The Government will allocate $11 billion in new capital infrastructure over the next four Budgets in addition to spending already included in agency baselines, Finance Minister Steven Joyce says.
“We are growing faster than we have for a long time and adding more jobs all over the country,” Mr Joyce says. “That’s a great thing, but to keep growing, it’s important we keep investing in the infrastructure that enables that growth.”
Mr Joyce says that the focus will be on the infrastructure that supports growth, with capital investment in Budget 2017 being increased to $4 billion, including $812 million for reinstating State Highway One, north and south of Kaikoura.
“We are investing hugely in new schools, hospitals, housing, roads, and railways. This investment will extend that run-rate significantly, and include new investment in the justice and defence sectors as well.
The capital commitment in Budget 2017 will represent the biggest addition to the Government’s capital stock in decades.
“To put that into context, the net new capital allocated in the last four Budgets was $4.8 billion, of which $4.1 billion was funded through the proceeds of the mixed ownership model programme,” Mr Joyce says. “In Budget 2016 we were forecasting just $3.6 billion in new capital spend between Budget 17 and Budget 20 compared to $11 billion now.”
“The $11 billion is additional spend on top of investments already planned by the Government.
If you add the Government’s budgeted new capital investment together with the investment made through baselines and through the National Land Transport Fund – the total is around $23 billion over the next four years, or an average of nearly $6 billion per year.
“And we want to extend that further, with greater use of public-private partnerships, and joint ventures between central and local government and private investors.”
“Details of how the first tranche of that money will be invested will be laid out in the Budget” Mr Joyce says. “But in anyone’s language, this is a very big capital spend over the next four years.
“As a country we are now growing a bit like South-East Queensland or Sydney, when in the past we were used to growing in fits and starts,” Mr Joyce says. “That’s great because we used to send our kids to South East Queensland and Sydney to work, and now they come back here.
“We just need to invest in the infrastructure required to maintain that growth. Budget 2017 will show we are committed to doing just that.”
Note for editors: Revised capital allowances for Budget 2017 to Budget 2020