New Zealand Labour led government has become the first Western nation to prioritise wellbeing over economic growth in a groundbreaking national budget released by the country’s Treasury.
Alongside more support for addressing mental health issues and child poverty in the country, the budget cited the climate challenge as one of its key priroities.
The budget earmarks NZ$229m for ‘productive and sustainable land use’, a NZ$2bn capital investment in the country’s rail network, and promises to inject NZ$80m operating and NZ$15m capital funding into science and research on climate change and new energy technologies.
“As an outward facing export nation the risks to New Zealand from climate change cannot be underestimated,” said Prime Minister Jacinda Ardern.
“More frequent and intense weather events will affect the country’s agricultural and horticultural sectors, with flow-on implications for exports and the economy as a whole.”
“The transition to a low-carbon economy will take time and Budget 2019 is an important step,” she said.
A new NZ$300 million venture capital fund will support early stage companies. There is an additional NZ$157 million of direct support to businesses to develop high-value, low-emissions products.
It appears these are on top of the NZ$100 million Green Investment Fund established last year and due to launch shortly.
Last year’s budget also moved NZ$657 million from a grant scheme into an estimated NZ$1 billion research and development tax incentive.
Since this kicked in only in April 2019, it’s too soon to tell if it is having an effect.
However, research and development is certainly on the right track in New Zealand.
Over the five years between 2014 and 2018, spending has grown 38 per cent in real terms to reach 1.37 per cent of GDP.
The target is two per cent of GDP by 2027.
Notably, the lion’s share of the increase has been from business, not state, investment.
Studies have shown that disruptive innovation emerges when small start-ups and grassroots enterprises are given resources to pilot concepts, learn, adjust and scale up.
Rail gets a major boost with NZ$1 billion in investment for Kiwirail.
Rail suffered under privatisation from 1993 to 2008, but even since renationalisation it has not had a dedicated funding line like roads do.
Some passenger services entered the National Land Transport Plan in 2018, but not yet freight.
This investment will bring much-needed new rolling stock, track improvements and new ferries for the critical link between islands.
Rail carries 15 per cent of New Zealand’s freight and growth has the potential to reduce emissions and make roads safer.
The investment includes NZ$300 million from the Provincial Growth Fund for regional rail initiatives.
This could include a proposal for regional rapid rail linking Auckland with other centres in the north of the country, or investment for the beleaguered commuter lines linking the capital with surrounding regions.
It could also go towards an upgrade of the partly mothballed rail link north of Auckland.
Further electrification of the network, hinted at last year by Climate Change Minister James Shaw, is not in the budget, but at least the existing electrified section is saved.
Research into agricultural greenhouse gases, the only area in which the New Zealand government funds research overseas, continues.
There is money to set up and run a climate change commission.
There is also money for policy advice on a “just transition to a low?emissions economy”, but there’s nothing that will specifically reduce emissions in the coming year.
Electric vehicle proponents, alarmed by the growth in transport emissions (up 82 per cent% since 1990, and up six per cent in 2017 alone) and stagnant EV sales and encouraged by hints last year about coming incentives, will be disappointed.
But the long-term strategy remains in place, with a focus on passing the zero carbon bill, currently open for submissions, with bipartisan support this year.
The big winner in environment and climate funding in this budget is agriculture. NZ$229 million is going towards cleaning up waterways and improving wetlands and sustainable farming.
Much of this will go directly to farmers.
Freshwater quality was a key issue in the 2017 election.
Agricultural intensification, especially dairy farming, is the main reason for the continuing decline in water quality in rivers and lakes.
A further NZ$184 million goes towards the One Billion Trees Program, currently on track and a key part of the present plan to lower net emissions.
EcoNews is an independent publication that relies on contributions from its readers.
WE’RE BUILDING A PLATFORM WITH A CLEAR FOCUS ON THE ENVIRONMENT, CULTURAL AND SOCIAL GOOD. CONTRIBUTE AND TOGETHER WE CAN MAKE AN IMPACT.
