Schools, roads and home insulation head stimulus package

By Pattrick Smellie

Wednesday 11th February 2009

The NZ Government's $500 million fiscal stimulus will start to kick in immediately, with up to $100 million worth of the earmarked projects under way by June, Prime Minister John Key announced today.

Equivalent to approximately 0.5% of GDP, the $483.7 million package includes:

$216.7 million on five new schools, extensive school refurbishments, and ICT infrastructure improvements;

$142.5 million on transport projects covering five state highway and a range of regional highway projects;

$124.5 million for Housing New Zealand state house refurbishment and new build.

Infrastructure Minister Bill English said this was "just the first announcement about bringing forward worthwhile projects that will help us through the current economic challenges and contribute to driving up New Zealand's long-term economic competitiveness".

In early reaction to the package, Goldman Sachs JB Were economist Shamubeel Eaqub welcomed the package as "small...but positive". It would "bolster the aggressive easing delivered by the RBNZ to date".

"However, more needs to be done and the Government has announced further measures will be delivered in the May Budget and we expect the RBNZ will continue aggressive efforts," said Eaqub.

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