Budget

Transport spend-up, housing flat

Housing and Transport Minister has had a mixed budget, with no major new funding in the housing portfolio balanced by $2.1 billion in capital spending allocated in the transport portfolio.

The Housing and Urban Development agency has received just $363.9 million in new operating spending, and $140.1 million more capital spending in this budget.

The picture in transport is slightly better with $48.5 million in new operating spending and $2.1 billion in new capital spending.

Operating spending is used to fund  programmes, while capital spending is used to fund physical infrastructure.

Major initiatives include a project to end chronic homelessness by funding Housing First’s expansion to 2,700 places. That initiative is jointly funded with money from the vote for social development.

Other, smaller initiatives like a project to support Pacific households into home ownership gets a paltry $2.5 million. The project won’t actually provide funding for homes themselves, but “targeted financial capability services” which are designed to help Pacific families save for a deposit and get on the housing ladder.

Other big spends include $18.9 million to expand a program that helps tenants maintain their leases.

Twyford’s housing portfolio was a recipient of major spending in the previous Budget delivered by the current Government. A 2017 mini-budget kickstarted KiwiBuild with billions of capital investment, and last year's Budget allowed Housing New Zealand to lift its borrowing by $2.9 billion to build 1,600 homes a year for the next four years.

Twyford had previously indicated KiwiBuild would receive no new money and additional funding for Housing First places had already been announced. His housing portfolio is still cashed-up from big funding announcements last year (funding in budgets is allocated over four years). The lack of any new big-ticket spend suggests the government is shifting its attention from his beleaguered housing portfolio.

The picture in transport is much better.

The bulk of transport funding comes from the NZ Transport Agency’s land transport fund, which is not allocated at Budget time.

But KiwiRail received a $1 billion boost, and the Auckland City Rail Link was given $1.4 billion of new funding, which fully funds the Government’s share of the project, including it’s share of the cost blow-out.

The big rail spend is probably indicative of one of the areas where the three parties of the current Government cooperate most. Twyford is assisted in the portfolio with associate Transport Ministers Julie-Ann Genter and Shane Jones, from the Greens and New Zealand First.

With the Greens keen to reduce transport emissions and New Zealand First wanting to invest in the regions, increased spend on rail was something of a foregone conclusion.

The landmark transport strategy, the Government Policy Statement, which was released last year indicated it was moving to a mode-neutral approach to transport spending. That means bids for road funding would be analysed alongside those for rail and sea services. It signalled a pivot away from a bias towards spending on roads.

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