With the government’s books looking healthy, about two weeks ago they announced they’d “significantly increase spending on infrastructure”. Yesterday they gave a bit more detail about that:
The Government is lifting capital investment to the highest level in more than 20 years as it takes the next step to future-proof New Zealand.
Finance Minister Grant Robertson has announced $12 billion of new investment, with $8 billion for specific capital projects and $4 billion to be added to the multi-year capital allowance.
The $8 billion includes:
- $6.8 billion for new transport projects, with a significant portion for roads and rail.
- $400 million one-off increase to schools’ capital funding
- $300 million for regional investment opportunities
- $300 million for District Health Board asset renewal
- $200 million for public estate decarbonisation
The specific projects will be announced in early 2020.
“The new investment is forecast to increase the size of the economy by a further $10 billion over five years, with further positive impacts on GDP beyond that period,” Grant Robertson says.
With debt low and borrowing costs at record lows, the conditions are right for the Government to invest to future-proof New Zealand.
$6.8 billion towards new transport projects is a huge sum of money. To put it into perspective, the government are currently spending about $3.5 billion annually on new infrastructure and maintenance so this investment is nearly twice that. (Note: this includes both state highways and their share of local projects but doesn’t include the City Rail Link.)
The is no indication yet just which projects will get funding, with the government only saying it will be ‘shovel ready’ projects, although other comments have suggested they will be short to medium term projects. Just as important are what the mix of projects are and there are already rumours flying about of a number of motorway scale projects in the mix, which hasn’t been ruled out.
Robertson could not rule out funding some of National’s “Roads of National Significance” within the package.
“What we inherited is a wish-list of projects. These were not funded, and in many cases they were not consented,” Robertson said of the roads.
He was unable to perfectly define “shovel-ready” for the $8b of spending, saying some of the projects were already consented while others were not.
The highway building industrial complex has been pushing for a lot of major roading projects and I suspect some in the NZTA have been quick to reopen the motorway plans drawer. This means I wouldn’t be surprised if we see a bunch of projects like Penlink, Mill Rd,, Cambridge to Piarere (back to 4-lanes), Tauranga Northern Link in the mix.
Yet at the same time as the announcement above, the government also released their priorities for the 2020 budget and the first priority on the list is:
- Just Transition – Supporting New Zealanders in the transition to a climate-resilient, sustainable, and low-emissions economy
If they do opt to bring forward the building of a bunch of low value and traffic (and therefore emissions) inducing motorways it will be interesting to see how they reconcile them with the priority above.
All of this ties into something I’ve been thinking a bit about recently in the event the government did significantly increase investment like they’re now planning – the need for a ‘Transition Fund‘. The idea was that we should invest in more infrastructure but only in projects that will help us achieve the budget priority to support a just transition to low emissions, which would also tie in with the Government Policy Statement on land transport’s four key priorities: Safety, Access, Environment and Value. With all of that stated, here are some of the projects we that should be included:
Third and fourth main south of Otahuhu
This project should surely go ahead as quickly as possible without saying and it’s absurd it still hasn’t been approved yet. In the short term we need the third main between Otahuhu and Wiri but over the medium term we’re going to need a fourth main and extended to Papakura and longer term to Pukekohe.
This should be brought forward to enable it to tie in with ….
Rail improvements between Auckland to Hamilton
A very basic service between Hamilton and Auckland is due to start next year but the government have previously talked up a more permanent and higher quality service. Among other things this would require investment such as improved alignments and double tracking through the Whangamarino Swamp to enable trains to run much faster than is currently possible. Perhaps aiming for something similar to what is achieved on the Gold Coast line in Queensland where trains reach 140km/h.
Like the third main, it almost goes without saying that we need electrification to Pukekohe. However instead of just a one off project this should be the start of an ongoing programme to electrify lines. Overseas, countries that have rolling electrification programmes, such as in Germany, tend to have much lower costs per kilometre because the ongoing nature creates a stable stream of work that companies can invest in both people and machinery to be more efficient – exactly what the construction industry here say they want with investment.
Since the NZTA have taken over
Skypath Auckland Harbour Bridge Pathway they have opted for a higher quality but obviously much more expensive design. The problem with this is that to build it likely sucks funding away from a lot of other walking and cycling projects around the country. As such it would make sense to pull the project out of normal funding streams to get it built.
Urban Cycleways fund 2.0
The urban cycleways fund idea was one of the better ones from the previous government and this government have continued it on through a higher funding allowance in the GPS. But even with this boost, more and more councils are looking to deliver cycling improvements and so more is needed. Another cycleway fund would help enable more bike projects to get off the ground.
NW Bus improvements
As we talked about recently, there is a renewed push to get a busway on the Northwestern, least an interim solution in for the Northwest. Funding it from a transition fund would help to bring it forward so we can start to see improvements.
On top of the rail improvements mentioned earlier we could do with a speed up to the rollout of the Eastern Busway and of the Airport to Botany busway would be great to get underway.
Buying electric buses is not likely to be on the list of projects as they will be coming from offshore but perhaps building the charging infrastructure could be.
There will likely still need to be some roads on the funding list but these should focus on expanded safety upgrades as well as more localised projects with changes such as 2+1 upgrades.
What do you think should, and shouldn’t, be on the government’s list?