18 May 2023

Budget 2023: Free public transport for children under 12 among climate highlights

3:33 pm on 18 May 2023

Photo: RNZ // Angus Dreaver

Free public transport for children and more money to insulate homes are the main climate announcements from this year's Budget.

Overall, new spending on climate initiatives has dropped this year compared to the previous two Budgets.

About $300 million is going into making public transport free for children, and half-price for those under 25.

* Follow RNZ's live 2023 Budget blog here.

Roughly $120m will go to expand EV charging infrastructure.

Nearly half a billion dollars ($402.6m) is going to expand the programme to retrofit homes to make them warmer, drier and more efficient.

New spending on climate from the dedicated pot - the Climate Emergency Response Fund is $1.9 billion - is significantly less than the $2.9b last year and $2.3b in 2021.

Climate Change Minister James Shaw said the climate crisis was fundamentally linked to the cost-of-living crisis.

"We are addressing these dual challenges by investing in affordable public transport, insulating thousands more homes nationwide, and improving energy resilience in local communities.

"Tackling climate change, with measures like free public transport for children, also helps to ease living costs, reduce emissions and deliver for future generations.

"Budget 2023 will also help more families live in warm, dry homes - which are also energy-efficient and climate-friendly through the expansion of the successful Warmer Kiwi Homes


Transport free for more people

The major new policy is free public transport for five-12 year olds and half priced for under-25s, which is getting $327.4m in funding.

The programme begins on 1 July.

Public transport is already free for under fives.

It is being paid for from the dedicated climate fund, the Climate Emergency Response Fund or CERF.

Another $120m is going to expand electric vehicle charging charging infrastructure to build 25 hubs around the country - each containing up to 20 chargers.

It aims to have charging hubs every 150-200km on main highways, with Kaikōura, Tūrangi, and Tīrau specifically mentioned as getting hubs.

It aims to have a public charger for every 20-40 EVs in urban areas and public charging at community facilities for all settlements with 2000 or more people.

A $279m investment package for state highways will focus on slip prevention, flood mitigation and managing risk of sea level rise.

A further $370m is going into investing in rail infrastructure resilience.

Nearly $50m is to go on investment in the public transport workforce.

And $30m over three years is going to support the purchase of low missions heavy vehicles.

Additional money is going into the Clean Car Discount scheme which has outperformed expectations in increasing the uptake in EVs.

Updated forecasts project that the programme, alongside the Clean Car Standard, will collectively reduce emissions by an additional 50 percent out to 2035 over and above what was forecast when it started.


About $400m is going to the programme to insulate and heat up to 100,000 low-income households over four years.

The new spending will also expand the scope of the current Warmer Kiwi Homes programme, to go on more efficient lighting, water heating and on basic home repairs.

Spending at a glance

  • $1.9 billion climate spending package overall
  • $402.6 million to expand the duration and scope of the Warmer Kiwi Homes programme
  • $370 million is going into investing in rail infrastructure resilience.
  • $327.4 million on public transport including making it free for children and half price for under 25s
  • $300 million in new money for the green bank Green Investment Finance (already announced)
  • $167.4 million in building resilience to future climate events
  • $120 million to expand EV charging infrastructure
  • $50 million for distributed renewable energy projects in isolated communities
  • $39.2 million in improving the mapping of New Zealand's coastline and identifying coastal areas at significant risk of climate-related hazards and natural disasters.
  • $38 million on design of Emissions Trading Scheme and centralised exchange for New Zealand Unit trading
  • $32.5 million to accelerate the adoption of green hydrogen
  • $30 million over three years has been set aside for clean heavy vehicle grants
  • $24.7 million to improve data on impacts of climate change and adaptation and mitigation
  • $22.9 million to increase Westport's resilience to future flooding (already announced)
  • $19.9 million to support resilience to climate change for iwi, hapū and the wider hapori whānui by expanding both data quality and access
  • $10.7 million investment to reduce diesel generation and establish a renewable energy system on the Chatham Islands

Explanation for drop in climate spending

There has been a drop in new climate spending from the dedicated climate fund compared to last year.

Budget documents explain the drop is due to the Budget climate spending last year being a large initial investment to meet domestic and international emissions targets.

It said the inclusion this year of adaptation - spending to adapt to the effects of climate change - in the funding criteria for the CERF makes comparisons between last year and this year difficult.

"The benefits of adaptation cannot be appropriately measured by emissions reductions.

"While much of our immediate focus as a government is still on rebuilding from the North Island weather events, the occurrence of the events is a reminder that we need to enhance our resilience to, and be prepared for, climate hazards before they happen."

It said the size and make-up of the Budget 2023 CERF package reflected the scale and breadth of the challenge ahead, while prioritising resources according to where they can have the greatest impact.

Tanked carbon price hits govt's pocket

Late last year the government rejected advice from the Climate Change Commission that could have allowed the carbon price on the Emissions Trading Scheme to rise.

The price subsequently plummeted, with the market seeming to doubt the government's climate commitments.

This has led to a big hit in the government's revenue.

Revenue gathered from the ETS funds, the CERF and cash proceeds from the scheme have fallen by $2.7b over four years.

More than $600m that was set aside for the cash for clunkers scheme, which was announced last year and then abandoned by Prime Minister Chris Hipkins, has been fed back into the pot of climate spending.

Cabinet has decided to top up the CERF with an additional $1.9b. This leaves $1.5b remaining in the CERF.

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