Is the commitment to the budget responsibility rules weakening?
Because at the Labour Party Conference Grant Robertson has indicated that the Government will shortly announce a big capital spend on infrastructure.
From his speech:
[W]e believe now is the right time to build on Labour’s legacy, and build on the record of this Coalition Government.
Right now, we can borrow at an interest rate of 1.3% for ten years. Just think about that for a minute. When we came in to office, this was up at 3%.
We have the lowest borrowing costs in New Zealand’s history, so it is time to invest.
In terms of where we are in the economic cycle, in terms of the good shape that the Government’s books are in; now is the time to take the next step forward in our legacy of building New Zealand.
I can announce today that the Government will significantly increase spending on infrastructure.
Cabinet has agreed in recent weeks to a package of infrastructure projects that we will be bringing forward into our short and medium-term programme.
I would like to acknowledge the input from our Coalition and Confidence and Supply partners as we bring this together.
We are currently finalising the specific projects that the package will fund but I can tell you this – it will be significant. It will have a direct impact on growth and it will create jobs, especially I hope for our young people.
We are also listening to calls from the construction industry for greater certainty about the pipeline of transport projects from 18 months’ time. We will give that certainty.
I accept that I was being optimistic about the budget responsibility rules. Lower interest rates mean that more can be borrowed with the same effect on the finances.
No doubt the projects will be sprinkled around the country. The Auckland Isthmus light rail is a likely announcement along with strengthening of the electricity delivery system. And rail from Auckland to Whangarei in preparation for a possible move of Auckland port activities may also on the preferred list.
In getting ready for the future the only road projects that should be built are those that help public transport. The North Western busway may be a starter.
This is good brave stuff from the Government. National will struggle to find a way to respond. Although there is already an early indication of what they will do.
Absolutely no need for Govt to borrow more. It’s pockets are bulging from the sweat of hard working kiwis & it’s wasting billions on the likes of fees free and Shane Jones. As for infrastructure, you can’t drive on an announcement. What have they been doing for the last 2 years?— Simon Bridges (@simonjbridges) November 30, 2019