Govt’s shrewd road play?
The Government has opened the floodgates,with a $12 billion surge of infrastructure projects to ‘‘upgrade New Zealand’’.
Roads are the big winner, making up $5.3b of the $6.8b spent on transport, with $1.1 billion spent on rail.
Prime Minister Jacinda Ardern said the programme was ‘‘a once-in-a-lifetime opportunity to invest in New Zealand – modernising our infrastructure, preparing for climate change and helping grow the economy’’.
The top of the North Island will be the biggest beneficiary of the transport package, with $3.48b for Auckland, $991 million in Waikato and the Bay of Plenty, and $692m spent on a single road in Northland, a 22km four-lane corridor from Marsden Point to Whanga¯ rei. For the South Island, Canterbury receives just $159m of projects and Queenstown is getting $90m.
High-profile and contentious roads will be funded and brought forward, including the Tauranga Northern Link, Penlink, and Mill Road, as well as extending a fourlane expressway on SH2 from Te Puna to Omokoroa.
Roads the winner
Auckland’s roads alone will receive $2.2b, with most projects brought forward by about five years. The big Auckland projects include the new Mill Road connection, costing $1.35b, the new Penlink corridor ($411m), and a connection between Papakura and Drury South ($432m).
In the Wellington region, the contentious Melling interchange will be funded and built, alongside an extension of the Ka¯piti expressway from Otaki to north of Levin. Projects were selected based on how quickly they could be funded and built. The $411m Penlink corridor in Auckland will be out for tender almost immediately.
The Tauranga Northern link, costing $478m, will begin construction later this year and be completed by 2025. Likewise the
Melling interchange will begin construction in late 2022 and finish in 2026.
One of the reasons why construction can begin so quickly is that many of these roads, including the Tuaranga Northern Link were planned under the previous government, but delayed under the coalition’s transport plan.
Many of those projects are now back and funded.
Despite the focus on roading, the Government announced three large rail projects, including $371m to extend electrification of Auckland’s rail network from Papakura to Pukekohe. Wellington will also see an injection of cash to its commuter rail network, with $211m for improvements to the connections between Wellington, the Wairarapa and Palmerston North.
Health upgrade
The health system is also getting an upgrade worth $300m, with a focus on maternity care, children, and mental health.
Mental health and addiction will receive $96m and $83m will be spent on child and maternal health.
Neonatal care facilities at Counties Manukau, Auckland, Hutt Valley, and Capital & Coast will be upgraded, as will maternity facilities in South Canterbury and Hutt Valley.
New acute mental health facilities will be built in Tauranga, Whakata¯ ne, and Hutt Valley.
The Government has already announced $400m of upgrades to schools. It’s keeping $4b of the $12b billion up its sleeve for future budgets.
‘Wasted opportunity’
National leader Simon Bridges accused the Government of ‘‘two and a half years of wasted opportunity’’ saying the projects were already in progress under the previous government.
‘‘It’s literally all of National’s work. It’s all things the Government cancelled at the start of their time in office, whilst they have done nothing since then other than argue and discuss and faff about on light rail’’.
Pointing to the Government’s record on light rail, Bridges said it couldn’t deliver infrastructure: ‘‘There’s nothing about light rail today, they’ve given up on their own promises as they swipe ours’’.
So why now?
New Zealand has an infrastructure deficit.
Government borrowing costs are at historic lows, which the Government says is one reason it is spending money on infrastructure now – it’s much cheaper than it was even a few years ago.
The Government borrowed $150 million last Thursday, paying just 1.6 per cent in interest, a far cry from the rates it was paying just five years ago.
Another reason for the Government’s big spend-up is to stimulate the economy.
Spending on infrastructure helps economic growth because the money spent paying people to build things cycles through the rest of the economy, stimulating growth.