12 Feb 2009

Government reveals measures to stimulate economy

9:29 am on 12 February 2009

Five schools and 69 state houses will be built and five large state-highway projects fast-tracked under the Government's infrastructure package announced on Wednesday.

The Government unveiled details of the package, worth about $500 million at Parliament.

Funding already allocated for the projects has been brought forward in an attempt to stimulate the economy.

Education spending of $216.7 million will be used to build five new schools, refurbish existing ones and improve broadband access.

Of this, $68.7 million will go towards the new schools: Mt Wellington Primary, Kerikeri Primary, Hingaia Primary and Papamoa Primary and Secondary schools.

Another $30 million will be used to refurbish administration buildings, halls and libraries at 65 schools. There will be $34 million for schools to upgrade information technology, including better broadband services.

In transport, $142.5 million will be spent on five large state highway projects and a range of smaller, regional projects.

The state highway projects are: the Kopu Bridge replacement in Waikato, the Matahorua Gorge Realignment and the Hawke's Bay Expressway Southern Extension, Muldoon's (Rimutaka Corner Easing) and the Christchurch Southern Motorway.

Housing New Zealand will receive $124.5 million, including $104 million to upgrade 10,000 existing houses over the next few months.

Sixty-nine new state houses will be built over the next six months at a cost of $20 million.

The Government says the package is designed to create work around the country, for builders, plumbers and electricians, and have a flow-on effect to suppliers, sub-contractors and the wider community.

Finance Minister Bill English says no extra borrowing will be needed to fund the package. He says the money was allocated within the capital budget over the next three to four years and is simply being used sooner than previously planned.

Mr English said Wednesday's announced schemes and a wider $5 billion package could create 2,000 new jobs.

However, Opposition leader Phil Goff says the Government's package is only tinkering around the edges.

Mr Goff says while it will help to keep 2000 jobs, it is not a comprehensive plan to address rising unemployment. He says the funding will see only one new state house per electorate and the school funding is far from adequate.

'Good start'

Major industry groups have described the infrastructure package as a good start.

New Zealand Council for Infrastructure chief executive Stephen Selwood wants to see bigger infrastucture jobs brought forward in the next 12 months.

Among the projects the council would like to see fast-tracked is the provision of new transmission lines for Auckland's debilitated power supply.

Local Government New Zealand says the package is a pragmatic and prudent approach in difficult economic conditions.

The Northern Employers and Manufacturers Association says the spread of projects around the country will provide a much needed boost to construction businesses already suffering in the difficult climate. However it, too, says more is needed.

School Trustees Association general manager Ray Newport welcomed the fast tracking of property work in many schools, but says it would have been good to see the money split between capital works and day-to-day operational funding.

Boost for regions

Thames-Coromandel mayor Philippa Barriball says the decision to bring forward the building of the new Kopu Bridge is the best news the region could have.

A large volume of traffic uses the existing one-lane bridge on State Highway 25 south of Thames during holiday periods, causing huge delays. The $32 million project to replace the bridge will start in July, two years earlier than expected, which Ms Barriball describes as a fantastic investment in the community.

Hawke's Bay Regional Council says the decision to fast track re-construction of part of the highway between Napier and Gisborne will have a huge benefit.

A $40 million realignment through the Matahorua Gorge, about 50km north of Napier, will start in October. Chairperson Alan Dick says bypassing the narrow road through the gorge, which can often be closed due to falling rocks, is very important.

Christchurch mayor Bob Parker mayor said the city's southern motorway is vital for the Canterbury economy. He says sorting out what is, at the moment, a "roadblock" is a top priority and he welcomes the announcement.

Auckland mayor John Banks says the package has provided for the rest of New Zealand and he is looking forward to the Government's next move, with $1 billion needed for projects in the Auckland region.


Plans to build new state houses and the renovate existing ones have had a cautious welcome from advocates who say more work will needed in the long term.

The largest allocation of new state houses is for south Auckland, where 14 of the homes will be built.

While Manukau City mayor Len Brown welcomes the move, he wants to see more support for initiatives that address the city's social problems.

David Zussman of the Monte Cecilia House Trust, which provides safe temporary accommodation for families in a housing crisis, says a bigger response will be needed in the long term.