The Kākā by Bernard Hickey
The day our infrastructure deficits came home to roost

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The day our infrastructure deficits came home to roost

Wellington set for 10-15 years of buses replacing trains with Kiwirail's $5b-plus repair bill unfunded; Minister halts work on 350 school rebuilds to check 'value for money' & 'priorities'
Ugly moments of infrastructure deficit truth are popping up all over, including the revelation that Wellington’s train service will be disrupted for up to 15 years. Photo: Lynn Grieveson / The Kākā

TL;DR: National and Labour are bickering over who is to blame for ‘mismanagement’ of infrastructure spending on rail and school building maintenance and upgrades, but the real culprit is 30 years of underinvestment to ensure the Government’s spending lid will always sink back to 30% of GDP, plus create room for income tax cuts.

The only way the numbers could add up in the short term was to keep population growth pulsing through the economy and straight through into central Government’s coffers. In the long run, the nakedness of the underinvestment was always going to be exposed by infrastructure breakages and collapses, at some point in the future.

Yesterday, that point arrived with a vengeance. Hard of the heels of months of commuter rail hell in Auckland, Wellington rail commuters were told they face 10 to 15 years of having to use bus replacements to allow KiwiRail space for over $5 billion of repairs, none of which is funded.

And the new Government felt it had to suspend work on 350 school building, repair, merger and expansion projects to ensure the lid kept sinking back to 30% of GDP, with enough room for tax cuts to be delivered in the May Budget.

Elsewhere in our political economy at 9 am:

  • Third-party campaign groups such as the Taxpayers Union and Groundswell spent over $2 million in the 2023 election campaign, mostly supporting right-wing parties and at a rate 13 times greater than in 2020. RNZ Farah Hancock

  • Wellington Water admitted it had not consistently been fluoridating water in Lower Hutt and Wellington since October 2023 without directly informing residents. The Post-$$$ Erin Gourley

  • Health officials urged the government to retain key aspects of the smokefree law it plans to repeal, confidential briefings to Associate Health Minister Casey Costello reveal. RNZ Guyon Espiner

(Paying subscribers can see more detail, analysis and charts below the paywall fold and hear my analysis in the podcast above. I’ll open it up for public consumption and sharing if we get over 100 likes and paying subscribers ask for it to be opened in the comments.)

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