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Labour’s infrastructure spend announcement

Written By: - Date published: 12:06 pm, December 1st, 2019 - 35 comments
Categories: Economy, grant robertson, infrastructure, labour, public transport, transport, treasury - Tags:

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.

35 comments on “Labour’s infrastructure spend announcement ”

  1. Jenny How to get there 1

    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.

    Grant Robertson

    Very welcome news.

    The world is crying out for Green infrastructure, which really can only be the sort of infrastructure spending being considered.

    Let me be the first on this platform to congratulate the Government and the Cabinet for this momentous decision.

    • John Clover 1.1

      It would be a great long term goal but in the current climate and lack of workers it is pure election foolery/bribery for the short or medium as suggested by Robbo. 🙂

      I see the govt position as similar to my own and I am glad I currently spend only what I have and no longer borrow … despite only 1,3% interest,

      • greywarshark 1.1.1

        The government budget to provide for the country's needs and yours are so far apart as comparable economies that I can't believe you are coming to a political blog and prating on in this vein. It's pettifogging and truth-shrouding National speak.

  2. Clive Macann 2

    Well,

    Simon, I think the Shane Jones spend up is a huge "investment" to NZ small business and small communities. Note I said Investment as opposed to your "wasting billions" comment.

  3. pat 3

    After committing to the debt ceiling in 2017 this was always going to happen in time for the next election .

    What will be informative will be the nature of the projects announced….will the action reinforce the rhetoric re transformation?…or will we continue to tie ourselves into the existing paradigm by producing more of the same

  4. Climaction 4

    What if some of it is spent on four laning state highways? Like between auckland and whangarei?

    asking for a friend

    • Ad 4.1

      I think they'll open Puhoi-Warkworth and measure the demand first.

      There's plans in the drawer for the Brynderwyns.

      I'd see Whangarei-Marsden Point rail link as higher on the agenda of this kind of government.

      • Climaction 4.1.1

        The great sage lprent, who knows all about infrastructure amongst other things, continuously states that cars are like goldfish, they grow to fill the roads built for them.

        so and given sh1 north of Puhoi is one of the most congested extra urban parts of the state highway network on a daily basis, the demand is existing and expected grow. Particularly if north port is developed futher

        • Ad 4.1.1.1

          NZTA will wait to see the evidence when it opens.

          • Climaction 4.1.1.1.1

            No they won’t. That’s after the next election. It’s going to happen, why not just commit and be done with it rather than waiting and seeing and being late to the party again?

            new Zealand’s infrastructure is 30years out of date and you think labour thinks it can just wait?

            • Exkiwiforces 4.1.1.1.1.1

              Bring back the MoW as design and quality control Government Dept for all Government infrastructure projects as in some cases back in the if they didn’t the manpower or equipment at the time they subcontracted the project out and it was built to MoW specifications as the MoW had oversight of the project unlike the knuckle heads at NZTA etc where any project over budget or built so cheaply it’s falling apart within 5yrs after opening.

              • greywarshark

                Gordon Campbell refers to PPP comments that Robertson talked out some years ago. What if the government is trying to have its surplus and nibble away at it too? He has written a thoughtful article that if correct would aim hard facts into our pretty balloon and reduce it to a piece of coloured trash.

                https://www.scoop.co.nz/stories/HL1912/S00004/gordon-campbell-on-ppps-and-labours-infrastruture-plans.htm

                Could this be the summary: The cowardly, timorous, unbusinesslike Labour government, and also the National jesters-in-waiting, are just putty in the hands of the steely eyed financial lot on the RW phalanx backed by the Treasury.

                Or am I wrong, so wrong that I should eat my hat and go vegan for six months? I won't of course whatever, because comment in this political era is just a lot of flamboyant flourishes, but it would do to entertain the spectators.

            • Ad 4.1.1.1.1.2

              Election dates are important to politicians. The NZTA machine generally rolls on.

              Puhoi-Warkworth is what is known as an 'availability ppp'. With the comparisons coming up between the Puhoi-Warkworth and Transmission Gully, there's going to be a debate between NZTA and MoT that will take a while to settle about whether more ppp's in highways are a good idea.

              The next stage from Warkworth to Wellsford will also get drawn into a broader discussion about repairing and further upgrading the North Auckland Rail Line at the same time. Then there's Auckland-Northland rail electrification. Then there's shifting the port. No part of the puzzle is separate, and absolutely none of it is inevitable.

              Jobs this big require politicians to unequivocally say what they want and commit even if the benefits are weak or too distant to register in Treasury modeling. In my experience about 75% of a major job is getting everyone to agree that it should be done and getting the funding together. 25% is doing it.

              • Climaction

                Yet strangely, opposing it as a holiday highway was labour in opposition.

                yet now, there might be a case for it and all the little acolytes have gone through a quick two hour media training session and are paving the way for it to happen, politically.

    • cleangreen 4.2

      Well done Grant Robinson;

      We need rail in all regions modernised to make it more user friendly ready for moving trucks off the roads and onto flat bed wagons like overseas do all the time as they drive the truck and trailer onto the rail wagon and ship it by clean energy with no tyres or heavy use of diesel.

      Then with rail using 'steel wheels on a steel track' with the advantage of a low friction coupled with low less than 20% diesel to move each tonne each km makes perfect sense for or goal to make transport carbon neutral.

      A win win plan Grant has actually figured it out ahead here..

      • greywarshark 4.2.1

        Better get the name right cleangreen whether he does the right thing by your region or not. His name is Grant Robertson (call him Bert for short – (think of Bert and Ernie from Sesame Street who were a decent pair of blokes. We could do with the same on real street.)

      • Bruce 4.2.2

        I think cars too on flat bed rolling stock, drive on, enjoy relaxed travel to as close as the rail goes to your destination, drive off and go do what you came to do.

        Then there's always the Friday nite rail car to Opua wharf and water taxis about the Bay for a reasonably priced family weekend get away.

  5. Ad 5

    The big decade-scale projects like shifting Auckland's port to Whangarei are not the problem (although if he felt like it he could sell Devonport Naval Base and shift it at the same time, and the Devonport property prices would assist NZNavy's bill for shifting).

    Those big projects have their own momentum and take many years – often decades – to land as contracts that get done. It means the big contractors can plan their workforces and international partners well in advance.

    It's the medium-scale ones (in transport, water, and electricity) that the country and its regions need to simply keep going that are the real problem.

    A little test for the new Infrastructure Commission: will the government respect them enough to listen to a rigorously-tested set of demands or will the pork-barrel politics of election year party politics jump on them? The NLTP and Kiwirail Asset Management Plan are in for a test.

    • Exkiwiforces 5.1

      I believe that RNZN Dockyard at Devonport will have to move at sometime in the near medium to long term as the proposed new ships for the RNZN in the 2019 NZDF Capability Plan will be to big for the existing graving dock (dry dock) at Devonport as they will be too wide, too long or a mixture of both.

      There has been talk to move most of Devonport to up Nth and a few vessels down to Dunedin namely the new proposed Southern Ocean Patrol Vessel along with a couple of minor vessel.

      I’ve seen a few articles from the ODT prior to the reopening of Hillside workshops that Ronnie was put a case to together involving the reopening of Hillside and the re-establishment of RNZN base Dunedin area as area for heavy to medium size engineering centre of excellence for training up tradies and conduct R/D as will. The same could apply for Northland as well in the same context as both regions have been hit hard over the 30 or 40yrs of this Neo- Con/ Neo-Lib BS.

      • Ad 5.1.1

        Devonport is part of the NZDF strategic property review they've got going at the moment.

        Port Chalmers for southern fisheries patrols and Marsden for the rest makes a lot of sense to me.

      • Exkiwiforces 5.1.2

        I think the moving RNZN to Northland is almost a shoe in, as the only place is sounds along with RMA and a whole host of other issues. From a historical perspective the sounds while earmarked to be an Allied Naval Base during the WW2 if the Battle of the Coral Sea went in favour of the Japanese as would’ve all the other ports from Auckland and the from Brisbane northwards at the mercy of the Japanese Combined Fleet.

        Its been interesting to see the Navy making Greater use of the Dunedin Region as a supply, resupply and for periods of self maintenance while the OPV’s and just recently of the Landing Support Ship L421 for their runs down Sth since this Government has been in office.

        I wouldn’t be surprised to a NZDF Joint Base being established in the Greater Dunedin Region in the near future for operations in the Southern parts of the South Island and further afield into the Southern Ocean Region in the coming decades. The Greater Dunedin Regional Airport is capable of P8 and Broad Area Maritime Surveillance (BAMS) UAV operations once the appropriate infrastructure is or if built in the medium to long term. I do recall in the 90’s that the Government of deployed an ANZAC Frigate (I think the old Type 12’s did a little better, but lack the range as they use FFO instead of Diesel fuel)down Sth, it copped a hiding from Mother Nature while on station and was out of commission for 3-6mths at the time for repairs.

        (note this post in reply Ad’[email protected] 2 as the iPad is playing up again)

  6. Peter 6

    Bridges is quite right to ask what they've been doing for the last two years.

    I think they've been giving him the opportunity to look a leader, an inspirational politician or a simple fool. I congratulate him for how he grasped the challenge in both hands and how he achieved so well with one of those.

    • Anne 6.1

      laugh I think the PM should bestow on him a bravery medal for having so successfully achieved one of those.

      The Gov. Gen. can pin it on the breast pocket of his best suit at the next medal ceremony.

    • cleangreen 6.2

      Peter was National in power for the years 2008 – 2017?

      Was Simon Bridges there in the Government then also????

      Could they have then moved the naval-NZDF Joint Base there then perhaps?

  7. UncookedSelachimorpha 7

    " I can announce today that the Government will significantly increase spending on infrastructure. "

    Unfortunately because of Labour's neoliberal blindness, most of this will be funnelled via private firms, with the wealthy owners clipping the ticket the whole way and workers on minimum wage wherever possible. Labour does not believe in direct implementation by the state (which would benefit the owners of state capital – i.e. all of us, instead of the owners of private capital – i.e. the 1%).

    I work in one of the industries benefitting from the PGF – the bulk of the benefit will go to the already very rich owners (in my industry, anyway).

    • Ad 7.1

      The Ministry of Works is never coming back. Nostalgia just ain't what it used to be.

      Even in large scale infrastructure, people are going to make money. Shock horror I know. On most jobs constructors don't make more than 6%, and quite often they lose money.

      Even in light rail – the largest infrastructure project on the horizon – one arm of the state is proposing to make money for New Zealanders.

      • UncookedSelachimorpha 7.1.1

        Nothing to do with nostalgia, just to do with what gives the most benefit to society.

        It is not just how infrastructure is created (with private companies clipping the ticket and driving down wages etc) – it is also a question of who owns it (and benefits from that ownership) after it is built. Labour is still fairly keen on public private partnerships – which is equivalent to state welfare for private capital owners.

  8. Ad 8

    I am really happy that the first chunk of infrastructure spend is on making schools better places to be. We need results delivered in 12 months, not more roads that take two or three years to get anywhere.

    • ScottGN 8.1

      I agree totally Ad. Piling money into schools and/or hospitals is a smart move from Ardern and Robertson. Parents heading to the polling booths next year will be reminded of the work Labour governments do every time they do the school run. Plus it’s hard for the Opposition to mount a counter argument against this sort of investment and National is really vulnerable to accusations of neglect in these areas.

      • Incognito 8.1.1

        It’s a cunning strategic move.

        Ms Ardern says this is also about jobs – especially in the trades.

        She's urging schools to engage local builders, plumbers, carpenters, roofers, and landscapers.

        https://home.nzcity.co.nz/news/article.aspx?id=302126

        With the money becoming available immediately, it could well be the talk over BBQs during Summer. Schools have only a few more weeks to go until the School Holidays. Brilliant!

        I think they blindsided National big time. Marvellous!

        • Sacha 8.1.1.1

          It’s a cunning strategic move.

          Yes! Sigh of relief here.

        • cleangreen 8.1.1.2

          It was a gem that Grant produced there that will ensure the next three years for the coalition gladly.

          I am elated at the sight of regional rail finally being lifted back into service again with a serious commitment he has shown to spend on infrastructure again to lower road truck gridlock that was killing us all.

          • Herodotus 8.1.1.2.1

            So for those schools who have been waiting many years for the MOE to get moving to repair their leaking buildings, will they have to wait still, as this gift has a 2 year sunset clause ?

            Whist as time moves on these buildings continue to deteriorate, and the cost to remedy increases.

            Still this achieved IMO its prime objective … Make a headline. Like Kiwibuild not a great deal of thought regarding implementation. "Construction in Auckland relies on migrant workers to fill a labour shortage. Migrants are sold a dream but the reality can be under the table jobs that don't guarantee pay or safety, Harrison Christian writes."

            https://www.stuff.co.nz/business/117551892/death-of-a-migrant-under-the-table-workers-building-aucklands-multimillion-dollar-homes

  9. sumsuch 9

    These pricks will at least do the right thing after the next election or never expect another vote. Strange people.

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