Staying ahead of the game

Will the brave new world of bipartisanship that seems to be on offer with an Infrastructure Commission come to fruition?

- Danyl McLauchlan

Game theory is the branch of economics that deals with trust and decision-making in an uncertain environment. When students first encounter it, they often feel as if the clouds have parted, and they understand all of the dysfunction of modern politics in an instant.

It does explain a lot. Consider infrastructure. The dire state of the nation's transport, energy, water, waste and environmental systems are well known - the cost, the inefficiency, the deterioration of basically everything.

One of the loudest complaints from the sector is about the political uncertainty around large builds. Because the two major parties cancel each other's grand projects nearly every time the government changes, it's almost impossible for the companies delivering these things to anticipate their workstreams and scale up their talent and capital to meet them.

A report commissioned by Infrastructure NZ estimated that more certainty could deliver an additional $2.3-4.7 billion in productivity benefits a year. Over a 30-year period, this could close a significant proportion (if not all) of our current infrastructure deficit.

Infrastructure Minister Chris Bishop is aware of this. In a recent speech to the sector, he lamented, "If I had a dollar for every time someone said, 'What we need is a long-term infrastructure plan for the country that can transcend political cycles', I'd be a very wealthy man."