Government announces $1.3b boost for transport

Finance Minister Michael Cullen has announced a $1.3 billion boost to transport funding in today's Budget.

Mr Cullen said the money would go on a range of projects, including the Manukau harbour crossing in Auckland and investigating Wellington's Transmission Gully plans.

The extra money, he said in his speech to Parliament, would bring total transport spending to $13.4 billion.

He said the additional funding would meet a funding shortfall identified earlier this year.

Transport minister Annette King said: "This will assure New Zealanders that the Labour-led government regards a world-class transport network, which moves people and goods safely and efficiently, as a centrepiece of our drive to transform the New Zealand economy."

The main projects are:
* Warkworth improvements stage 1
* Manukau Harbour Crossing (Auckland Western ring route), to be completed by 2011
* Tauranga Eastern Motorway
* Investigation of Transmission Gully (Wellington Western Corridor)
* Christchurch Southern Motorway
* Arahura Bridge replacement

Contractors Federation chief executive Richard Michael said the spending increase was good news for contractors.

He said the amount was "realistic" in terms of spare capacity in the road-building industry and there was a good spread of projects across the country.

Auckland Chamber of Commerce chief executive Michael Barnett said the package was "very positive" and the Government appeared to be delivering on its promises. Wellington Regional Chamber of Commerce also welcomed the announcements.

Though Mr Cullen also announced funding for health and education, National leader Don Brash said the speech was "incredibly boring" and "profoundly disappointing".

He described it as the "Bondi Budget", suggesting New Zealanders would emigrate to Australia. "[Prime Minister Helen] Clark and Cullen want your grandchildren to be cheering for the Wallabies," Dr Brash said.

The Budget Mr Cullen presented carries an operating surplus of $8.5 billion this financial year, which ends on June 30. There were - as expected - no tax cuts in the announcement.

That surplus is forecast to reduce to $5.7 billion in 2007, $4.3 billion in 2008 and bottom out at $3.5 billion in 2009.

Dr Cullen's speech to Parliament was a mixture of pride and prudence -- New Zealand is well-placed to deal with any future economic uncertainties and the heavy cost of an aging population, but there is no room now for tax cuts or lavish government spend-ups.

"The fool who spends on the upturn will find himself broke on the downturn," Dr Cullen said.

"Budget 2006 demonstrates the common sense, consistent, long-term view that has been taken over the previous six budgets."

Dr Cullen said more would be spent on roading than the Government gained through petrol tax, and he was prepared to create a "cushion" by issuing up to $1 billion in infrastructure bonds.

The health budget will increase to $10.6 billion through an extra $750 million, and within the additional funding is $126 million for care of the aged and $76 million to fight obesity.

There is more money for welfare, combating family violence and maintaining law and order -- all detailed in pre-budget announcements that show Labour is looking after its core policies.

Dr Cullen is also dealing with his "economic transformation" agenda.

To back that up, over the next four years he is putting $361 million extra into the school sector, $166 million into tertiary education and skill training, and $162 million into early childhood education.

- HERALD ONLINE STAFF, NZPA