Trans Tasman's Political Pulse - 23 May, 2017

The Budget – Filling The Infrastructure Gap

INSIGHTS ABOUT THE NEWS - As Finance Minister Steven Joyce prepares to present his first Budget on Thursday, much of the commentary is around how he treats the surpluses in the years ahead. Clearly, some tax relief is on the agenda, particularly for low and middle income families.

The big ticket social spending portfolios of health and education will also take their share of the pie. But as ANZ Bank economists have pointed out NZ still has an immense investment requirement, which they say largely reflects the need to cater for population growth pressure.

The Govt has indicated it plans a big surge in its capital budget earmarked for infrastructure. Over the next four Budgets the Govt has indicated it will allocate a further $11bn toward capital infrastructure – taking the total capital investment over the next four years to around $23bn.

The questions are will it be enough and where will it go? The fragility of NZ’s transport system was seriously exposed by the Kaikoura quake. It should be a priority to make it more resilient. Budget 2017 will provide up to $812m for reinstating State Highway 1 between Picton and Christchurch, but there are many vulnerable spots.

Then there’s the question of congestion on motorways, not just in Auckland, but also in the capital and to a degree in Christchurch. The Govt is expected to extend the Roads of National Significance programme. Auckland’s public transport needs are another pressure point.

The trucking industry, vital to the NZ economy, is reaping big benefits from developments like the Waikato and Kapiti Expressways. The question is: will there be a radical change in direction if a Labour/Green Govt is elected?

The Greens vigorously oppose new roading developments and want to divert funds into subsidising public transport. Labour seems preoccupied with housing issues, and wants to cut immigration, particularly of work visas (which would hit the trucking industry, desperately in need of drivers). And NZ First wants to spend vast sums on the rail network (without any cost-benefit analysis).

Would they be able to find a common direction and would it be a dead end for roads?
For analysis and further updates see this week’s edition Trans Tasman's sister publication,
NZ Transport Intelligence Business Alert

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