It sounds good: $483.7m of publicly funded infrastructure projects (housing transport and education) are being fast-tracked to boost the Govt’s economic stimulus programme. How much more such capital investment is needed is arguable, but if money is the lifeblood of the economy, and farming the backbone, then infrastructure is the alimentary canal and plenty of it is needed for robust growth (which partly explains why we have none). The 2007 Shand report, reviewing NZ’s rating system, reckoned infrastructure spending required by local bodies could total around $30bn over 10 years. This suggests we have a serious backlog of work to bring the economy up to speed. We can argue the toss over priorities, but it’s not just building roads in Auckland – it extends around NZ to water, sewage, drainage, footpaths, roads, public transport, communications, and (after the latest power failure in Auckland) energy. The market won’t do its part without arm-twisting; private-sector spending and public (both central and local Govt) is needed.

Why Not Faster? John Key says the projects announced yesterday will get under way “quickly – in many cases in the next few months.” But only $100m of the projects will start before June 30. Why not today, if (as he says) they are quality projects which will make lasting contributions to our economy, are ready to go, will employ people as jobs elsewhere disappear, and create work for businesses in regions? Even so, plaudits came from left (the CTU’s Peter Conway says it is exactly what’s needed at this time) and right (Wellington Chamber of Commerce CEO Charles Finny says it’s an excellent way to provide fiscal stimulus without jeopardising the Govt fiscal position longer term).

Govt Spending Still Needs Pruning. But while these capital investments are being welcomed (and we trust they have been well chosen for their economic benefits), we should not forget about the operating spending which needs lopping. The Govt must move fast to eliminate mis-spending and waste to ensure against a widening of its deficits and an exacerbation of threats to our debt and credit rating. It could start by reviewing the value of agencies set up to promote the interests of (say) women, racing, children, sport and war veterans. Then there are the zealots who spend big bucks fostering someone’s idea of better behaviour by urging us to be more energy-efficient, more environmentally sustainable, less obese, more abstemious – and so on. They’re on our fiscal list, and we’re sure they won’t be missed.

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