Government to borrow more, boosting spending on ‘infrastructure’

Minister of Finance Grant Robertson has announced that the Government will take advantage of low interest rates and borrow more so they can increase spending in infrastructure. Details will come later.

RNZ: Government signals big new infrastructure spend, looser purse strings

Finance Minister Grant Robertson flagged extra spending in his speech to the Labour Party’s annual conference in Whanganui.

He said Cabinet had committed to a boost to infrastructure as part of the short to medium term spending plan.

“We are currently finalising the specific projects that the package will fund but I can tell you this – it will be significant.”

The government had heeded the calls from the construction industry for “greater certainty” about the pipeline of transport projects from 18 months’ time, he said.

“We will give that certainty”.

It made sense to take advantage of low government debt and the very low cost of borrowing, said Mr Robertson.

“Right now, we can borrow at an interest rate of 1.3 percent for ten years. Just think about that for a minute – when we came in to office, this was up at 3 percent,” he told delegates.

“We have the lowest borrowing costs in New Zealand’s history, so it is time to invest.”

There will be no details until the next update on the government books – the Half Year Economic and Fiscal Update on December 11 – when Mr Robertson will release more details about the areas of spending, and the price tag.

Greens are keen (they have been wanting this for some time):

It should give the economy a good boost for election year. A first term Government overseeing and stimulating a thriving economy will be hard to defeat.

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9 Comments

  1. Duker

     /  30th November 2019

    1.3% for 10 years, yet the Crown Capital charge that Treasury levies on all government bodies on the cost of any assets is between 7 to 8%. ( They are very secretive about the amount) . This particularly hits DHBs hard when they commission new and expensive facilities , a new hospital of any size can run between $700- $1 bill. A new mental health building can be $150 mill plus. No wonder they are said to be running at a bookkeeping loss when depreciation is included as well as returning large amounts of cash to Treasury.

    Reply
  2. Reply
  3. Blazer

     /  30th November 2019

    Wonderful news…for all NZ.ers!

    Reply
    • Kitty Catkin

       /  1st December 2019

      More debt ! Just what I wanted !

      Reply
      • Blazer

         /  1st December 2019

        In just 9 years the Natz borrowed more than the cumulative total of ALL prior NZ Govts!

        Reply
        • Corky

           /  1st December 2019

          Why was that?

          Reply
          • Duker

             /  1st December 2019

            Because they could .. they had tax cuts funded by borrowing, they were still borrowing large amounts once the economy was growing …
            Cullens Super fund grew so much ( now $40 bill) they could use that as collateral as the money markets were looking at NETT DEBT, not total debt.
            Key was always a big debt man, English not so much. Guess who won ?

            Reply
  4. Corky

     /  30th November 2019

    ”It should give the economy a good boost for election year. A first term Government overseeing and stimulating a thriving economy will be hard to defeat.”

    Labour has the upper hand…unless things suddenly start going wrong for them.

    Talking of Labour’s conference…why did they go and ruin it by putting Nanaia Mahuta on stage? And have Kelvin Davis talk? While the Labour faithful may lap that up, it doesn’t look to good for people looking in. Labour have cleared the ferals out. And many of the woman now wear makeup. But they still have some lessons to learn about presentation.

    Reply

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