Budget Speech

The Budget Speech is the Budget Statement the Minister of Finance delivers at the start of Parliament's Budget debate. The Budget Statement generally focuses on the overall fiscal and economic position, the Government's policy priorities and how those priorities will be funded.

Budget Speech
Published: 30 May 2019
Also published on the Treasury website.

Budget Priorities, part 6

Mr Speaker,

So much of what New Zealand relies on for wellbeing is derived from the land. Changing the way we use our land can have significant benefits for the health of our waterways, contribute to our climate change goals and increase productivity.

The Wellbeing Budget provides more support for farmers and councils to make positive land use changes. A $229 million Sustainable Land Use Package will invest in projects to protect and restore at-risk waterways and wetlands and provide support for farmers and growers to use their land more sustainably.

The Budget provides support to address capability gaps and inconsistent practices across regions in relation to the development and implementation of freshwater rules. This includes improving consistency between councils, better compliance and enforcement, better engagement with Māori, and improving scientific knowledge to inform plan development.

Forestry plays a critical role in improving water quality, reducing carbon emissions and creating jobs. The Wellbeing Budget allocates over $49 million to help transform the forestry sector and support our One Billion Trees programme. Combined with existing funding, this equates to an investment of $58 million in Te Uru Rākau.

Foresters and landowners will have the support they need to increase the value they receive from wood and timber resources.

I want to congratulate the combined group of Ministers who worked together across portfolio and agency boundaries to bring this package forward.

Mr Speaker,

Rail has huge benefits for New Zealanders' wellbeing, including unlocking regional economic growth, reducing emissions and traffic congestion, and preventing deaths and injuries on our roads. The previous Government took a hands-off approach and left rail in a state of managed decline.

Today we begin to turn this around.

Budget 2019 invests more than $1 billion over the next two years in modernising KiwiRail. These are the first steps in implementing our Future of Rail programme. This includes $375 million for new wagons and locomotives, $331 million to invest in track and other supporting infrastructure, $300 million from the Provincial Growth Fund for regional rail and $35 million to begin the process of replacing current ferries that are nearing the end of their life.

Mr Speaker,

Alongside this investment in rail, this Budget makes other significant investments in our infrastructure.

One of New Zealand's greatest long-term economic challenges has been underinvestment in our crucial infrastructure.

We are committed to closing this infrastructure deficit.

Mr Speaker,

This year we have shifted to a rolling multi-year capital allowance. In the past, Governments have set a single-year capital allowance for the coming year.

This approach has meant trade-offs were made between initiatives submitted in a single year, rather than based on a medium or long-term view of likely capital requirements.

The multi-year capital allowance allows the Government to make better long-term investment decisions and provide greater clarity for the construction sector. We have established the New Zealand Infrastructure Commission, Te Waihanga, funded through this Budget. Its job includes producing an infrastructure pipeline and developing a 30-year strategy to provide certainty about the long-term infrastructure requirements of New Zealand.

Mr Speaker,

The Wellbeing Budget, for the first time, makes a multi-year commitment to building new schools and classrooms by setting aside $1.2 billion funding for the first waves of a 10-year School Property Programme.

Budget 2019 allocates $286.8 million in capital for the first wave of investment to build the new schools and classrooms referenced above. A traditional Budget would have stopped there, leaving uncertainty about what funding would be made available in future Budgets.

The multi-year capital allowance means we can now plan further ahead. An additional $913.3 million is being set aside in this Budget to allow the Ministry of Education, as well as schools and communities, to better plan for growth over the next 10 years.

This is the largest ever investment in school property by a New Zealand Government.

Mr Speaker,

Last year, DHBs reported that about 19 per cent of their assets were in poor or very poor condition. The current Government inherited issues with earthquake-prone hospitals, asbestos, leaky roofs and buildings that have simply come to the end of their useful life.

That's why Budget 2019 includes two years of capital funding for health: $850 million for 2019/20 and a further $850 million for 2020/21. On top of the $750 million invested last year, we are delivering on fixing our hospitals.

In addition, the Coalition Government has committed to the rebuild of Dunedin Hospital. Budget 2019 sets aside the money for the rebuild, which will be allocated over the life of the project.

These crucial investments in our schools and hospitals are the central components to the Government's infrastructure package in Budget 2019. In addition the Budget contains a host of investments that support the provision of critical public services and provides for new programmes across portfolios, that I do not have time to fully outline today.

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