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Govt warns KiwiRail annual support won't last

Govt warns KiwiRail that hundreds of millions in annual support can’t last

By Pattrick Smellie

May 21 (BusinessDesk) - State-owned rail operator KiwiRail takes the lion’ share of $249 million additional transport funding over the next four years, with an extra $209.8 million available for the year ahead and $190 million in the 2016/17 fiscal year.

But the extra funds come with a warning.

“KiwiRail must continue to drive significant efficiency and productivity improvements to reduce an ongoing level of Crown funding required,” said Transport Minister Simon Bridges said in a statement.

Finance Minister Bill English says in his budget speech that ongoing support at recent levels for KiwiRail is “unsustainable”, with funding coming from the Future Investment Fund created by the partial sale of government electricity companies and a reduced holding in Air New Zealand.

“KiwiRail is integral to New Zealand’s land transport system,” said Bridges. “This funding will allow it to deliver services and maintain the national network to a safe and reliable standard.”

Once next year’s allocation is spent, total capital injections to KiwiRail since the 2010 Budget will have totalled $1.43 billion.

Meanwhile, free travel for pensioners under the SuperGold Card will expand, with funding rising by $10.2 million in 2015/16 to total $28.1 million.

Briefing journalists, English said the government had hoped before now not to be giving such high levels of support to KiwiRail.


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