Budget 2024: Infrastructure billions shows Government ‘true to their word’ – sector leader

Budget allocations of billions of dollars for Cyclone Gabrielle and Auckland Anniversary flood repairs as well as road and rail funding have been welcomed by an industry leader who says the money is crucial, more than expected and shows this Government is delivering on what it had promised.

Nick Leggett, Infrastructure New Zealand’s chief executive, today expressed satisfaction that infrastructure appeared as one of six key focus areas of Budget 2024.

“They promised to be an infrastructure Government and this Budget shows they’re being true to their word.

“There were holes in the National Land Transport Fund and the $4.1 billion going to that will be a significant plug but what we’re also seeing is that they’re not forgetting renewal.

“For example, the $939.1m to repair roads is above what they had already promised so we know New Zealand has a significant infrastructure deficit,” Leggett said.

This Government appeared to have recognised the deficit with both roading and rail maintenance and had allocated “significant dollops” to fund this, Leggett said.

Nick Leggett, Infrastructure New Zealand chief executive, praised Budget 2024.

Budget 2024 said it had laid “the foundations for a better-performing infrastructure system, with investments to ensure New Zealanders spend less time waiting in traffic, climate resilience is improved, and children learn in modern schools and classrooms”.

Key infrastructure funding in Budget 2024 are:

• Crown funding for the National Land Transport Fund upped by $1b to $4.1b to speed priority projects including the Roads of National Significance.
• $1.2b for new Regional Infrastructure Fund.
• $1b for rebuilding and recovery after cyclone and floods including $939.3m to fix roads.
• $200m to support KiwiRail to carry out maintenance and renewals on the road and rail networks.

Leggett said that $939.3m to repair roads looked to him like an increase to what had previously been announced, although he already knew about the $1.2b.

“That $939.3m was, however, linked to road repairs caused by Cyclone Gabrielle and the Auckland floods.”

He also pointed to $266.9m today to support KiwiRail metro rail networks in Auckland and Wellington, saying it was vital to keep networks flowing in those big cities.

The Government said today six key focus areas of Budget 2024 are:

1. Fiscally responsible Budget.
2. Tax relief.
3. Spending on health, education, law and order.
4. Savings in Government to boost tax relief and frontline services.
5. Infrastructure investments for growth.
6. Fiscal discipline to return to surplus and lower national debt.

Auckland flooding - Budget 2024 includes money for repair work.

Budget 2024 also referred to $68b infrastructure spending over the next five years, which Leggett said would be “a record level of capital investment. It’s beyond anything New Zealand has spent previously”.

Leggett praised infrastructure being one of the six top priority areas.

The biggest roadblocks to getting infrastructure were a lack of people and flawed systems, he said, so he also praised a boost to the apprenticeship scheme, starting in January, targeted at first-year apprentices “and that’s also positive”.

“We’ve also seen $5m for the establishment of a national infrastructure agency. It’s something the Government promised but we hope there will be legislation to establish that soon.

“We’ve got to get a more coherent way of delivering infrastructure and that’s a really good signal.”

Other aspects pleased him too.

“We were concerned about the lack of capacity for the Government to deliver on resource management replacement but the Budget has allocated $92m towards that so we’re very happy they’ve listened to us on that.

“They’ve also listened when it comes to a committed future pipeline because they have an increased multi-year capital allowance for investment-ready infrastructure projects.

“The Government is following through on its promises with money, in a very restrained fiscal environment. What this Budget recognises is that infrastructure is the bedrock of the path to productivity and prosperity.”

Research from ASB economists showed New Zealand faces a $1 trillion bill during the next 30 years to bring the country’s infrastructure up to scratch and to future-proof it to meet challenges, including climate change.

The country’s population is expected to be anywhere from 500,000 to two million people higher in 30 years, which would require an additional 175,000 to 700,000 dwellings and associated infrastructure, the ASB Infrastructure Report said.

On top of that, climate-change pressures were becoming more acute with the country’s infrastructure lacking resilience and being heavily exposed to natural disasters, it said.

Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.