New home buyer charges are set to address infrastructure issues that are hindering housing development.

The government will be setting up Crown Infrastructure Partners to fund transport and water connections to new housing development areas. The company will be working with a starting budget of $600 million.

According to Phil Goff, the funding will allow 23,000 new homes to be built in South and North Auckland with greater speed. The money will also be spent on new developments, including transport and water links.

“It means that we can get on, we can get the houses built, we can build them more quickly and we can restrain the pressure on house prices.”

New residents will be charged higher water bills and a specified rate for 20-30 years; the money collected will fund various projects.

However, Mr Goff points to limitations of additional Council borrowing.

“If we borrow at a higher ratio than we are now, we lose our credit rating and every council across New Zealand likewise will lose their credit rating.”

However, the company allows the government to invest in infrastructure without incurring a list of debt.

Connal Townsend, Property Council CEO, emphasizes that this circumvents tight regulations held by councils, since the Crown will uphold the legal ownership of the debt.

This “solves an insurmountable problem”, says Mr Townsend.

“It’s neat, it’s elegant, it should be effective and it should really start to get things moving.”


Connal Townsend explains that it will resolve difficulties faced by developers.

“We’ve got developers looking at sites, we’re all set to go but Watercare in Auckland for example are just unable to bring the water onto site, because they simply just don’t have the money.”

The new initiative has received backing from the Labour Party. Labour MP Phil Twyford commented,

“It’s a way of trying to keep the infrastructure debt off the Council’s balance sheet and off the central government’s balance sheet and I think it’s got to be applauded as a step in the right direction.”

On the other hand, ACT Party Leader David Seymour condemned the government’s plan as an inadequate response towards broader problems related to building and infrastructure.

“It’s a Labour Party solution of creating more bureaucracy, rather than allowing free markets to function.”

“What they should be doing is giving half the GST on construction costs to councils, no strings attached”, Mr Seymour suggests.