Budget 2024: Government accidentally reveals it is considering axing $6b infrastructure plan

Finance Minister Nicola Willis received advice on disestablishing the National Resilience Plan, a $6 billion scheme set up after Cyclone Gabrielle and the Auckland floods to fund “strategic investments” in “building back better” from last year’s devastating storms.

It appears a proposal to wrap up the plan and reallocate its funding was under consideration in the forthcoming Budget. Whether the Government follows through on the idea will probably be known by May 30, Budget Day.

The final decisions on the Budget are yet to be taken but, if the idea were included in the Budget, this would be a rare instance of a Government accidentally dropping a big hint weeks ahead of Budget Day.

The National Resilience Plan was created by former Finance Minister Grant Robertson in last year’s Budget. A press release promised it would “include future-proofing road, rail and local infrastructure wiped out by the extreme weather, as well as telecommunications and electricity transmission infrastructure”.

Usually, Budget ideas are marked “Budget Sensitive” and kept out of the public eye. However, this time the Government accidentally released the name of a Treasury paper revealing that it received advice on wrapping up the plan in February.

The Treasury’s regular release of titles of advice received by the Minister of Finance revealed that, in February, Willis received a paper on “Discontinuation of the National Resilience Plan”.

The Herald asked Willis why she had sought advice on axing the plan.

“The name of this report has been released in error,” she said. The report was “advice only”.

“[A]ny actions resulting from it would require Cabinet approval.

“We will make further announcements on this at the Budget and in the coming weeks.”

The Government remained “committed to rebuilding critical infrastructure damaged by the severe North Island weather events last year and to delivering infrastructure to improve the resilience of New Zealand regions, cities and towns”.

“Almost $2.8 billion has been allocated from this fund in support of those goals,” she said.

“Almost 15 months on from these events, we have taken a range of advice on the best mechanisms for delivering additional investments in projects designed to support ongoing recovery and resilience. This includes ensuring all potential projects are subject to appropriate scrutiny, including development of costings and business cases.”

While $2.8b has already been allocated, meaning those projects are likely to get their money and be completed, there are question marks over what will happen to the remaining $3.2b.

The Government is working out how it wants to establish a new Infrastructure Agency. It is also creating a new Provincial Growth Fund in the form of the $1.2b Regional Infrastructure Fund, part of the coalition agreement between NZ First and National.

Labour finance spokeswoman Barbara Edmonds said homeowners and councils needed certainty about the plan’s future.

“Without knowing the full information around [the Government’s] plan, my gut feeling from this is, ‘Where does this leave me if I were in their shoes?’” Edmonds said, referring to those people in regions needing critical, resilient infrastructure.

The resilience plan and accompanying infrastructure plan created by the last Government created certainty for affected regions, she said.

“This creates a huge amount of uncertainty. Where does that leave ratepayers, especially as councils are going through Long-Term Plans?

“It takes us backwards because we’re starting again from square one.”

Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.