Infrastructure spending to get boost of billions in May Budget


$812 million will go towards repairing State Highway 1 around Kaikoura.

Finance Minister Steven Joyce will lift infrastructure spending by $4 billion more in the May Budget than previously indicated and an extra $7b in the following three Budgets. Of the $4b extra in next month’s Budget $812 million will go towards repairing State Highway 1 north and south of Kaikoura, which was damaged in the November earthquake.

Details of how the rest will be spent will have to wait until May 25, Joyce said in a formal pre-Budget speech to the Wellington Chamber of Commerce today. However, he announced a new debt target for the Government, to reduce net debt to between 10 per cent and 15 per cent of gross domestic product (GDP) by 2025. The current target is to reduce net debt to about 20 per cent of GDP by 2020; it is expected to settle at 24.3 per cent by the end of June.

On the issues of tax cuts, Joyce said the Government remained committed to reducing the tax burden “and in particular the impact of marginal tax rates on lower and middle income earners, when we have the room to do so.” Joyce also hinted at greater use of public-private partnerships (PPPs). Joyce said that the boost to capital expenditure would represent the biggest addition to the Government’s capital spending in decades.

“To put that into context, the net new capital allocated in the last four Budgets was $4.8 billion, of which $4.1 billion was funded through the proceeds of the mixed ownership model programme.” In between Budget 2016, the Government was forecasting just $3.6b in new capital spending between Budget 2017 and Budget 2020, which would now be $11b in new capital spending.

“If you add the Government’s budgeted new capital investment together with the investment made through baselines and through the National Land Transport Fund, the total is around $23 billion over the next four years, or an average of nearly $6 billion per year.” And we want to extend that further, with greater use of public-private partnerships, and joint ventures between central and local government and private investors.”

Joyce said New Zealand’s stronger economic performance flowed through to the Government books. For the first eight months of the current financial year, tax revenue was nearly 4 per cent ahead of predictions in Budget 2016. “Our surplus in the eight months to February was $1.4 billion. That’s more than $900 million more than was predicted in the [December] half-year update. “A growing and more resilient economy allows us to meet some of the pressing needs that the Government is faced with from time to time.”

But he said one of the biggest risks to the New Zealand economy were the “more insular” economic policies being pushed overseas and by the government’s political opponents domestically. “Many politicians, even those in New Zealand, want to be more protective on trade, slash immigration, reduce foreign investment, institute radical new environmental regulation, centralise wage bargaining, blow up our R&D [research and development] incentive system or stop much needed roading being built, and increase taxes. “That’s the opposite of a recipe for growth. That’s a recipe for stalling growth.”


  • Audrey Young
  • NZ Herald
  • Photo: Mark Mitchell

$50 million extra for recovery

SCCZEN_A_160513CSTGSREBUILDING_620x310An additional $50 million in funding has been allocated for the Canterbury Earthquake recovery in the Budget 2014…

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Budget boost for Auckland roads

Auckland motorways have been paved with gold in the Budget, while not an extra cent has gone to public transport.

Transport Minister Gerry Brownlee has announced a $375 million interest-free loan to the New Zealand Transport Authority to accelerate $815 million of motorway projects.

SCCZEN_A_20122013NZHNSMOTORWAY2_620x310The motorway projects in the Budget include an immediate start on three Northern Motorway improvements, five projects on the Southern Motorway around Takanini and scoping the east-west link through the industrial southeast.

Mr Brownlee said the projects would address congestion the country’s largest city, improve access to Auckland International Airport and capitalise on the benefits of major roading projects already under way – including the Western Ring Route.

“No Government has invested so heavily in transport infrastructure across all transport modes,” he said.

“But with freight demand forecast to grow by around 50 per cent across the country in the next 30 years, and by almost 80 per cent in Auckland, and with a growing population, we’ve decided to bring a number of important projects forward.

“Some of these projects were up to a decade from starting, but we’ve decided they simply must begin sooner to give Auckland the best opportunity of moving people and goods around the region.”

The $375 million will be transferred to NZTA as an interest-free loan, to be repaid to the Crown by funding currently allocated to these projects in the National Land Transport Fund up to 2026/27, Mr Brownlee said.

Auckland transport package:

* Delivery of projects on the Northern Corridor, Southern Corridor and State Highway 20A by 2019/20 ($800 million).
* Further investigations to determine the preferred scope of the East-West Link over 2014/15 ($10 million).
* Progression of the Panmure to Pakuranga phase of the Auckland Manukau Eastern Transport Initiative (AMETI) over 2014/15 ($5 million).

Northern corridor motorway projects proposed for acceleration:

* Three-laning State Highway 1 northbound Constellation to Greville
* State Highway 1/Greville Road Interchange improvements
* State Highway 1 to State Highway 18 motorway-to-motorway link
* Benefit-to-cost ratio: 3.8
* Proposed construction period: 2013/14 -2019/20
* Expected cost: $450 million

Southern corridor motorway projects proposed for acceleration:

* Three-laning State Highway 1 southbound Hill Road to Takanini
* Six-laning State Highway 1 Takanini to Papakura
* Takanini northbound onramp improvements
* Takanini Interchange upgrade
* Four-laning State Highway 1 southbound, State Highway 20 to Hill Road
* Benefit-to-cost ratio: 6.8
* Proposed construction period: 2014/15 – 2016/17
* Expected cost: $210 million

State Highway 20A project:

* Upgrades State Highway 20A to a motorway standard
* Benefit-to-cost ratio: 1.7
* Proposed construction period: 2015/16 – 2017/18
* Expected cost: $140 million


  • NZ Herald
  • Photo: Natalie Slade
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