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What priority Infrastructure development?

Press statement, DEUN (Domestic Energy Users’ Network

*Infrastructure development, investment in housing stock, what priority?

* Both major parties are promoting infrastructure spending to stimulate the economy during this recession and enable the New Zealand economy to move forward in the longer term.

Investing to upgrade New Zealand’s houses, would also stimulate the economy, and give long-term benefit to the economy by reducing energy waste. It would employ people earlier, and give a far quicker payback, then investing in roading and energy infrastructure.

Both major parties agree that infrastructure investment requires borrowing to pay for road and rail projects. They agree that actual construction could not begin for one to several years. Resource Management Act consents would be needed for the roads, and probably for rail upgrades, and for new or expanded quarries for the necessary aggregate.

Housing retrofits would employ builders and tradesmen, to upgrade insulation, hot water systems, and heating systems. It would help maintain sawmilling and other housing-related manufacturing. Housing retrofit paybacks begin from the day they are completed.

Upgrading New Zealand houses should not require overseas borrowing, because Government already gets enough windfall profit from electricity to supply the $1 billion Household Fund many times over. Emissions pricing will make these windfalls much greater.

In the financial year ending June 2008, the Crown took $1005 million in GST, income tax and dividends from the electricity sector. Of course only part of that was windfall profits, but it compares with the mere $67 million yearly average outlay to the Household Fund.

A $1 billion Home Energy Project should be able to attract a further $4 billion of co-funding, from home owners, savings in health costs and deferral of spending on new electricity capacity.

Questions to all parties: What priority do you give to infrastructure investment, compared to investment on household energy efficiency upgrades?

How would you assure that the Household Fund will deliver benefits that can attract additional funding both from home owners and from other agencies?


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