By Alex Tarrant
The government has announced plans for NZ$93.7 million for a specified fund to clean up rivers and lakes over five years, including NZ$15 million extra than already earmarked for the process, while considering the creation a NZ$400 million fund for irrigation schemes to help farmers which could be introduced in 2013/14.
The Ministry for the Environment will bring together NZ$78.7 million in existing funding over five years for cleaning waterways, and add NZ$15 million in the next two years to create a fresh-water cleanup fund worth NZ$93.7 million over the next five years, Minister for the Environment Nick Smith said. A government release says government is looking to spend NZ$264.8 million "including out years" on its total plan to clean up waterways.
The cleanup fund initiative brought together a number of one-off clean-ups in Waikato, Rotorua and Taupo into the Fresh Start for Fresh Water Programme, Smith said.
Meanwhile, NZ$35 million will be allocated over five years to support development of irrigation infrastructure proposals, Minister of Agriculture David Carter said. Government would consider creating a NZ$400 million fund for equity investment for the construction of regional-scale irrigation schemes to encourage third-party investment in the area.
Funding of the NZ$400 million investment vehicle had not been finalised, but it was expected to be available from 2013/2014, Carter said. Prime Minister John Key said he expected the 2013/14 budget to include the infrastructure capital investment plan.
"The NZ$35 million is to put those schemes in the position where they can come with the feasibility study done and be ready to invest in. There’s no question when they’re at that point, in my view, the NZ$400 million will ultimately be invested in those schemes, because the economic payback for New Zealand’s enormous," Key said.
It was Key’s view the NZ$400 million would be there.
“We would anticipate it starting in Budget 2013/14. It’s over a period of time, we’ll build it into our capital budgets at that point," he said.
Government would look to invest in minority stakes in infrastructure projects with the fund, Carter said.
The expanded irrigation fund would support the development of new water harvesting, storage and distribution infrastructure.
'Need for better irrigation'
Budget 2011 would allocate NZ$35 million over five years for the Irrigation Acceleration Fund, to support the development of irrigation infrastructure proposals to the ‘investment-ready’ prospectus stage, Carter said. The NZ$35 million would be reallocated from within the Ministry of Agriculture budget, Carter said.
"The expanded fund is the first stage of the process; for the second stage, the Government will consider in a future Budget investing up to NZ$400 million of equity in the construction of regional-scale schemes to encourage third-party capital investment," Carter said.
"The Crown will be a minority partner, investing on commercial terms, to give confidence to capital markets to invest in large scale irrigation schemes," he said.
“Well-designed storage and irrigation infrastructure has the potential to deliver significant, sustainable economic growth. Developing irrigation has huge potential to unlock economic growth and prosperity for our primary sectors and, by extension, for all New Zealanders.”
NZIER research suggests the fund could support 340,000ha of new irrigation, which could boost exports by NZ$1.4 billion a year by 2018, rising to NZ$4 billion a year by 2026, Carter said.
“These initiatives represent a major step in unlocking significant economic potential for New Zealand, having our tradeable sectors growing strongly and delivering on the Government’s economic growth goals,” he said.
(Updates with Key comments, tidies up head, first paras, clarity on amounts to be spent)