$600m for new infrastructure
"You certainly could not accuse this Government of being even a fast follower." Labour’s Phil Twyford
The Government is putting $600 million into a a new company to invest in infrastructure for housing developments.
Its first job will be two Auckland projects intended to support 23,300 new homes in the north and south of the city.
The body, called Crown Infrastructure Partners, is being formed by re-purposing and renaming Crown Fibre Holdings – the company set up to implement the Ultra-Fast Broadband initiative.
The move comes weeks after the Government announced the recipients of its $1 billion Housing Infrastructure Fund, and indicated more infrastructure spending was in the pipeline.
Several councils were keen to get more of the funding but could not put another loan on their books without hurting their credit rating. Crown Infrastructure Partners will avoid this pitfall by building and owning the infrastructure itself.
‘‘Councils will have the option of buying back the infrastructure at some point in the future, but won’t have to commit to doing so,’’ Local Government Minister Anne Tolley said. ‘‘This is all about introducing outside capital to build this infrastructure, so current ratepayers don’t get burdened with all the costs of growth.’’
The Government will invest an initial $600m and will look to get further capital from councils and private investors.
The first two projects on the agenda will be the Auckland North and Auckland South.
Auckland Mayor Phil Goff welcomed the fund.
‘‘Auckland is growing by 45,000 new residents a year and requires unprecedented levels of infrastructure growth to keep up with demand.
‘‘Increasing the supply of housing is a critical part of overcoming our housing shortage and slowing price rises caused by demand exceeding supply of housing.’’
The company will not build actual housing. Much like the Housing Infrastructure Fund, the capital will be used to build roading and water infrastructure that would make greenfield developments possible.
Labour’s housing spokesman, Phil Twyford, said the Government was copying his party’s policy – slowly.
‘‘You certainly could not accuse this Government of being even a fast follower. Now weeks out from an election, and after nine years in office, they are desperate to look like they are doing something,’’ Twyford added.
He said Labour had advocated a debt-finance instrument in 2015.
‘‘Auckland Council has been telling the Government for the last few years that its growth was hamstrung by lack of infrastructure, and a council balance sheet already up against its debt limit.’’
Property Council New Zealand chief executive Connal Townsend welcomed the new Crown company.
‘‘The handbrake has been a lack of infrastructure such as roading, water and sewerage that supports development. Building cities costs a lot of money and infrastructure is a large proportion of that cost,’’ he said.