Government signals big new infrastructure spend, looser purse strings
Yvette McCullough, Political Reporter, in Whanganui
The government plans to loosen the purse strings and spend up large on infrastructure - but the details are still some weeks away.
Finance Minister Grant Robertson flagged extra spending in his speech to the Labour Party's annual conference in Whanganui.
He said Cabinet had committed to a boost to infrastructure as part of the medium to long term spending plan.
"We are currently finalising the specific projects that the package will fund but I can tell you this - it will be significant."
The government had heeded the calls from the construction industry for "greater certainty" about the pipeline of transport projects from 18 months' time, he said.
"We will give that certainty".
The Reserve Bank has also been calling for the government to spend more and stimulate the economy.
It made sense to take advantage of low government debt and the very low cost of borrowing, said Mr Robertson.
"Right now, we can borrow at an interest rate of 1.3 percent for ten years. Just think about that for a minute - when we came in to office, this was up at 3 percent," he told delegates.
"We have the lowest borrowing costs in New Zealand's history, so it is time to invest."
There will be no details until the next update on the government books - the Half Year Economic and Fiscal Update on December 11 - when Mr Robertson will release more details about the areas of spending, and the price tag.
In his speech, he also acknowledged the "challenging times" in the global economy, with the US-China trade war, uncertainty over Brexit and instability around the world having led to a slowdown of global growth.
"As an open export-based economy we are not immune to this slowdown," Mr Robertson said.
"No one in the world that we compare ourselves to is growing at the rates they were two or three years ago.
"We cannot expect rates of growth to continue unabated in this part of the global economic cycle.
"The IMF and OECD have told us that our growth rates will continue to outperform the countries we compare ourselves to like Australia and that we are well ahead of the average for other advanced economies."