New Zealand spending plan includes rebuilding Antarctic base

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New Zealand Finance Minister Grant Robertson discusses the annual budget plan with media, economists and other groups in Wellington, New Zealand Thursday, May 20, 2021. New Zealand plans to rebuild its Antarctic base and spend billions more on welfare payments as part of a spending program aimed at lifting the economy out of a coronavirus slump. (AP Photo/Nick Perry)

WELLINGTON – New Zealand plans to rebuild its Antarctic base and spend billions more on welfare payments as part of a spending program aimed at lifting the economy out of a coronavirus slump.

The government on Thursday unveiled its annual budget, which indicated the economy is doing much better than forecast after the pandemic first hit.

That’s thanks in large part to the nation’s success in stopping the spread of the virus, as well as strong international demand for the nation's milk and other agricultural exports.

Treasury figures indicate the nation’s economy is expected to grow by 2.9% this year and rise to 4.4% growth by 2023. That follows a sharp plunge and quick recovery last year, which ended in an overall economic contraction of 1.7%.

The budget plan includes $344 million New Zealand dollars ($247 million) to rebuild Scott Base in Antarctica, which has been used by scientists since it was first built in 1957.

“The outdated buildings and facilities that keep the residents alive in the coldest, driest, windiest place on Earth have deteriorated,” Foreign Minister Nanaia Mahuta said. “Doing nothing would eventually lead to the closure of the base.”

The project would involve demolishing the existing 12 buildings, which were built in the early 1980s, and replacing them with three large, interconnected buildings. The rebuilt base could accommodate up to 100 people at a time.

One of the new buildings would be used for accommodation and dining, one for science, and one for engineering and storage. A windfarm that produces renewable electricity would be overhauled.

The project still needs final signoff from both New Zealand and its Antarctic treaty partners. Under the plan, bulldozers would be shipped to Antarctica in the first year and construction would take another six years.

Due to its proximity to Antarctica, New Zealand has been a stop-off point from the days of the earliest explorers through to current U.S. missions. New Zealanders have also been involved in exploration and research for generations.

Sarah Williamson, chief executive of Antarctica New Zealand which oversees the base, said it would be the biggest project it had ever embarked upon and would not only future-proof its home on the ice but also bring jobs to the Canterbury region, where the buildings would be pre-constructed.

Other new spending proposed in the budget includes a boost in benefits for welfare recipients that the government hopes will help lift as many as 33,000 children out of poverty.

Prime Minister Jacinda Ardern said families in New Zealand had historically survived on very low incomes while on welfare.

“What we've done today is about targeting need and helping to provide just simply the basics,” Ardern said. “Food on the table. Enabling families to be able to pay a power bill.”

She said previous economic downturns have made inequality worse but this time she hoped for a different outcome while also helping to stimulate the economy.

Proposed new infrastructure spending includes an overhaul of the rail network, with 60 new trains and 1,900 new wagons. Officials say the plan will create about 450 jobs and reduce emissions by moving freight from trucks to trains.

Treasury figures indicate unemployment is forecast to peak at 5.2% this year before declining, much less than the 10% rate predicted last year.

The government also plans to borrow less than anticipated, with net government debt reaching a peak of 48% of GDP before declining, down from last year's forecast of 55%.

“In the face of this one-in-one-hundred-year shock, the New Zealand economy has proved to be remarkably resilient,” Finance Minister Grant Robertson said.

Opposition Leader Judith Collins said the budget lacked the ambition needed to grow the economy and reduce debt, and offered nothing to middle-income earners.

The budget's approval in Parliament is seen as a formality because Ardern's Labour Party holds a majority of the seats.