The government is promising to pump an extra $11 billion into new infrastructure over the next four years, spread across new schools, hospitals, housing, roads and railways.
More than $800 million will be spent restoring State Highway 1 around Kaikōura. Photo: RNZ / Rebekah Parsons-King
Finance Minister Steven Joyce unveiled "the biggest addition to the government's capital stock in decades" in Wellington this afternoon.
The amount includes the $9bn over four years announced in the government's half-year economic and fiscal update in December, plus an additional $2bn.
This year's budget would include the first tranche of $4bn in capital investment, including $812m for reinstating State Highway 1, north and south of Kaikoura, he said.
More details of how the money will allocated will be revealed in the Budget on 25 May.
"We are growing faster than we have for a long time and adding more jobs all over the country," Mr Joyce said. "That's a great thing, but to keep growing, it's important we keeping investing in the infrastructure that enables that growth."
The initial $4bn tranche will be followed by $2bn in 2018 and another $2.5bn for each of the next two years.
The $11bn figure was on top of investments already planned by the government, Mr Joyce said.
The government last year forecast just $3.6bn of new capital spending over the next four years.
"We used to send our kids to South East Queensland and Sydney to work, and they come back here," Mr Joyce said.
"We just need to invest in the infrastructure required to maintain that growth."
Mr Joyce also announced a new target of reducing net debt to between 10 and 15 percent of GDP by 2025.
That was compared to its current goal of about 20 percent of GDP by 2020.
The government had made great progress in its immediate target, Mr Joyce said.
"Net debt is expected to be at 24.3 percent of GDP by the end of this financial year. Now it's time to set a new target for net debt out to the middle of the next decade."
The new goal would leave the country prepared to deal with major shocks, Mr Joyce said.
"We are a geologically young country, and we are also a small country in an often turbulent world - so there are plenty of shocks ahead of us.
"We have learnt from the Global Financial Crisis and the Canterbury earthquakes that shocks can come along at any time, and sometimes they come in pairs."
The government did "the right thing" then and borrowed the equivalent of about 20 percent of GDP in order to help people through those crises, he said.
"But now it is the time to get net debt down - to make sure we have the capacity to absorb and respond to the next challenges New Zealand will face," he said.
"That's what true resilience is all about. And we owe it to our future to take that decision."