Budget 2021 includes investment in infrastructure

Finance Minister Grant Robertson has delivered his Wellbeing Budget 2021: Securing our Recovery. The focus of spending was on improving the well-being of the lowest income New Zealanders and the Government’s priorities, including accelerating the recovery and rebuild from the impacts of COVID-19, laying the foundations for the future, and addressing climate change.

With infrastructure sitting at the core of the Government’s economic recovery plan, this is good news for the construction sector, although fair questions have been raised as to whether what has been committed is enough to turn the dial on our large infrastructure deficit and meet our ambitious goals.

We’ve summed up some of the specific announcements that might interest you below.

Infrastructure investment

The Budget has signalled a $4 billion boost to the capital allowance for infrastructure development, bringing the four-year total to $57.3b from 2021 to 2025. The extra funding will support investment in roads, public transport, schools, hospitals, housing, and climate change mitigation.

An additional allowance of $296m has been allocated to fund the cost of the creation of regional entities (probably four of them) to take control of Three Waters.

Funding for rail infrastructure

The Government has committed $1.3b to the revitalisation of rail facilities around the country.

Investment has been earmarked for:

  • Construction of a wagon assembly facility at Hillside, Dunedin, to create dozens of permanent local jobs.
  • Building 60 new trains and 1,900 new wagons – 1,500 of the wagons will be assembled at Hillside.
  • The construction of a new South Island Mechanical Maintenance Hub at Waltham, Christchurch, will create 300 construction jobs.
  • New IT systems, maintenance and renewals across KiwiRail’s 3,700 km rail network will create 150 jobs and improve safety.

The funding breakdown:

  • $722.7 million to continue the commitment to replace locomotives and wagons
  • $449.9 million to support investment in track and supporting infrastructure
  • $87.3 million to support essential maintenance of KiwiRail’s existing assets such as locomotives, wagons, ferries, and IT
  • $85 million to develop domestic rail workshops at Hillside in Dunedin.

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Building homes for Māori

The Government has committed $380 million to deliver 1,000 new homes for Māori, including papakāinga housing, repairs to about 700 Māori-owned homes and expanding support services.

The package includes:

  • 1,000 additional new houses that will be a range of papakāinga housing, affordable rentals, transitional housing, and owner-occupied housing
  • repairs for 700 Māori-owned houses improving the quality of homes for whānau in most need, led by Te Puni Kōkiri
  • $30 million towards building future capability for iwi and Māori groups to accelerate housing projects and a range of support services.

$350 million from the Housing Acceleration Fund will be targeted to invest in infrastructure to support Māori and iwi providers build homes for whānau Māori.

The Government expects these initiatives to pave the way for at least 2700 new houses.

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Warmer homes

The Budget includes funding to make 47,700 kiwi homes warmer with insulation and heating retrofits.

An estimated 28,000 children have potentially avoidable hospitalisations each year that are linked to cold, damp and mouldy houses.

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Rebuilding Scott Base

Scott Base will be redeveloped which will create hundreds of jobs.

The Government says 170 jobs will be created at the peak of the construction with more than 700 jobs over six years. The Canterbury region will be the big winner of the job front with design, construction, logistic and project management roles to be created.


RMA implementation

The Government is investing $131.8 million in the design, enactment, transition, and initial implementation of RMA reforms through to mid-2024. 

The reforms are expected to enhance housing supply and economic development while protecting the environment.

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Supporting Kiwis into jobs

The Training Incentive Allowance will return with $127m to be invested over four years to support people into jobs.

It is expected to help around 16,000 people to retrain, gain higher skills and transition into new careers.

This includes approximately 5,750 Māori and 1,400 Pacific people.

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Employment and training

$279.5 million has been committed in support of vocational education organisations.

Funding in 2022 will be allocated in two ways:

  • increasing funding rates for apprentices and industry training by five per cent, to better align the funding rates for work-integrated learning with the rates for provider-based training, ahead of the transition to the new unified funding system
  • improving the fairness and reach of Equity Funding, which supports tertiary education organisations to improve access, participation, and achievement of Māori and Pacific learners, and disabled learners.

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