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Govt infrastructure investment picks up speed

Hon Bill English
Minister for Infrastructure
19 May 2011

Govt infrastructure investment picks up speed

New Zealand's broadband, rail and schools are top priorities for about $1.6 billion of further infrastructure spending in Budget 2011, Infrastructure Minister Bill English says.

The spending, which includes over $500 million of reprioritised capital, follows about $3 billion of new spending in infrastructure and other major capital investment in Budgets 2009 and 2010.

In addition to Budget initiatives, the Government is investing about $12.2 billion over the next 10 years in New Zealand's State Highway network and $3.8 billion through Transpower until mid 2015 to upgrade the national grid.

“Tackling bottlenecks in our broadband, transport and electricity networks is a Government priority, as is providing high-quality modern schools and other social infrastructure,” Mr English says.

“Well targeted investment in infrastructure helps lift productivity, which over time will mean better wages and higher living standards for New Zealand families.

“That is why we are continuing with our large infrastructure investment around the country, despite the high costs the Government faces to help rebuild Christchurch.

“The Government's large investment is also directly supporting thousands of jobs – and indirectly supporting many thousands more - at a time of otherwise weak demand in the construction industry.”

Capital spending outlined in Budget 2011 includes:

Broadband - $942 million to complete the Government’s funding for ultra-fast broadband and $28 million more to connect fibre to schools.

Rail - $250 million more for KiwiRail for its 10-year Turn Around Plan, as well as $88 million for Wellington's Metro Rail.

Education - $109 million for:

    o Leaky building remediation work around New Zealand.
    o Advancing a public-private partnership at two new schools at Hobsonville, Auckland.
    o An early learning information system to improve information about participation in early childhood education.
    o Development of a moderation tool for teachers for National Standards and to continue the School Network Upgrade Programme.

The reprioritised capital spending in Budget 2011 includes changes to the Student Loan Scheme and an unused contingency for Wiri Prison.

“We've outlined our intention to pursue a mixed ownership model for four state-owned energy companies and to reduce the Crown’s shareholding in Air New Zealand.

“Officials have estimated this could raise between $5 billion and $7 billion, which would reduce the need for new borrowing for core social infrastructure assets.

“State sector agencies will also be required to deliver better value from existing assets. For example, agencies are being asked to consider speeding up the sale of surplus assets like closed schools and surplus Defence Force property.

“The Government at the end of the last financial year owned over $220 billion of assets and is expecting to accumulate $34.3 billion of net new assets over the next four years. We need to make sure we are doing that in a way that provides value for money for taxpayers and does not increase Government borrowing.

“The Government is also committed to improving the way it procures, designs, builds and maintains infrastructure on behalf of taxpayers

“We are pursuing innovative procurement methods, such as public-private partnerships, and developing more rigorous public sector asset management so future capital spending is of a high quality and goes where it is needed most,” Mr English says.


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