With local elections in full swing, there’s a greater focus on the direction that our councils are moving towards and how much is it going to cost. Wrapped up in these discussions is the the fact that right across New Zealand we need to address our infrastructure deficit after decades of neglect. Planning to address this deficit will not be easy, or cheap, but is critical to aiding growth and fixing our housing issues.
Today’s Wellbeing Budget is a significant departure from previous budgets. Finance Minister Grant Robertson has laid out an ambitious spending plan for the economy based around the government’s five wellbeing priorities. The test will be how achievable this plan is.
The latest Infometrics Infrastructure Pipeline Profile shows that average infrastructure investment across the country is expected to be 28% higher over the next 10 years compared to the 2010-2018 period. A total of $129 billion in capital projects are estimated to be built over the 2019-2029 period.
Our latest Infrastructure Pipeline Profile sheds light on which infrastructure areas local councils are looking to invest in over the next 10 years. Capital spending by local councils is expected to top $53b over the next decade, compared to $39b over the previous nine years.
Infrastructure spending around New Zealand is a hot topic. Our Chart of the Month for August details our understanding of infrastructure spending across New Zealand and what is being spent where.
“Other construction” activity has been surprisingly weak over the last few years. This article unpicks what goes into other construction work and highlights that the softness might not be due to a lack of spending on infrastructure.
One key infrastructure issue that has arisen since we prepared our last set of forecasts in September and October is the change in focus for transport spending under the new government. Although both National and Labour emphasised the need for investment in infrastructure, National’s attention was very clearly on roads, while the Labour-led coalition is more focused on rail and public transport.
Regional economic development is a high priority for the newly-formed coalition Government. Nothing highlights this more than returning MP, Minister for Regional Economic Development, and Minister for Infrastructure, Shane Jones being given a $1 billion per annum Regional Development (Provincial Growth) Fund.
The Labour-NZ First coalition has earmarked $1 billion per annum for regional development. Strong business cases will be needed by local authorities vying for a slice of these funds. Don’t over-rely on GDP in these business cases.
A sense of intrigue prompted David Kennedy to visit Panama City – an oasis of wealth and success in Central America. He was vaguely aware of its economic and historic importance: it is a metropolis of futuristic skyscrapers, an airline hub, a tax haven, a financial hub, a nexus of global trade, and a United States outpost of sorts. He knew that all these attributes related, in one way or another, to the Panama Canal.