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Budget 2024: Lights flicker and dim on climate initiatives 

Image courtesy of Leroy de Thierry.

Budget 2024 delivers on some of the Government’s election promises, while cutting costs on key initiatives such as energy efficiency, LEDs and hot water heating support, and the Carbon Neutral Government programme. Here’s our take on the Government’s 2024 budget. 

If the budget is a signal of government direction, it’s safe to say our country isn’t going anywhere, rather we’ve shifted gears into reverse when it comes to climate. The coalition’s first budget is underscoring claims that climate isn’t a priority in the short-term.  

We’re seeing cuts to existing climate programmes, while spending billions cleaning up after climate events such as Cyclone Gabrielle and the Auckland Floods of 2023, and preparing for the next disasters. 

The climate crisis can’t wait for politicians. In fact, the climate crisis is no longer a siloed issue or a greenie agenda, it is intrinsically related to all facets of our economy and our livelihoods, from agriculture to homes, health to education.  Unfortunately, Budget 2024 sets us on a high-carbon trajectory. 

It’s not all doom and gloom, despite the red pen taken to climate initiatives, some positive new commitments from government will provide some opportunity to our sector looking for confidence.  

Part of the government’s budget includes $140 million for 1500 social housing spots to be delivered by Community Housing Providers. We know and work with many such as Ōtautahi Community Housing Trust who are delivering warm, dry, efficient homes by certifying to Homestar. As a sector we’ll need to support CHPs to ramp up their build programmes to deliver at larger scale.  

The difficulty will be whether building under Kāinga Ora slows or stops as the government shifts towards CHPs housing construction. Given KO are delivering 4500 homes a year, we may see a drop off in residential construction while land, contracts, staff, and the supply chain are sorted for CHPs to deliver.  

What’s in, or rather, what’s not in Budget 2024 leaves a huge task for new climate minister Simon Watts in the upcoming second Emissions Reduction Plan. Given Finance Minister Nicola Willis has signaled ongoing fiscal discipline, it’s unlikely any money will be spent on ambitious climate initiatives. Therefore Government has no choice but to ramp up low or no-cost initiatives a part of the upcoming ERP if we’re to meet our climate targets. This is where things like the Building for Climate Change programme, energy labels and Building Code improvements offer a huge opportunity to progress real emissions reductions at little-to-no cost.  

The NZGBC and property and construction sector is ready and able to help deliver for NZ with healthier lower carbon buildings and homes.   

 Our budget summary 

New government commitments that will continue to provide a pipeline of work for our sector over the next four years: 

  • $780 million of School Property Portfolio Depreciation Expenses  

  • $34.4 million into the Christchurch School’s Rebuild programme 

  • $56.25 million into the School Property Portfolio Growth programme 

  • $92.2 million into Resource Management Reforms – Replacement  

  • $75.1 million into the Kāinga Ora Crown-Funded Programmes and Statutory Obligations – Continuation of Funding  

  • $23.1 million into Severe Weather Response Readiness, Resilience and Recovery 

  • $63 million into the Apprenticeship Boost Continuation – Social Development 

  • $8.4 million into the Accelerating Health Infrastructure Unit Work programme  

Shorter term funding initiatives that will also provide opportunities are: 

  • $140 million into the Social Housing Supply – Additional 1,500 Social Housing Places (beginning in 2025/26) to be delivered by Community Housing Providers  

  • $75m into the Transfer of Infrastructure of Assets to Third Parties (over the next two years)  

  • $330 million into North Island Weather Events – Road Response and Recovery (over 2023/24 and 2024/25) 

  • $1.8 million into the Apprenticeship Boost Continuation – Tertiary Education (over 2025/26, 2026/27 and 2027/28)

Home and building initiatives take a hit 

  • Warmer Kiwi Homes programme reduced

    • Most noticeably reversing the major step forward we saw in the last budget by cutting funding for hot water heating, low-cost energy efficiency measures, LED lighting, and community outreach programmes covered by Warmer Kiwi Homes.

  • That's part of a $178.5 million hit to the Energy Efficiency and Conservation Authority, which also stops the Low Emissions Transport Freight Decarbonisation Grants programme, and scales down other programmes.

November 2023 NZ signed up to a global pledge to double energy efficiencyWe committed to "work together in order to collectively double the global average annual rate of energy efficiency improvements from around 2% to over 4% every year until 2030"  and we "Committed to put the principle of energy efficiency as the "first fuel” at the core of policymaking, planning, and major investment decisions."  That goal now appears harder to reach

  • Funding for the Government's Carbon Neutral Government Programme reduced. 

  • What’s left of the Affordable Housing Fund, a fund designed to support new, affordable homes for low-to-moderate income New Zealanders, is being returned to government coffers.  

  • Following the review of Kāinga Ora, $200million in operating costs is being cut for the agency progressing Large-scale Projects, including the contingency for cost-overruns. ‘As part of the broader review into funding in the Housing portfolio, the Large-Scale projects will be assessed to ensure that remaining funding are directed towards the highest value-for-money spend, with an emphasis on enabling additional housing supply.’ 

  • The Regional Housing Improvements programme is also being scaled down, with fewer tenanted Landbank houses to be remediated per year. 

  • Also of note is an $8 million saving over the next four years but reducing Stats NZ’s share of the operating and lease costs for office spaces in Wellington and Christchurch through increasing the co-location of other agencies.  


Climate initiatives axed or scaled down over the next four years 

  • $10million of funding has been scaled back for the Accelerator Wood Processing Growth Fund which supports wood processing capacity.  

  • MBIE’s Circular Economy and Bioeconomy Strategy work is being stopped ‘as it is considered a low-value programme when compared with other work on climate change.’ 

  • $38 million is being cut from MBIE’s Energy portfolio programmes, including scaling down the Community Renewable Energy fund, and the Support for Energy Education in Communities Programme. It also includes discontinuing work on the Energy Emissions Reporting Scheme and cutting funding for small-scale distributed renewable energy and demand response systems. 

  • $10million is being cut from MBIE’s Just Transitions programme. 

  • Funding for the Climate Change Commission is being decreased by $15 million, including axing funding for the Commission’s agricultural emissions policy advisory function. 

  • The budget includes a $35million reduction in climate change programmes including reducing funding for:  

  • the Climate Change Development Fund 

  • Climate Resilience for Māori initiative 

  • Climate Change Chief Executives Board 

  • implementation of the Carbon Neutral Government Programme 

  • Climate Data Infrastructure 

  • Enabling a Scaled-up, High Quality Voluntary Carbon Market 

  • Cuts are being made to evidence and data functions, with less spending on consultants, external agencies, and specialists that supply evidence and data services ‘including updates to environmental standards, monitoring, reporting, policy work and science assurance.’ 

  • Additionally, as was well signalled early by Government, the budget confirms the axing of the Clean vehicle discount, saving $10 million. 

Big spending for climate resilience and disaster response 

Natural disaster response is a priority in this budget, as communities across the motu are still reeling from the events of Cyclone Gabrielle and the Auckland Floods.  

“Budget 2024 confirms $939 million in additional funding for the NZ Transport Agency and local councils to continue their response and recovery works,” Transport Minister Simeon Brown and Emergency Management and Recovery Minister Mark Mitchell say.  

An additional $200million will be invested in flood infrastructure upgrades and $1.2billion into the Regional Infrastructure Fund. 

Climate iniatives

Future revenue raised from the Emissions Trading Scheme (ETS) will not be used for ‘Climate Emergency Response Fund’ in the future.  Past commitments remain in tact. 

$2.6 billion of climate initiatives will roll over from previous the Climate Emergency Response Fund (CERF), including: 

  • a public network of electric vehicle charging infrastructure 

  • a grant scheme for clean heavy vehicles 

  • a fund for decarbonising the public transport fleet, supporting local authorities to purchase electric busses 

  • public transport concessions for community service card holders 

  • development of an on-farm emission measurement scheme 

  • supporting New Zealand’s International Climate Finance Commitment 

  • the Warmer Kiwi Homes programme 

Minister of Climate Change, Hon. Simon Watts is banking on the second ERP acting as the government’s silver bullet to meet emissions reduction targets, with the Emissions Trading Scheme seen as the major lever. “The ETS is a critical tool to helping us achieve our targets and will be front in centre in our emissions reduction plans.”