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Govt splurges on big ticket items

NZ Newswire logoNZ Newswire 25/05/2017

The government will splurge billions more in the coming year on roads, rail, military projects, schools and more prison space.

"This $4 billion investment is the single biggest investment of new capital in one budget by any government in decades," Finance Minister Steven Joyce said when announcing his first budget, for the 2017-18 year, on Thursday.

A further $7b has been ear-marked for capital projects in the next three budgets, bringing infrastructure spending to $32.5b over four years.

"Which is a 40 per cent increase on the last four years," Mr Joyce said.

The single biggest new spending item has been forced on the government. Last year's Kaikoura earthquake, which destroyed large stretches of State Highway 1 and the rail line north and south of the town, means it will spend $812 million on restoring the road.

The next biggest item is $763m, over four years, for new prison capacity despite also spending millions on efforts to keep people on the straight and narrow.

KiwiRail will get $450m over two years, despite threats in the past it wouldn't get any hand-outs because of its poor performance.

Transport Minister Simon Bridges says it has become more efficient and productive despite the Kaikoura quake and a fire which closed the Christchurch-West Coast line.

The government wanted a sustainable rail network, but in the coming year it would review KiwiRail's operations and how much cash it would need, he said.

New capital spending in the budget:

*$812m for SH1 around Kaikoura

*$576m for the Defence Force, over four years, $300m for a new navy ship, and upgrading military bases, the air force's Orions and other military hardware

*$450m for KiwiRail, over two years

*$436m for the first stage of Auckland's City Rail Link

*$392m for six new schools, two school expansions, 11 special education units and 305 more classrooms

*$98m for Wellington's commuter rail network.

In the next four years the government will spend $9.17b on the country's major roads, adding 540km of state highway lanes.

That includes a number of big projects in Auckland, the Waikato Expressway and Transmission Gully north of Wellington.

Mr Bridges says the Roads of National Significance programme is still a key focus of spending - aimed at linking major cities with the regions and export sectors with ports.

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