8 things at 8 am: Rail's sudden popularity; 'Jacindamania' rumbles on; RBNZ to signal OCR cut?

Bill English announces National's rail investment policy at Papakura Railway Station. Photo: Getty Images

In today's email we detail the weekend's political announcements centred around Auckland's transport woes.

1. Suddenly, rail is popular

The Government may be reviewing the future of KiwiRail and is pushing on with its massive Roads of National Significance (RONS) programme, but it is now also preaching the virtues of rail in Auckland.

National scrambled in recent days to come up with an announcement yesterday on rail investment to compete with Jacinda Ardern's first major policy (re)launch -- bringing forward a light rail line from the Auckland CBD to the airport.

In an event at the Papakura rail station, Prime Minister Bill English and Transport Minister Simon Bridges announced a series of investments in rail in Auckland and Wellington costing $267 million over the next three years.

National's package includes:
the long-foreshadowed electrification of the Papakura to Pukekohe rail line ($130 million);
adding a Third Main Line from Wiri to Westfield ($100 million) with construction starting before the end of next year and ending before the completion of the City Rail Link, and;
double-tracking the Wellington commuter network between Trentham and Upper Hutt ($37 million).
“Electrification is a key element of the National led government’s focus on supporting a cohesive, efficient transport system for Auckland," Bridges said.

“Auckland’s population growth has meant more commuter trains using the rail network around Auckland and competing with the growing number of freight trains using this important corridor," he said.

Auckland's population is growing at a rate of over 50,000 per year at the moment thanks to record high net migration and solid natural population growth. Up to 1,000 extra new and used cars a week are joining the motorway and roading networks in Auckland.

The funding is not additional to the capital budget committed in the May Budget, but it is in addition to the $450 million of capital committed to KiwiRail in the Budget.

Bridges also said the Government did not expect councils to contribute to this latest package.

2. 'Let's do it' with light rail

The Jacinda Ardern honeymoon was in full view at Wynyard quarter yesterday afternoon where around 400 supporters and onlookers cheered on her announcement of light rail from the CBD to the Airport within 10 years.

Newsroom's Tim Murphy covered both events and noted the contrast between a cold and trainless Papakura station and National's 160 supporters with the warmth and enthusiasm at Labour's event.

As is expected and in line with long-standing Labour policy, the plan would be paid with a 10 cent a litre regional fuel tax to go to the Auckland Council.

Ardern promised light rail to Mt Roskill within four years and said the light rail network would extend to the airport, West Auckland, and eventually the North Shore. A new rapid transport bus line from Howick to the airport would also be built and the East West road link would be scaled back.

Tim's piece on Newsroom this morning includes detail and colour from both events.

3. Metiria's self-inflicted sacrifice

Meanwhile on Friday, Green Leader Metiria Turei confronted questions about where she lived and who she lived with while she was on the benefit, and decided she would not step down.

But she said she would not accept a role as a minister in a Labour-Green Government. Ardern underlined that at a later news conference where she said she would not have offered a role to Turei.

Newsroom's Sam Sachdeva covered the two news conferences on Friday and his report was published first on Newsroom Pro.

4. Could the RBNZ signal a rate cut?

The drums are beating for a more dovish outlook from the Reserve Bank when it publishes its August Monetary Policy Statement this coming Thursday morning.

Weaker than expected inflation and jobs data over the last month has caused some economists to muse that the Reserve Bank could not only signal the Official Cash Rate would remain on hold until well into 2019, but that there may even be a suggestion of a cut.

The OCR is already at a record low of 1.75 percent and the talk of possible talk of a cut has nudged the New Zealand dollar lower in recent days.

The New Zealand dollar's strength (more than four percent above the Reserve Bank's May forecast) has also prompted talk that deflationary headwinds could soften the bank's neutral stance into a more dovish view.

5. Numbers to remember

56,000 - MBIE released its second edition of its Future Demand for Construction Workers report over the weekend, which forecast the construction sector would add another 56,000 workers over the next five years. That is a 11 percent increase to a total workforce of 571,300 and comes on top of the extra 18,200 employed in the last year to June 30.

$42.4 billion - MBIE's report with BRANZ and Pacifecon has forecast the total value of construction nationwide will grow 23 percent to a peak $42.4 billion a year by the end of 2020, including $17.5 billion a year in Auckland. The new forecast peak is $5 billion higher than the 2016 forecast.

6. From overseas over the weekend...

In rare foreign policy win for the White House, the UN Security Council voted unanimously on Saturday to impose sanctions on North Korea that would cut its export revenues by a third. (Reuters)

7. Coming up...

Prime Minister Bill English is scheduled to hold a post-cabinet news conference later this afternoon in Wellington.

Parliament resumes this week for the second to last week before rising for the election campaign.

The Reserve Bank releases its August Monetary Policy Statement and publishes its OCR decision at 9 am on Thursday. It is expected to leave the OCR on hold at 1.75 percent and forecast a flat OCR for more than two years, with the potential for suggesting a cut if inflation does not pick up.

8. One fun thing

Guy Keverne Body's cartoon on National's response to Jacinda Ardern captures the mood. The Waterview tunnel features.

Have a great day