Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


Future Investment Fund for modern infrastructure

Hon Bill English

Minister of Finance

24 May 2012

Future Investment Fund for modern infrastructure

Schools, health, science and innovation, and transport all benefit in Budget 2012 from the Future Investment Fund set up to invest proceeds from the sale of minority shareholdings in four SOEs and Air New Zealand, Finance Minister Bill English says.

"The Government is committed to investing in modern infrastructure that helps build a faster-growing economy with more exports and more real jobs, without borrowing more from overseas lenders,” Mr English says.

“That’s precisely what the partial sale of shares is all about. The Treasury is forecasting sale proceeds of $5 billion to $7 billion over the next three to five years.

“That money will go into the Future Investment Fund and be used to pay for better public assets such as modern schools, hospitals, and transport infrastructure, while reducing the Government’s borrowing by $5 billion to $7 billion.”

Budget 2012 allocates an initial $558.8 million, including:

· The first $33.8 million of $1 billion ring-fenced for modernising and transforming New Zealand schools as part of the Government’s 21st Century Schools programme. More of this money will be allocated in future Budgets, after a review of school property management.

· A further $250 million towards the KiwiRail Turnaround Plan.

· $88.1 million for the health sector, most of which will go towards hospital redevelopments.

· $76.1 million for the creation of the new Advanced Technology Institute.

The fund is notional, like the Canterbury Earthquake Recovery Fund. Spending and receipts will be smoothed over the fund’s lifetime.

“Investing the share sale proceeds in this way will result in valuable assets that are owned by the Crown, as part of a growing asset pool, on behalf of all New Zealanders,” Mr English says.

“The SOE share sale programme is a win-win. New Zealand savers get to invest in large Kiwi companies, and the Government frees up $5 billion to $7 billion to buy new assets without extra borrowing.

“Being listed on the stock exchange will provide greater transparency and discipline for the companies.”

The Government has confirmed Mighty River Power will be the first energy SOE to be partially floated – likely to be in the third quarter of this year, subject to market conditions.

The other companies in the share offer programme are Genesis, Meridian, Solid Energy, and Air New Zealand.

“The Government expects 85 to 90 per cent New Zealand ownership after the partial share floats, including the Government’s commitment to retain a controlling stake of at least 51 per cent in each company,” Mr English says.

“Details of the structure of the Mighty River Power initial public offer and share allocation will be announced after legislation is passed later this year.”

The $558.8 million allocated from the fund in Budget 2012 builds on $4.3 billion of new infrastructure spending over the past three Budgets for projects such as schools and ultra-fast broadband, and billions of dollars more to pay for the Government’s share of rebuilding Christchurch.

In addition to Budget initiatives, the Government is investing about $12 billion over the next 10 years to improve the State highway network and $4.6 billion through Transpower over the next 10 years to upgrade the national grid.

“Well-targeted investment in infrastructure helps lift productivity which, over time, will mean better wages and higher living standards for New Zealand families,” Mr English says. “The Government’s large investment is also directly supporting thousands of jobs – and indirectly supporting many thousands more.”

Pre-Prospectus Disclaimer
The Crown is considering offering shares to the public in one or more of Genesis Power Limited, Meridian Energy Limited, Mighty River Power Limited, Solid Energy New Zealand Limited and Air New Zealand Limited. No money is currently being sought and no applications for shares will be accepted or money received until after an investment statement containing information about the relevant offer of shares is available.


ends


© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Greens: Oil Drilling Face-Off With Labour

The plan is the second component of the Party’s environmental priority this election: Rivers clean enough to swim in again, and beaches safe from oil spills.

The Green Party loves New Zealand and will create a cleaner environment where our beaches remain open for swimming, not closed for oil spills.

The key policy points in the Green Party’s plan to protect our beaches from oil spills are to:
1. Prohibit deep sea oil drilling;
2. Implement compulsory shipping lanes for coastal shipping;
3. Build Maritime New Zealand’s oil spill response capability; and
4. Introduce a stronger legal framework so that when accidents do happen, the New Zealand taxpayer does not have to pay for the clean-up. More>>

 

Parliament Today:

Minister Told Of FBI Investigation, Says INZ: Coleman Must Quit Or Be Sacked Over Dotcom Case - Harré

Immigration New Zealand has done the right thing in distancing itself from Jonathan Coleman’s claims that ministers were not aware of FBI involvement in Kim Dotcom’s residency application, says the Internet Party. More>>

ALSO:

Valedictory Season: Maori Party Founders Say Goodbye

Two major Maori MPs gave there farewell speeches to Parliament Thursday outlining their history, experiences, triumphs and regrets. More>>

ALSO:

Resignation Not Accepted: Transport Minister Breaches Aviation Security Rules

"Running late for a plane at Christchurch Airport, I without thought breached airport and airline security rules by entering the gate lounge through a door usually used for exit only..." More>>

ALSO:

TAIC Report: Urgent Recommendations After Melling Rail Accident

The Transport Accident Investigation Commission has made four urgent recommendations to KiwiRail following the accident two months ago (27 May) when a Matangi passenger train collided with a stop block at Melling Station, Lower Hutt. More>>

ALSO:

Red Tape: Local Regulations Go Under Microscope

The Government says it is accepting nearly all of the recommendations the Productivity Commission has made on ways to improve local regulations. More>>

ALSO:

Spending Questions: Claudette Hauiti To Step Aside At Election

National Party President Peter Goodfellow confirms that he has received notification from List MP Claudette Hauiti that she plans to step aside at the 20 September election. More>>

ALSO:

EPA: Board Of Inquiry Rejects Basin Flyover By Majority Of 3 To 1

The independent Board of Inquiry delegated to decide on the Basin Bridge Proposal has, by a majority decision (3 to 1), cancelled the Transport Agency’s Notice of Requirement and declined its resource consent applications for the construction, operation and maintenance of a flyover on State Highway 1 in Wellington City... More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news