He calculates the government ‘s overall approach to fiscal responsibility and other funding requirements means it is likely to put in around 2% of GDP, leaving around 3% for the private sector.
“Greenlight for Growth”, a report mainly authored by Randall, says lifting New Zealand’s 10-year real growth rate by even 0.5%, from its current level of around 3.5% a year, would add around $6 billion to GDP in the first year alone, compounding over time.
Jim McLay, Macquarie New Zealand’s executive chairman, says further changes are required to the Resource Management Act (RMA) and Land Transport Management Act to ensure private sector involvement in New Zealand projects.
But he predicts fierce competition among the private investment community for a slice of the action. McLay says the company’s Australian-based parent, Macquarie Bank, as one of the world’s largest private investors in infrastructure, is extremely interested.
“And I know for certain others are too,” he says. “We will have to compete is a fiercely competitive environment.”
Macquarie already has interests in NZ’s electricity sector, for one, through Contact, TrustPower and Powerco.
Internationally its infrastructure portfolio extends to roads, communications, airports and energy assets.
However, to create the conditions necessary to support private sector investment in NZ, the report says the government will have to put in place several things. They include undertaking seed projects to develop the capital market and preparing concession arrangements and certainty that there would be a regular flow of projects to enable industry to allocate skills and resources in a long-term basis, would also be required.
The report suggests too that there would also be a need to use a measurement system, such as a Public Sector Comparator, to ensure projects represented real value for money.
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