National Party pledges consolidation of several existing entities into a national infrastructure "bank" to provide finance and advice for central and local government infrastructure projects

National Party pledges consolidation of several existing entities into a national infrastructure "bank" to provide finance and advice for central and local government infrastructure projects

The National Party is pledging to establish a national infrastructure "bank" to provide finance and advice to central and local government infrastructure projects by consolidating several existing entities.

National says the National Infrastructure Bank would take an inter-generational, long term approach to the financing of infrastructure in New Zealand. It would employ professionals with valuable technical, legal, financial and economic appraisal skills, lifting the quality of engagement in the infrastructure sector, the party says.

National's plan would consolidate Crown Infrastructure Partners, Green Investment Finance, Residual holdings at Crown Irrigation Investments Ltd, loans made by the Provincial Growth Fund, and other loan portfolios across the Crown balance sheet "where appropriate." Final design of the entity would be completed by a new National Government drawing upon Treasury advice and private sector expertise, National says.

The entity would help ensure the Crown receives value for money from its infrastructure finance structures, National says, and provide an opportunity for institutional investors such as the ACC, NZ Super Fund, iwi, KiwiSaver providers and Australian pension funds to invest in NZ infrastructure assets.

“A key part of National’s plan to deal with the current economic and jobs crisis is to deliver world-class infrastructure that grows our economy and to gets Kiwis back to work," National Party leader Judith Collins says. “To do that we have to invest, and every dollar borrowed must be spent wisely on projects that improve our economy and build productivity.”

The entity could undertake several roles, National says including:
• Funding new infrastructure projects for the Crown and local Government.
• Providing opportunities for institutional investors and iwi to invest in financing long term infrastructure assets.
• Developing a portfolio approach to managing infrastructure debt and associated risks, in association with the Treasury.
• Providing advice and expertise to the Crown on financing models for infrastructure.
• Ensuring the Crown receives value for money from its infrastructure finance structures.
• Actively monitoring the debt portfolio and recycling funds over time.
• Developing and implementing commercial models that unlock co-investment with the private sector and taking over co-ordination of the NZ public private partnership programme.
• Developing tools and alternative funding models to advance the development of infrastructure to support the New Zealand economy.
• Act, as required, to independently assess infrastructure proposals prior to financing.

Projects the entity could support include:

• Development of new three waters infrastructure, including funding local Government finance.
• Financing new toll roads through long term bond finance in collaboration with NZTA.
• Supporting funding for green investment projects.
• Financing water storage projects.
• Supporting co-funding models for social infrastructure such as schools.
• Helping local Government unlock housing and commercial development with loans tied to targeted rates and development contributions.

 The entity would be governed by an independent board and hold "a nominal amount" of equity capital, provided by the Government.

"Existing capital from organisations such as Green Investment Finance would also be re-allocated to the Bank. These equity contributions can be used to leverage capital raised in national and international bond markets. The Bank would undertake borrowing from debt markets and arrange further funding from institutional investors. International insurance companies and pension funds are particularly attracted to long dated, 30-50 year, bond issues as could be undertaken by the Bank," National says.

The policy is here.

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16 Comments

Finally we have a party putting some "meaty" proposals forward. An Infrastructure Bank as described would be quite a gamechanger, especially if coupled with Infra Bonds. Putting a commercial focus and investment discipline in to some of the current projects wallowing in ineptitude and incompetent management has been long overdue. A good idea imo.

Many countries like India have been doing this. They also raise funds from the public at a slightly higher rate, with full guarantee of the safety of the funds. Smart policy announcement by National. Long time coming though.

Good article - p--- poor ideas though (if you could call them that). Long on rhetoric, with the usual culprit spin-words: infrastructure (mostly means roads, they're made from and by fossil fuel-stocks), productivity (which folk STILL regard as labour as per Adam Smith - nowadays it's? Fossil fuel-stocks) and 'economy' (which is really a lot of activity - already being done at a rate we cannot maintain).

The trouble is that as the future (which is increasingly de-growth, this being a finite planet and we being about half-way through it) won't supply the business-case. 'Return' will be increasingly 'of my money' rather than 'from my money'. So really, we're looking at a blast from the past. Sort of reminds me of the DFC thinking back in the 'sixties'.

Always so optimistic and "glass half full" aren't you?. If you'd admit that people will continue to drive to work and continue to live in houses connected to services then maybe you might admit this isn't a bad idea. Last time I looked the mungbean eating, sackcloth wearing unwashed unkempt and rather smelly brigade weren't really getting much of a foothold in modern society.. thankfully

Better to say nothing, and be thought a fool.......

Modern society was a temporary, ignorant, arrogant draw-down of a finite planet. It should have been obvious; our ancestors had to go to the other side of it a long time ago. Should have rung alarm bells.

https://royalsoc.org.au/images/pdf/journal/152-1-Turner.pdf
I though the conclusion somewhat amusing: "In light of the comprehensive evidence presented, the most rational course of action is to prepare as best as possible for a collapse of some nature. Ironically, if such preparations were broadly adopted, synergies with sustainable strategies might provide some hope of avoiding collapse"

But you advocate using a finite resource to facilitate the using of a finite resource. Brilliant.

"Better to say nothing, and be thought a fool......." actually couldn't have said it better PDK

You didn't bother reading the link, did you.

You see, I read everything. From all angles. Then think. Then come to a conclusion (or conclusions), and ensure they pass the first-principle test. Thus I read Nordhaus https://www.brookings.edu/wp-content/uploads/1992/06/1992b_bpea_nordhaus...

and laugh, this is Stavins: "In venturing this prediction, the Limits authors gave little attention, as Nordhaus notes, to the crucial roles played by exploration and discovery, technological progress, and substitution"

On a finite planet. Go figure. Good luck to you - I prefer to be informed.

And so humble

Yeah, DFC was the first thought I had as well.

I like this idea .. it's on the right track.

We will be triaging EXISTING infrastructure increasingly. And it is aging, unmaintainably, already (note the bleatings about roads).

Yet you think more is good?

Infrastructure is more than highways.. you should read the article.. perhaps twice and slowly

Infrastructure is 100% reliant on (finite) fossil energy. Infrastructure is 100% committed to the problems of entropy. And infrastructure is already overbuilt; as the US decay problem heralds for us. We can, indeed, choose to build some targeted stuff - probably energy-related - but mostly we will have to triage the existing. It's happening already with rural roads.

You're welcome to go live in the bush.

rural and coastal roads. And then there is all the aging infrastructure under existing roads. There's never a business proposition associated with repair and renewal - hence why we have such enormous problems in city councils, and signs regarding closure of beaches to swimming a regular blot on our landscape.

It is oxymoronic or just plain moronic, that we watch infrastructure pipes, seawalls, stopbanks, roadways and the like crumbling around us while promising 'new' stuff that we'll eventually be expected to maintain as well.

Well said. One of the reasons is that it's good publicity to be seen opening things and cutting ribbons, but not so much to allocate maintenance effort. The tendency is to patch things for your 3-year term. There was an attempt - over 30 years ago, from memory - to make LG fund for depreciation. But it didn't happen - as with everywhere, debt and the reduction of growth have screwed the scrum. https://oag.parliament.nz/1999/2nd-report/docs/part11.pdf

I liken it to juggling more and more balls - eventually you only take on more by dropping some already in action.

https://www.sciencedirect.com/science/article/pii/S0921800919310067