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.