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

Patience: Drive Safe

Be patient before passing is the AA's message for drivers this Labour weekend.

"People taking crazy risks to get past other vehicles is one of the most dangerous things on the road,” says AA spokesperson Dylan Thomsen.

“The weather is looking good for the long weekend so the roads will be busy. Unfortunately, that also increases the chances of people getting frustrated and trying a risky passing manoeuvre. When they get past, there will probably be more traffic up ahead anyway so it won’t get people there faster.” More>>

 
 

Parliament Today:

Employment Relations Bill: Govt Strains To Get Tea Break Law Through

The Government has been left with egg on its face - failing to get its much-vaunted, but hugely unpopular, meal break law passed in the first week of its new term, Labour spokesperson on Labour Issues Andrew Little says. More>>

ALSO:

Guns: Police Association Call To Arm Police Full Time

"The new minister gave his view, that Police do not need to be armed, while standing on the forecourt of parliament. The dark irony was that the interview followed immediately after breaking news of a gunman running amok in the Canadian parliament in Ottawa..." More>>

ALSO:

Gordon Campbell: On The Tokenism Of New Zealand's Role Against Islamic State

Our contribution against IS will be to send SAS forces to train the Iraqis? That’s like offering trainers to General Custer just as the 7th cavalry reached the Little Big Horn. More>>

ALSO:

Scoop Business: Shell And Todd Caught Drilling Without Approval

Multi-national oil company Shell’s New Zealand arm and local energy giant Todd Energy have breached the new law governing New Zealand’s Exclusive Economic Zone, the Environmental Protection Authority says in an Oct. 10 document released by the Green Party. More>>

ALSO:

Gordon Campbell: On Pharmac, Gough Whitlam And Sleater-Kinney

We’re not at the outset of these negotiations. The outset was six years ago, and negotiators were hoping to have some sort of ‘framework’ deal finished in time for the APEC meeting in a few weeks’ time. These ‘extreme’ positions are what we’ve reached near the intended end of the negotiations… More>>

ALSO:

PM Of Many Hats: Questions, No Answers On Whale Oil

Dr RUSSEL NORMAN (Co-Leader – Green) to the Prime Minister: How many times since November 2008 has he spoken with blogger Cameron Slater on the phone and how many times, if any, has he texted him?
Rt Hon JOHN KEY (Prime Minister): None in my capacity as Prime Minister. More>>

ALSO:

Aussie Investigation Dropped: Call On Minister McCully To Pursue The Case Of Balibo Five

West Papua Action is deeply concerned at the lack of any clear outcome from the Australian Federal Police inquiry into the 1975 deaths of the ‘Balibo Five’ including NZ journalist Gary Cunningham. More>>

ALSO:

'Feed The Kids' Bill: Metiria Turei To Lead Fight On Feeding Hungry Children

Green Party Co-leader Metiria Turei is urging all political parties to support the Feed the Kids Bill which she inherited today from Mana leader Hone Harawira. More>>

ALSO:

Parliament Today: State Opening Of Parliament

The House sat at 10.30am on Tuesday before MPs were summoned to hear the Speech from the Throne in the Legislative Council Chamber. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news