More than $1 billion has been allocated to deal with the rising costs and fuel insecurity directly related to the Middle East conflict, including a $450 million ‘rainy day fund’ in case things get worse and $373 million of support previously announced. 

Don’t forget the “north of $1 billion” the Government is planning to invest in an LNG terminal, which will sign us up to a new imported fuel subscription. 

And this doesn’t include the additional $1.5 billion that New Zealanders have already spent on petrol and diesel due to the big price hikes since March. 

From what we can see, the only thing in this budget that actually reduces our overseas fuel dependency is $1m for Customs to buy some EVs or hybrids when their old ones are due to be upgraded. And this is from internal operating savings, rather than any new money. 

The Government can be commended for funding more solar on schools, launching Government-backed loans to get businesses off domestic gas, spending more on trades and tweaking Fringe Benefit Tax rules, but these are almost rounding errors in comparison to the amount of money allocated to foreign fuel. 

This Government talks a lot about fiscal responsibility. And the Prime Minister has talked a lot recently about energy independence being critical to national security. Keeping us hooked on expensive foreign energy and only coming up with short-term fixes that maintain the status quo is the opposite of that.

It’s certainly not an electric budget. That’s why it needs to be an electric election. For Rewiring, the show goes on and we’ll keep pushing towards that goal. But, once again, it’s a missed opportunity to set a strategy. 

Solar on schools

Solar on schools is common sense and something we’ve suggested to the Ministry for Education. It’s cheap energy that can be used during the day when students are there.

$20 million being added to the community energy fund is a good start. But it should be bigger than this, and hopefully it comes with some kind of educational component so that kids get more engaged in energy. We’ve seen it before on schools that have already gone down this track. 

As a direct subsidy, this will help a handful of schools. We hope the Government gets creative, and finds a way to use this investment to fund solar on a significantly higher number of schools.

Alongside this investment, the Ministry of Education needs to clarify the energy bill savings that school communities obtain from solar and batteries (whether supported by this $20 million or fully funded through community fundraising) will go back to the schools. 

Batteries could offer massive benefits with schools acting as emergency hubs and contributing to the energy system. 

‍EECA gas transition support

As announced earlier this week, Government-backed bank loans for businesses hoping to transition from gas to electricity are a positive move that will help more of them get past the upfront cost barrier of electrification.

It is an admission that gas has no future and that access to finance is a key part of the energy transition. But there’s still a household- and small business-sized hole in this plan. 

Very little of the budget addresses rising costs for households, aside from reactionary responses to increasing fuel costs. A loan scheme through the Ratepayer Assistance Scheme really does need to be something for the election and it would only require $7 million to unlock solar onto nearly every household in New Zealand. 

As we have seen recently, domestic gas stocks are depleting faster than expected, so a pro-active move was needed. 

Research shows around one third of gas users could transition economically right now with a low-interest loan scheme like this, another third may need a subsidy but could also be helped with this policy, and the last third have no options to transition - yet.

This isn't just about economics anymore. It's also about business continuity. If I was among the one third of business owners that could get off gas economically now with a loan, I’d be moving quickly. And the more businesses that do it, the more domestic gas we’ll have for those in the last third.

We are hopeful no businesses will make the economically irrational decision to use this for LPG or biogas. 

EECA plays an important role guiding businesses to transition off gas and an extra $5.9 million to provide assistance is wise.  

More support needs to be offered, however, as these upgrades can be complex. Our upcoming report goes into great detail about how important this transition is for our wider energy system. 

‍Transport

It’s great to see a $1.1 billion investment in rail and $106 million for Auckland and Wellington’s networks. Previous investment in the rail network allowed these networks to electrify and we love us some electric trains. 

We hope that Kiwirail looks at what’s happening around the world with electric rolling stock for its next investments. 

There’s quite a lot allocated for a new highway, as per usual, but very little for EVs, which, once again, completely contradicts the Prime Minister’s call for more energy independence. 

There has been a positive change to the Fringe Benefit Tax system. Currently, businesses are disincentivised from buying EVs of various kinds over utes because EVs have to pay way more in Fringe Benefit Taxes in many cases. This change removes this huge disincentive. Utes will now pay more in some cases, while an EV used to commute to work could save $7,000 per year, according to analysis from Deloitte.

‍Trades

The energy transition desperately needs more sparkies and plumbers and an extra $69m over four years to double the number of students at Trade Academies to 20,000 by 2030 will help.

There are around 10 million fossil fuel machines in New Zealand and about 8.5 million of them are ready to be electrified right now. Every one of them will need to be charged and maintained and many of them will require upgrades to existing infrastructure in homes, farms and businesses. There will be hundreds of thousands of solar panels, batteries, EV chargers, cooktops and hot water heat pumps to install.

Going electric could be one of the biggest job creation moments in New Zealand history. The tradies who embrace this shift early (and the entrepreneurs who develop solutions to deal with customer problems) stand to benefit the most. 

‍Energy innovation

Energy innovation is something New Zealand desperately needs to become more secure and productive. Any R&D funding disappearing is disappointing, especially given New Zealand’s productivity issues and we were disappointed to see that Ara Ake is to be wound down. 

We greatly value the individuals we've worked with at Ara Ake and appreciated their support in last year’s Machine Count report, our work with them on the Queenstown Electrification Accelerator, and many discussions and collaboration.

The loss of Ara Ake, alongside the earlier disbandment of the Consumer Advocacy Council (an independent voice for energy consumers) and rising energy costs, means households and businesses now more than ever require energy innovation to help drive down bills and build energy abundance. 

But it’s not just about technology or entrepreneurship. It’s about the policies and rules that enable existing technologies to be adopted. 

Regulatory energy innovation is slipping further and further behind technology and New Zealand households, businesses and the economy are the ones missing out and struggling because of this. There is a desperate need for regulators to actively work in the interest of consumers. While Rewiring is doing what it can, we are not funded by Government at all, or anyone for the long term.

The proposed Regulatory Sandbox in Queenstown, as part of the Queenstown Electrification Accelerator, provides the ideal place for regulators to begin to step up and deliver. 

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