The Wellbeing Budget

Transforming the economy

Investing in rail

Rail has huge benefits for New Zealanders' wellbeing, including unlocking regional economic growth, reducing emissions and traffic congestion and preventing deaths and injuries on our roads. The Coalition Government is revitalising rail, with a substantial investment in KiwiRail, regional rail and the Auckland City Rail Link.

Budget 2019 and the Provincial Growth Fund (PGF) provide $1 billion to support the redevelopment of KiwiRail. This includes $375 million for new wagons and locomotives, $331 million to invest in track and other supporting infrastructure and $35 million to begin the process of replacing current ferries that are nearing the end of their lives.

$300 million is also being provided from the PGF for investment in regional rail initiatives.

Deputy Prime Minister and Minister for State Owned Enterprises Winston Peters says the Coalition Government has secured the future of our national rail assets because they are a critical and valued part of our transport network.

"This funding will enable KiwiRail to become resilient and reliable through substantial investment in rail infrastructure, purchasing new locomotives and wagons, and beginning the process to replace the Interislander ferries.

"After 155 years of rail in New Zealand, the historic misstep of privatisation and the managed decline of the past decade, securing these assets for the future is especially gratifying," Winston Peters says.

The Ernst & Young Value of Rail Report18 notes that rail prevents at least 271 accidents per year by reducing the number of trucks on the road. It also found that a tonne of freight moved by rail delivers a 66 per cent reduction in carbon emissions compared with trucks.

Transport Minister Phil Twyford says funding in this year's Budget is just the first step to rebuilding rail as the backbone of a sustainable 21st century transport network, with a long-term national rail plan to be developed this year.

"Rail makes a vital contribution to urban public transport. Moving more freight by rail is economically efficient, and reduces carbon emissions as well as deaths and serious injuries on our roads.

"Previous Governments have taken a hands-off approach and left rail in a state of managed decline.

"That's why we instigated the Future of Rail review to make sure we are taking a long-term, joined-up approach to rehabilitating rail.

"Our New Zealand Rail Plan will outline the Government's strategic vision and give a 10-year programme of indicative investments and benefits," Phil Twyford says.

KiwiRail will report on progress on implementing the Government's vision for rail and further funding will be considered in Budget 2020.

Budget 2019 also provides $405.5 million to cover the Crown's share of forecast cost increases to build the Auckland City Rail Link.

The City Rail Link will provide the equivalent of 16 extra lanes of traffic into the city centre during peak times and the number of people within 30 minutes travel of Auckland's CBD will double.


18. Ernst and Young (2016). The Value of Rail in New Zealand. Available at

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