DRAW THE CBD DOWN TO THE WATERFRONT, AND THAT'S HAPPENING. THAT'S JUST CONTINUING TO HAPPEN. SO BUSINESSES AROUND HERE HAVE BEEN IMPACTED BY CRL, THEY'VE BEEN IMPACTED BY COVID, BUT THEY'RE ALSO BEING IMPACTED BY THE SHIFT IN THE CBD AS WELL. AND DIFFERENT SHOPPING PATTERNS ` WE'VE NOW GOT PEOPLE ONLY COMING INTO WORK TUESDAY, WEDNESDAY, THURSDAY. SO IF YOU'RE RUNNING A CAFE, IT'S JUST HARDER NOW. SO THERE'S A LOT OF THINGS HAPPENING. BUT, YEAH, GOING BACK TO YOUR QUESTION, I THINK ANY MAJOR PROJECT LIKE CRL WOULD NEED TO LOOK REALISTICALLY AT DISRUPTION INTO THE FUTURE. DO YOU ACCEPT SOME RESPONSIBILITY, THOUGH, FOR THAT PAIN THAT'S BEEN CAUSED? ABSOLUTELY. DO YOU APOLOGISE TO THOSE PEOPLE? YEAH, WE'VE APOLOGISED, BUT THAT DOESN'T REALLY HELP THEIR (CHUCKLES) MATERIAL PROBLEMS. WE'VE CAUSED IT. AND YOU ACCEPT THAT? YEAH. LOOKING OVER YOUR TIME HERE, THEN, AS YOU HEAD OFF, DO YOU HAVE A BIGGEST REGRET, SOMETHING YOU'VE LEARNED THAT YOU CAN LEARN FROM AND PERHAPS OTHERS CAN AS WELL? NO, THE BIGGEST THING I THINK WE'VE ALREADY COVERED ` IS I DO THINK THAT... LOOK, I'M AN ENGINEER, I'M A BUILDER, AND I BELIEVE THAT INFRASTRUCTURE IS A GOOD THING FOR THE COUNTRY. SO I'D LIKE NEW ZEALAND TO HAVE A REALLY BIG CONVERSATION ABOUT WHAT DO WE WANT TO BUILD IN THE NEXT 30 YEARS AND WHAT SORT OF COUNTRY DO WE WANT TO BE, COS INFRASTRUCTURE IS A WAY OF TAKING IT THERE. AND ALSO, YOU KNOW, WE'RE A LONG WAY AWAY FROM THE REST OF THE WORLD, AND WE HAVE TO BE REALLY EFFICIENT, AND INFRASTRUCTURE AS A WAY OF HELPING OUR PRODUCTIVE INDUSTRIES AND INFRASTRUCTURE IS A WAY OF HELPING OUR PRODUCTIVE INDUSTRIES BE MORE EFFICIENT. I DON'T THINK THERE'S ONE PROBLEM IN NEW ZEALAND THAT NEW ZEALANDERS CAN'T SOLVE. IF YOU WANT TO CONTACT Q+A TEAM, PLEASE KORERO MAI. THESE ARE OUR MAIN PLATFORMS. HIT US UP ON EMAIL, TWITTER OR FACEBOOK. AFTER THE BREAK ` IS NATIONAL ENJOYING BEING IN GOVERNMENT? WE'RE LIVE AT THEIR CONFERENCE. DESPITE BEING BACK LEADING A GOVERNMENT THIS YEAR, IT HAS BEEN A TOUGH ONE FOR THE NATIONAL PARTY. THEIR MINISTERS HAVE HAD TO PRESIDE OVER A RECESSION, AND THE PARTY'S POLLING HASN'T REALLY IMPROVED ON THE ELECTION RESULT AT ALL. SO HOW ARE THE MEMBERS FEELING? 1 NEWS SENIOR POLITICAL REPORTER BENEDICT COLLINS IS AT THEIR CONFERENCE THIS WEEKEND. KIA ORA, BENEDICT. WE HEARD FROM NICOLA WILLIS YESTERDAY, A SPEECH ABOUT FINANCE. OBVIOUSLY IT IS TO HAVE FINANCIAL TIMES. HOWEVER MEMBERS FEELING? I THINK THEY ARE QUITE HAPPY ACTUALLY. THERE IS NOTHING LIKE BEING EMPOWERED TO BRING A SMILE TO THE FACE OF THE LITTLE MEMBERS . NICOLA WAS WHAT A LOT OF ENTHUSIASM TO A SPEECH. HOW GOOD IS IT TO HAVE 49 NATIONAL MPS? HOW GOOD IS IT TO HAVE A NATIONAL PARTY BY MINISTER? THE CROWD WAS LIKELY UP, YOU HAVE TO REMEMBER THIS IS A NATIONAL PARTY CONFERENCE. THEY ARE STILL BEING WARMLY WELCOMED HER. THERE IS A HUGE AMOUNT OF ENTHUSIASM IN THE NATIONAL PARTY SUPPORTERS. NICOLA WILLIS ALSO TALKED ABOUT SOME OF THE GOVERNMENT'S MOVES AROUND COST-CUTTING AND BRINGING DOWN THE COST OF LIVING PRESSURES. MANY FEWER PEOPLE WEARING LAN YARDS, MORE PEOPLE IN HARD HATS AND HI VIZ. WHAT WE HAVE SEEN IS NATIONAL AFTER SIX YEARS IN OPPOSITION HAVE REALLY PULLED THEMSELVES UP BY THE BOOTSTRAPS. THE PARTY PRESIDENT, WHO WAS RE-ELECTED AT THE CONFERENCE, THEY WOULD LOVE TO HAVE 50,000 NATIONAL PARTY MEMBERS. AT ANY ORGANISATION LIKE THIS YOU WILL GET PEOPLE WHO DO A HUGE AMOUNT OF WORK, AND SOME PEOPLE WHO WANT TO GROW THAT. BEING IN GOVERNMENT, IT IS KIND OF TURNING THINGS AROUND FOR THE PARTY. IT IS NOT JUST GO TO HEAD UP A LITTLE BIT IN THE POLLS, BUT PUTTING UP BILLBOARDS, PUTTING UP PLACARDS, KNOCKING ON DOORS AND SPREADING THE WORD. AN INTERESTING THING I THOUGHT CAME UP YESTERDAY. COULD YOU GET US SOME FACTS AND FIGURES AROUND THE STATE OF THE ECONOMY? THAT MEANS WHEN WE ARE TALKING TO PEOPLE IN THE COMMUNITY ABOUT THE NATIONAL PARTY, WE COULD SEE WHERE THINGS ARE AT. LOYALIST THOUGHT THAT WAS A GOOD IDEA AND WOULD GET IT GOING NICE AND QUICKLY. IT SEEMS LIKE THE MEMBERSHIP FEELS CHRISTOPHER LUXTON IS STILL POPULAR WITHIN THE PARTY. IS THERE A DISCONNECT BETWEEN HOW THE MEMBERSHIP AND THE PARTY I FEELING, AND HOW THEY ARE POLLING IN THE PUBLIC? THE NATIONAL PARTY IS POLLING QUITE STEADILY. GENERALLY SPEAKING THEY ARE MAINTAINING THAT STEADY TRACK. CHRISTOPHER LUXTON HAD A LITTLE BIT OF A BUMP IN THE PREFERRED P.M. POLL. BACK IN JUNE, CHRISTOPHER LUX AND HAD A -5. HE WAS DOING BETTER THAN CHRIS HIPKINS, WHO WAS ON 13. IT HAS NOT TRANSFERRED INTO MUCH POPULARITY IN THE PUBLIC, BUT THEY ARE IN POWER. I DO NOT THINK THAT'LL BE WORRYING THEM AT A MOMENTS. OBVIOUSLY THEY WENT BACK TO THEIR BREAD-AND-BUTTER TODAY ON LAW AND ORDER. WE HAVE A COUPLE OF SESSIONS THIS MORNING, ONE ON EDUCATION AND ONE ON LAW AND ORDER. WE WILL HAVE THE POLICE MINISTER AND THE JUSTICE MINISTER, PAUL GOLDSMITH, TALKING ON THOSE TODAY. THEY HAVE A BUSINESS IS ATTACKED AND BURNT OUT IN AUCKLAND. THIS IS NOT AN ISSUE THAT THEY CAN JUST MOVE ON FROM. THE PM WILL ALSO BE MAKING A POLICY ANNOUNCEMENT TODAY. THANK YOU VERY MUCH FOR YOUR TIME BENEDICT. I AM SURE WE WILL SEE THAT ON SIX NEWS TONIGHT. SO YOU KNOW, AS WELL AS WATCHING OUR SHOW ON TVNZ PLUS, WHERE YOU CAN FIND ALL OF Q+A'S WORK PLUS THE BEST OF TVNZ'S NEWSROOM. AFTER THE BREAK, WHY AN EXPERT FEARS AUKUS COULD MEAN BEING DRAGGED INTO WORLD WAR THREE. IN OR OUT OF AUKUS? FOREIGN MINISTER WINSTON PETERS MADE IT CLEAR IN AN INTERVIEW WITH 1 NEWS THIS WEEK THAT NO DECISIONS HAD BEEN MADE ON WHETHER NEW ZEALAND WOULD JOIN AUKUS PILLAR TWO IF INVITED BY THE US, THE UK AND AUSTRALIA. SO WHY WOULDN'T WE? WE'RE JOINED THIS MORNING BY EMERITUS PROFESSOR OF STRATEGIC STUDIES AT THE AUSTRALIAN NATIONAL UNIVERSITY HUGH WHITE. GOOD MORNING. QUICK DISCLOSURE ` YOU'RE IN NEW ZEALAND ON THE INVITATION OF FORMER PM HELEN CLARK AND FORMER LEADER OF THE OPPOSITION DON BRASH. TO DISCUSS THESE ISSUES, LET'S JUST RECAPTURE PEOPLE AT. AUKUS PILLAR ONE WAS AROUND NUCLEAR SUBMARINES. POLLUTED TO WE MIGHT BE INVITED TO JOIN AT SOME POINT. WINSTON PETERS SAID DEFINITIVELY IT IS NOT A MILITARY AGREEMENT. WHAT DO YOU SAY TO THAT? FOR AUSTRALIA IT IS A PLAN TO BUY NEW SUBMARINES. THERE ARE A LOT OF CRITICISMS TO MAKE ABOUT IT IN THAT REGARD. BUT IT IS ALSO.THE SPELLER TO COMPONENTS, WHICH IS TECHNOLOGY SHARING AND DEVELOPMENT. AND THAT IS DEFINITELY MILITARY, IT IS ABOUT BUILDING COLLABORATIVE CAPABILITIES CONTRIBUTING TO DETERRENCE IN THE ASIA-PACIFIC REGION. IT IS IMPORTANT TO SEE IT IN THOSE TERMS. IT IS ALSO WORTH REMEMBERING THAT AUKUS IS SOMETHING MUCH BIGGER. IT IS AN ATTEMPT TO CONSOLIDATE, TO SYMBOLISE IF YOU LIKE, COUNTRIES SUPPORT FOR THE USA. IT IS NOT JUST ABOUT COLLABORATING ON NEW ADVANCED TECHNOLOGIES, IT IS ABOUT EXPRESSING AUSTRALIA'S COMMITMENT TO WASHINGTONS MISSION. IT IS ABOUT OUR RELATIONSHIP OF CHINA AND WHAT THAT MEANS FOR THE WHOLE REGIONAL ORDER. I HAVE SOME DEEP RESERVATIONS ABOUT IT, PARTLY BECAUSE IT IS ABOUT WHERE TO BUY SUBMARINES FOR AUSTRALIA. I DO NOT THINK THE TECHNOLOGY SHARING STUFF WILL MAKE MUCH DIFFERENCE MILITARILY. MOST IMPORTANTLY, I THINK THAT APPROACH TO AMERICA'S ROLE IN ASIA AND OUR RELATIONSHIP WITH CHINA BEING REINFORCED BY THIS IS NOT A SMART WAY TO GO. THAT IS THE QUESTION. DO YOU BELIEVE THE GOVERNMENT LOCKS AUSTRALIA INTO FACING THE USA AGAINST CHINA AND NEW ZEALAND? THAT IS THE KEY QUESTION HERE, WHAT PEOPLE ARE WORRIED ABOUT. ONE POINT TO MAKE HERE IS THAT WINSTON PETERS IS RIGHT TO SAY THAT AUKUS IS NOT AN ALLIANCE. IT IS A BIG ACQUISITION PROJECT ON ONE LEVEL. BUT THAT DOES NOT MEAN IT DOES NOT CARRY BIG STRATEGIC SIGNIFICANCE WITH IT. MY RESERVATION ABOUT IT AND THAT THIRD REGARD, THE WIDER STRATEGIC SIGNIFICANCE, IS NOT JUST THAT IT LOCKS AUSTRALIA INTO SUPPORTING THE UNITED STATES IN AN ACTUAL CONFLICT, ALTHOUGH I THINK IT ACTUALLY DOES IN OUR CASE BECAUSE OF THE SUBMARINE ASPECT. BUT BECAUSE IT CONSTITUTES AN EXPRESSION OF SUPPORT TO THE REGION, TO AUSTRALIANS, AND FOR THAT MATTER TO AMERICANS, IT IS A WAY FOR AUSTRALIA TO SAY YES WE THINK WHAT WASHINGTON IS DOING, THEIR APPROACH TO THE CHINA PROBLEM, IS CORRECT AND WONDER THAT WE WILL FOLLOW. AT THE HEART OF THAT IS THE CORE OF AMERICA'S APPROACH TO THE CHALLENGE CHINA POSES AND TO PRESERVE AMERICA'S LEADERSHIP AS THE STRATEGIC APPROACH TOWARDS CHINA. IT IS A THREAT POTENTIALLY GOING TO WAR AGAINST CHINA IF THEY PUSH TOO HARD. IT IS NOT THAT I WOULD NOT PREFER THE UNITED STATES TO REMAIN THE LEADING POWER IN THE REGION IF THAT SHOULD HAPPEN. I AM PRETTY PRO-AMERICAN WHEN IT COMES TO THAT. BUT I THINK THE AMERICANS ARE GETTING IT WRONG ON THIS QUESTION. CHINA READS THAT AS YOU ARE BODYING UP TO AMERICA, IS IT IS BLACK AND WHITE IS THAT? I DO NOT THINK SO. IF I THOUGHT THE APPROACH TO THE CHINA PROGRAM THAT AUKUS SYMBOLISES WAS THE RIGHT ONE, I WOULD JOIN. WE SHOULD BE RUNNING A FOREIGN DEFENCE POLICIES TO PROMOTE THE REGIONAL OUTCOME IN ASIA WHICH WORKS BEST FOR US. IF I THOUGHT THAT THE PLAN, AND THE APPROACH TO CHINA WAS THE RIGHT ONE I WOULD SAY SURE. BUT I DO NOT THINK IT IS GOING TO WORK AND I THINK IT IS QUITE DANGEROUS. ONE WAY IN WHICH IT IS DANGEROUS IS THAT DETERRENCE, IS PEOPLE IN WASHINGTON AND CANBERRA KEEP SAYING, IS THAT IT IS LET ME TO GO TO WAR. AT THE MOMENT THE BLUFF IS GETTING CALLED. AMERICA TALKS A LOT ABOUT DETERRENCE, BUT IS NOT DOING ENOUGH, EVEN WITH AUKUS, IN CONCRETE TERMS TO CONVINCE CHINA THAT IT IS BEING SERIOUS. IT IS BEING PROVOCATIVE WITHOUT DETERRENCE AND THAT IS DANGEROUS. HOW WOULD YOU DESCRIBE NEW ZEALAND AND AUSTRALIA SELECTION SHIP WITH THE SINGLE POWERS? HOW DO WE GET THAT RIGHT? THIS IS THE GREAT QUESTION OF OUR TIME. WITHOUT BEING ELIGIBLE ATTIC ABOUT IT, WE ARE FACING ONE OF THE GREAT STRUGGLES IN OUR HISTORY. WE HAVE SIGNIFICANT DIFFERENCES.. I LIKE COMING TO NEW ZEALAND BECAUSE I LIKE TO SEE HOW THEY DIFFER FROM AUSTRALIA. BUT FROM BOTH OF US, WE ARE BOTH PRODUCTS OF THE SOCIETIES THAT WE ARE BUILT ON. WE ARE A BIG ISLAND, YOU ARE TO IRELAND. IT IS A PRODUCT OF AN ERROR OF HISTORY WERE FIRST WRITTEN AND THEN AMERICA WHERE THE WORLD'S LEADING ECONOMIC AND MARITIME POWERS. AND AUSTRALIA'S CASE IT IS NEARLY 240 YEARS SINCE EUROPEAN SETTLEMENT. THAT ANGLO-SAXON DOMINANCE OF THE PACIFIC IS THE ERA THAT IS NOW COMING TO AN END. WE ARE FACING ONE OF THE BIGGEST TRANSFORMATIONS IN OUR SHARED INTERNATIONAL SETTING SINCE EUROPEAN SETTLEMENT. WHEN WE ASK HOW DO WE BALANCE THAT RELATIONSHIP WITH THE UNITED STATES AND WITH CHINA, THIS IS NOT JUST ANOTHER DAY AT THE OFFICE. THIS IS A REALLY BIG TRANSFORMATION. ON THE ONE SIDE, WE DO HAVE ECONOMIC RELATIONS OF CHINA WHICH ARE EXTREMELY IMPORTANT TO OUR FUTURE. BUT I ALSO THINK IT IS TRUE THAT ECONOMICS DOES NOT HELP YOU IF YOU DO NOT GET SECURITY RATE. MR PETERS HAS SAID THAT. WHAT KIND OF FUTURE RELATIONSHIP EITHER USA AND CHINA GOING TO HAVE BETWEEN THEMSELVES? IF THEY CAN FIND A WAY TO GET ON THEN THAT IS A GREAT POSITION FROM AUSTRALIA'S POINT OF VIEW. FROM THE 1980S, WE HAVE RELIED ON AMERICA TO KEEP US SAFE AND CHINA TO MAKE US RICH. BUT IF THE USA AND CHINA CANNOT GET ALONG, THEN WE WILL NOT HAVE THE SECURITY WE NEED IN ASIA AND WE WILL NOT HAVE THE SECURITY FRAMEWORK IN WHICH TO HAVE THAT. OF COURSE ECONOMICS IS IMPORTANT, BUT WE SHOULD NOT SEE IT AS A QUESTION OF EITHER WE ARE PROSPEROUS OF CHINA OR SECURE WITH THE UNITED STATES.. WE WILL ONLY FIND A WAY TO PROSPER AND BE SAFE IF AMERICA AND CHINA CAN GET ON. I DO NOT SEE HOW, IN AN ERROR WHERE CHINA IS AS BIG OF AN ECONOMY AS AMERICA, AND WHERE CHINA IS INCREASINGLY POTENT IS AS A NUCLEAR ARMED POWER, IT IS HARD TO SEE A SITUATION WHERE THE UNITED STATES DOES NOT AT LEAST SEE CHINA AS AN EQUAL PARTNER. NOBODY REALLY KNOWS WHAT AMERICA'S AIM IN ASIA IS. BUT ONE THING IS SURE, NO ONE IN WASHINGTON THINKS THAT THEY SHOULD TREAT CHINA AS AN EQUAL PARTNER. A BASIC POINT IS THAT IF THEY DO NOT TREAT CHINA IS AN EQUAL PARTNER, THEN THEY ARE TAKING ON A RIVALRY WITH CHINA I DO NOT THINK THEY CAN WIN.. IF AMERICA DEFINES THEIR RACIAL SHIP WITH CHINA IN THAT WAY, NEW ZEALAND AND IS REALLY A WILL NOT HAVE THAT KIND OF ENVIRONMENT WHERE WE CAN MAKE THAT CHOICE. WINSTON PETERS SUGGEST THAT THERE ARE ECONOMIC BENEFITS TO NZ JOINING PILLAR TWO. DO YOU AGREE? I AM SCEPTICAL OF PILLAR TWO BEING AN ACTUAL TECHNOLOGY SHARING PROJECT. AI AND QUANTUM ARE TWO OF THE TECHNOLOGIES IN THE FRAME THEM. I CANNOT SPEAK FOR NEW ZEALAND, BUT I DO NOT THINK AUSTRALIA WILL BE REALLY A INNOVATIVE POWER IN THE REALM OF AI. WHEN YOU LISTEN TO WHAT AUSTRALIAN OFFICIALS ARE SAYING ABOUT WHAT IS INVOLVED, IT IS VERY LOW-KEY AND SMALL-SCALE. THERE MAY BE A CHANGE IN CAPACITIES OF HOW THESE TECHNOLOGIES ARE DEVELOPED IN THE DECADES TO COME. BUT IF THERE ARE WE WILL BE BUYING THAT STUFF. WE NEED TO BE REALISTIC ABOUT HOW BIG A ROLE WE ARE GOING TO PLAY, NEW ZEALAND AND AUSTRALIA. WE ARE NOT KEY TECHNOLOGY LEADERS IN THESE AREAS. LOOK OF THE WAY AUSTRALIAN OFFICIALS TALK ABOUT IT. PILLAR TWO IS A LOT ABOUT NOT JUST RESEARCH ON THOSE TECHNOLOGIES, BUT ALSO THE INTEGRATION OF AUSTRALIA'S DEFENCE INDUSTRY WITH AMERICA'S. I AM VERY DOUBTFUL THAT IS GOOD FOR AUSTRALIA. I THINK IT IS IMPORTANT FOR AUSTRALIA TO BUY THINGS ALL SORTS OF DIFFERENT COUNTRIES, NOT JUST AMERICA. BUT WHEN YOU HAVE A SYSTEM AS BIG AS AMERICA'S, YOU'RE A BIT LIKELY TO GET SQUASHED IN THE PROCESS. I DO NOT THINK IT WILL BE GOOD FOR THE AUSTRALIAN DEFENCE SYSTEM TO BE DRAWN INTO THE AMERICAN ONE LIKE THAT. I AM SCEPTICAL OF THE ECONOMIC BENEFITS LIKE THAT. BUT I DO NOT THINK WE CAN BUY THOSE BENEFITS AT THE PRICE OF COMMITTING YOURSELF TO SUPPORT AN APPROACH WITH SUCH A FUNDAMENTAL QUESTION ABOUT SHAPING THE FUTURE OF OUR REGION AND THE GLOBAL ORDER. THAT WOULD BE A VERY HIGH PRICE TO PAY FOR A VERY DOUBTFUL BENEFIT. I APPRECIATE YOU JOINING US TODAY AND HOPE YOU ENJOY YOUR TIME IN NEW ZEALAND. THAT'S AUSTRALIAN NATIONAL UNIVERSITY EMERITUS PROFESSOR HUGH WHITE. AND FOR MORE ON AUKUS, POLITICAL EDITOR MAIKI SHERMAN SPOKE KUA MUTU, THAT'S Q+A FOR THIS WEEK. FROM THE Q+A TEAM, THANKS FOR WATCHING AND NGA MIHI KI A KOUTOU I NGA KARERE. HEI TERA WIKI. JACK TAME WILL BE BACK NEXT SUNDAY AT 9AM.