Infrastructure and Transport – Breaking Down the Budget

Default Profile ImageBen O'Connell
Infrastructure and Transport

More than $1 billion for cyclone relief, resilience, and emergency preparedness in the coalition government’s 2024 budget begins the conversation about transport and infrastructure.

The heavyweights on the list of transport commitments are $1 billion over four years to accelerate Roads of National Significance and $939.3m over four years to repair roads damaged by Cyclone Gabrielle, the Auckland floods, and other North Island weather events.

Criticising this, though, is Green Party’s spokesperson for Transport, Julie Anne Genter, who says, “The coalition Government is stuck in a time warp, obsessed with building a handful of expensive highways to take us back to the past with them.”

“We will be paying back these projects for decades, just to wind up stuck in traffic again. Investments that improve public transport, walking and biking cost far less and have higher benefits – unlike vanity roading projects.”

Infrastructure

Hon. Chris Bishop, Infrastructure and Housing Minister, outlined the Budget allocations in a statement. There’s a lot to unpack here.

Key infrastructure investments in Budget 2024 build on the existing capital pipeline, including programmes already in delivery:

  • $1.2 billion for the Regional Infrastructure Fund to support the growth of our regional economies. This includes an initial investment of $200 million in flood resilience infrastructure.
  • $2.68 billion in roads, rail, and public transport to unlock economic growth and enable Kiwis and freight to get to where they want to go quickly and safely, including 17 new Roads of National Significance and funding for the Rail Network Investment Programme. This Budget boosts the Land Transport Fund with an additional $1 billion in capital funding, over that previously signalled, to accelerate construction of the Roads of National Significance
  • $1.5 billion in school and kura property so kids can learn in safe, warm and dry schools, and the school property portfolio can expand to accommodate more students
  • $2.1 billion for law and order, including funding for an 810-bed expansion of Waikeria Prison to support stronger sentencing and capital costs associated with delivering 500 new police officers
  • $408 million to upgrade Defence equipment and infrastructure
  • $140 million to deliver 1,500 new social housing places
  • $103 million to meet emerging cost pressures in Health NZ’s infrastructure pipeline, which includes $11.6 billion of investments over the forecast period.

Regional Development Minister Hon. Shane Jones from NZ First says the Regional Infrastructure Fund will build a more productive economy.

“Building infrastructure for growth and resilience is one of the Government’s five pillars for rebuilding the economy. This fund, $1.2 billion over three years, will invest in new and existing infrastructure across regional New Zealand, focusing on resilience and enabling infrastructure.”

Rent Increases of Concern

To briefly touch on rent increases, Kiwis are concerned about the Budget’s impact on the housing market.

“There will be a lot of people today looking for the $250 they were promised, only to find out the average household is getting a lot less than that while at the same time, rents will keep rocketing up,” Labour’s Chris Hipkins said on Budget Day.

“The Government promised it would deliver “downward pressure” on rents, but they’ve broken that promise too. Treasury says, ‘rents are forecast to continue rising rapidly over the early years of projection’, which it attributes to waning building activity and strong population growth.

“This follows a letter sent to the Government and signed by the four peak bodies representing building and construction firms this week expressing concern about decisions to cancel or defer infrastructure projects, which is leading to a significant slowdown in work, collapse in business confidence and the risk of an exodus of skilled workers.

“The upshot is the Government isn’t building more houses, which ultimately means more pressure on rents, and they’ve removed the First Home Grant, which locks more people out of home ownership. That’s despite a $2.9 billion tax break for landlords who don’t need it.

“It’s also going to become less secure to be a tenant, with the Government bringing back no-cause evictions. It’s no wonder people aren’t very excited about yesterday’s Budget,” Chris Hipkins said.

Cuts to transitional housing and public transport had NGO E Tipu E Rea Whānau unsure, too. “E Tipu e Rea and other similar services will inevitably pick up these costs to increase health and social care access and therefore outcomes for young parents and their pēpi. Will the government consider these financial impacts on health and social services who work with young parents and their pēpi?”

Transport Projects

Transport Minister Simeon Brown says Budget 2024 confirms a $2.68 billion investment in roads, rail, and public transport to unlock economic growth and enable Kiwis and freight to get to where they want to go quickly and safely.

  • Announced before the Budget was $63.6 million for Surf Life Saving with Coastguard.
  • $266.9m over four years to upgrade and maintain Auckland and Wellington rail networks, including $159.2m over two years to complete Auckland’s rail network rebuild
  • $200m over four years for KiwiRail national rail network maintenance and renewals
  • $10m over four years for Airways NZ to complete the minimum operating network of Ground Based Navigation Aids used to safely recover aircraft
  • $44m to support the Civil Aviation Authority in carrying out core functions while fee and levy rates are reviewed
  • $23.1m over four years for critical frontline rescue services to respond to severe weather events and emergencies
  • Extra $1b over four years for the National Land Transport Fund

Not Just Cars

Julie Anne Genter says, “The Government is displaying short-term thinking by neglecting to invest adequately in upgrading shipping and port infrastructure as well as rail freight connections. So much for a government that says it wants to help businesses get moving.”

“This government wants to drive New Zealand back to the 1950s where simply adding lanes to urban highways guides our response to congestion – instead of moving people and goods more efficiently. This approach makes our necessary transition to a more resilient transport system with sustainable alternatives so much harder.”