New Infrastructure Fund a Welcome Investment in Growth

Property Council New Zealand strongly welcomes the Government's announcement of a $1 billion infrastructure fund.

Property Council’s Acting Chief Executive, Matt Paterson, describes the contestable fund as “a real investment in growth”.

“Councils in high-growth areas are playing catch-up on the provision of infrastructure for housing and commercial development. The fund gives them a chance to jump off the treadmill and start making real progress in providing infrastructure for growth.

“The fund will give councils much needed assistance. For instance, Auckland will be able to bring forward infrastructure provision to some of its future urban areas, and the development contributions collected can then be used to provide infrastructure in other future urban areas.”

Mr Paterson sees the fund as an important start.

“Although the fund is a sizeable contribution, this really is just the tip of the iceberg. There is a real need in fast growing areas for many billions of dollars of investment in order to build the tens of thousands of new houses needed.

“Importantly the initial billion-dollar fund will create positive multiplier effects allowing councils to do more with their borrowing.

“This interest free loan will not just help councils deliver infrastructure but it will also save them tens of thousands of dollars spent on interest and hedging costs. That money can be reinvested in further infrastructure. It is a great example of a win-win for central and local government.”

The announcement comes on the heels of the Government's RMA reforms, the proposed National Policy Statement on Urban Development, and its Better Local Services reforms recently introduced in Parliament.

“Property Council is pleased the Government is taking holistic approach. It is important that they tackle all three aspects of planning and resource management, being land use planning, Council service delivery and the infrastructure funding deficit.

“In particular, the fund, which is aimed at supporting high growth councils will help them meet their obligations when the proposed NPS on Urban Development is finalised.”

Property Council also welcomes the Government's consideration of urban development authorities to further enable development.

Mr Paterson says "UDAs, if designed well, can address incoherent and contradictory planning rules and land fragmentation.

“UDAs have the real benefit of laying the necessary platform so that developers can hit the ground running, without having to spend considerable amounts of time and money on amalgamating land, plan changes and resource consenting-related issues.

“If master-planning and infrastructure are ticked off the list, you have won half the battle.

“But UDAs must be locally specific to really understand and effectively address local issues. Care also needs to be taken so that UDAs only do what private developers cannot. They must complement and not replace private development.”

ENDS

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