The Budget’s promise of a wave of investment in new “shovel-ready” projects is far smaller than the bidders behind $136 billion of aspiring projects would have wished for.
At $3 billion, the total set aside for projects that can be started in the next year is even smaller than the $5-to$10 billion that sources close to the process of choosing projects had indicated was likely.
Nor, at this stage, is there a list of the successful projects.
An Infrastructure Reference Group, led by former energy and construction sector leader Mark Binns, is still some weeks from delivering a report that had been scheduled for delivery by now.
It will “advise us on potential packages in different regions across the country in the sectors we as a government wish to prioritise the most, including water, transport, housing, environment and health,” said Infrastructure Minister Shane Jones.
Three priorities will drive the projects chosen:
- Immediate job creation and income growth;
- Construction activity that will get under way within 12 months;
- Visibility to the public “to provide Kiwis with confidence that our economic recovery is hitting the ground running”, Jones said.
He also indicated that fast-track processes being urgently injected into the Resource Management Act may not be enough to ensure “money is getting out the door and projects are not languishing in bureaucratic red tape.”
“The IRG will help us navigate what extraordinary powers may need to be used, including the new RMA fast track process – to get these projects going.”
Finance Minister Grant Robertson said further infrastructure funding was likely to emerge from the unspent $20.2 billion in the covid-19 recovery fund announced today.
Also potentially constraining the size of the shovel-ready budget is the $12 billion of infrastructure spending announced back in January when covid-19 was just a headline in the World section but the economy needed a bit of stimulus anyway. That package was already soaking up available capacity in the New Zealand infrastructure sector.
More for rail
Also announced is $1.2 billion of new capital investment in the rail system, another New Zealand First party priority, taking rail investments under the current government to $4.6 billion.
Some $246 million will go to track investment and supporting infrastructure including a new train traffic management system for the Auckland rail system, $400 million of inter-islander ferry replacement and wharves, and $421 million for new wagons and locomotives.