Share offer funds support education, UFB, rail

Proceeds from the Government’s share offer programme provide a further $939 million of new capital investment in Budget 2015 without the need to borrow more from overseas lenders, Finance Minister Bill English says.

“The share sale proceeds provided $4.7 billion to the Future Investment Fund for spending on new public assets without having to borrow,” Mr English says.

Future Investment Fund allocations in Budget 2015 include up to $210 million to extend the roll-out of Ultra-Fast Broadband (UFB). This takes the total investment in UFB and the Rural Broadband Initiative to around $2 billion.

As confirmed by the Prime Minister last month, education receives $244 million for new schools, kura kaupapa and new classrooms. This will allow an additional seven new schools to be built, with the first expected to open in 2017.

In tertiary education, up to $100 million has been set aside for Lincoln University to rebuild its earthquake-damaged science facilities, as part of the Lincoln Hub development.

KiwiRail receives $210 million in 2015/16 and a further $190 million as a pre-commitment against Budget 2016 for its freight rail services and to maintain the national rail network to a safe and reliable standard.

“Rail is an important part of New Zealand’s transport landscape. However KiwiRail’s current operations require around $200 million a year in ongoing Crown support just to break even,” Mr English says.

“The Government is committed to a national rail network, but ongoing subsidies at this level are unsustainable. The funding provides the KiwiRail board with a two-year window to identify savings and reduce the level of ongoing Crown funding.”

Budget 2015 also provides $97 million from the Fund for regional highways, as well as $40 million for investigation, design and construction of urban cycleways.

Other initiatives within the Future Investment Fund in Budget 2015 include:

• Up to $52 million in contingency to replace the Waitangi Wharf on the Chatham Islands.
• $40 million of investments into Te Papa for capital works on its Wellington buildings.
• $35 million to further extend Immigration New Zealand’s new ICT systems to deliver greater border security and more efficient visa services.
• $13 million to relocate the Archives New Zealand Christchurch regional office.

From Budget 2012 to Budget 2015, $3.9 billion of proceeds from the Government’s share offer programme have been invested through the Future Investment Fund. This has included $635.6 million in education, $684 million in health and $990.1 million in transport.

“There is a further $726 million remaining in the Fund to spend on new assets in Budget 2016 without having to borrow,” Mr English says.

“The success of the Government’s share offer programme means taxpayers will not have had to borrow money for new capital spending over about five years. The plan to sell down the Government’s majority stakes in energy companies and Air New Zealand to pay for new public assets is working.”

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