Budget eases some local infrastructure pain – but stronger medicine is needed

30 May 2024

Councils will see some relief from the huge infrastructure challenge they’re facing right now in the Government’s Budget, LGNZ Vice-President Campbell Barry said today.

However, big questions remain about long-term funding and financing of local government.

“We’re encouraged to see the new Regional Infrastructure Fund will support co-investment with councils, which LGNZ has called for,” Campbell Barry said.

“Communities see better outcomes when the Crown and local government work together to deliver essential infrastructure.

“We’re also pleased to see the Budget deliver on a proposal from regional councils for co-investment in critical flood protection. This means 42 shovel-ready projects have got the green light, and an additional $98.9m is set aside for future projects.

“Flood-protection investments like this have a massive return on investment. For example, a stop bank upgrade in Taradale cost $4m but prevented $7.6b of damage to nearly 10,000 homes and infrastructure by Cyclone Gabrielle.

“LGNZ also welcomes the additional $7 billion set aside for future infrastructure investment. We need a sizeable proportion of this going into local communities to help relieve the pressures they’re facing – including through city and regional deals.

“LGNZ’s City and Regional deals framework, released last week, supports the conversation about delivering better infrastructure in our communities. We look forward to working closely with the new National Infrastructure Agency on these deals, as signalled in the Budget.

Recovering from severe weather events

“LGNZ welcomes the much-needed, on-going investment in communities struggling to rebuild from the devastating effects of severe weather events.

“Today’s additional funding for repairs to our local roading network is overdue and critical to keeping communities moving.

“Specific increases in funding for affected areas on woody debris and sediment will also be some welcome relief.

Hope for more co-investment in future

“But with 25% of all infrastructure in local governments hands – and only 8% of the total tax and rates revenue – today’s budget needed to go further in supporting local councils and communities.

“We are disappointed there’s no commitment in this Budget to sharing GST on new builds with councils, to help with the cost of growth.

“However, Budget documents do signal that this and other housing growth incentives are on the way, and we are ready to work with the Government on this.

“Local and Central Government must continue to collaborative on the huge infrastructure challenges ahead,” Campbell Barry said.