Prime Minister Chris Hipkins discusses Budget, cost of living with Tauranga business community

Prime Minister Chris Hipkins says New Zealand needs to “rethink” how roading infrastructure is funded.

In answer to a question from a Western Bay of Plenty economic leader at a Tauranga Business Chamber luncheon yesterday, Hipkins said it was “no secret” the roading environment was a “challenging” one for investment.

“We’re going to have to rethink as a country how we fund that,” Hipkins said.

“The fastest way to increase investment in roading would be to increase petrol taxes much faster than we are at the moment.

“With international petrol prices being at the level that they’re at, I’m not sure that that’s the sustainable way of doing it.”

Hipkins said as more electric vehicles entered the market, it was likely revenue from petrol taxes would decline.

“Because of the fast uptake of electric vehicles, we’re going to have to grapple with that faster than we thought we would have to.”

The Prime Minister made his comments at the luncheon at Tauranga’s Trinity Wharf on Thursday afternoon.

Prime Minister Chris Hipkins met with the Tauranga Business Chamber at a luncheon at Trinity Wharf on Thursday. Photo / Alex Cairns

Hipkins attended the luncheon to give a post-Budget speech to Tauranga business leaders.

When the floor opened for questions, Priority One chief executive Nigel Tutt asked him about his plans for Tauranga’s infrastructure.

“We’ve got a severe infrastructure deficit in this city,” Tutt said.

“That affects resilience, it affects housing, it affects congestion and, critically, it’s affecting the Port of Tauranga.

“What is your party willing to commit to help us get out of that deficit?”

Replying to Tutt’s question, Hipkins said New Zealand’s infrastructure had not been able to keep up with population growth.

“That is more acute in some areas than others. Tauranga has been one of the major recipients of that huge explosion of population growth.”

Hipkins said this was evident in the city’s housing situation.

”Every time I come here, new neighbourhoods seem to be popping up everywhere, which is a good thing. We need more housing to be built.”

Hipkins said Labour was committed to enabling housing infrastructure.

“We might not be building the houses, but we can make sure that the infrastructure for houses to be built is there.”

Hipkins said Tauranga’s infrastructure was “just overcrowded” and the city’s “vulnerable infrastructure” was growing as well.

Due to a number of factors, Hipkins said he imagined Tauranga would be one of the places that would benefit from the Government’s $6 billion National Resilience Plan to support medium and long-term infrastructure investment.

“We’ve got to build more resilience into that, and that means this area will need more investment.

“I can’t say I’m going to build this road here at this particular time, but I can tell you we’re very, very aware of the infrastructure pressure that there is here.”

Prime Minister Chris Hipkins arrives at Trinity Wharf for a Tauranga Business Chamber event on Thursday. Photo / Alex Cairns

Hipkins told the Bay of Plenty Times after the event the Government wanted to continue “good strong” support for regional economies to boom.

“I think regional economies have done really well out of that,” Hipkins said.

“We’ve seen investment in critical infrastructure, in social infrastructure and in business development opportunities. We want to keep that momentum going.”

When asked what his priorities for the Bay of Plenty would be, Hipkins said critical infrastructure was clearly what most of Tauranga was asking about.

Hipkins said infrastructure covered housing, school, healthcare, transport, telecommunications and utilities such as electricity.

“[It’s about] working with industry to make sure the vital infrastructure is in place to support a region that has absolutely exploded in terms of its population.”

Hipkins arrived at the luncheon at the Trinity Wharf hotel at 12pm after visiting a Pāpāmoa family having insulation installed, as part of the Warmer Homes initiative, and an electrical training company in Tauriko.

Hipkins on the Budget

Hipkins earlier told people in his speech at the Tauranga Business Chamber luncheon he had “made it a priority to engage with business leaders”.

He described the Budget as a “hard balancing act”.

“If we put too much money into the cost of living, we would actually prolong the agony.”

Hipkins said the best thing the Government could do for middle-income households was to get inflation back under control.

“It was going to be a basic Budget and that was what we delivered. The cost of living measures we had were unashamedly targeted.”

As the world rebounded from Covid-19, New Zealand needed to be ready to take advantage of every opportunity, he said.

“But as businesses know you can’t do everything all at once.”

Hipkins said overall, New Zealand businesses were in a good place, although they were feeling the pressure.

“There’s still a lot of ‘what ifs’, but we’re in a relatively good position.”

Hipkins said economic growth was forecast to be 2.7 per cent.

“It’s been a pretty tough three or four years and the exit from our Covid-19 response was a bit bumpy.

“But we’ve got reason to be optimistic now.”

Hipkins said free trade agreements with China, the UK and the EU would help.

“We’ve got a fair amount of headwind to get through, but we are in a good position.”