What will the government own after today’s purchase?

The government already owns the rail infrastructure which includes 4,000 kilometres of track, six million sleepers, 1,787 bridges, 150 tunnels, 12,000 culverts and signalling infrastructure including points, railway level crossing alarms, electrification and communications systems. These, along with control of trains on the network, are vested in ONTRACK, which has a staff of 900.

Following today’s purchase, the Government will own 180 mainline locomotives, 4,200 wagons, one rail ferry and leases on two other ferries. Toll employs approximately 2,300 people in its rail and ferry operations.

Why has the government purchased Toll’s New Zealand rail business?

Buying the rail operational business enables the government to implement a sustainable, integrated transport strategy and to invest in the business to further rail’s potential to contribute in a much more meaningful way to the New Zealand economy. The government believes a fully modernised rail system will be a central component in our work to build a truly sustainable economy.

It also enables the government to avoid paying subsidies to third parties and the on-going disputes over the implementation of the National Rail Access Agreement that had the potential to destroy value in the business and erode the morale of the people who work in it.

Is this the sale and purchase agreement?

What has been signed is a “frame agreement” - an overarching agreement that sets the path for due diligence and contains the basis for all the subsidiary agreements necessary to carry out the transaction.

How much a share does are you effectively paying for Toll’s business?

If you remove the value of the road transport and warehousing businesses, the value is approximately $3.16 a share. The amount being offered is not out of kilter with the $3 a share paid by Toll to buy minority shareholders last year. The asset has a greater value for the Government because the deal unlocks a number of benefits that didn’t exist under the former ownership structure.

How will the rail system be operated after the government takes ownership on 1 July?

The government is in discussions with Toll on a transitional agreement and is still developing plans for the long-term governance structure of the rail business.  Further details will be made public as soon as they are available.

Will the government invest in new rolling stock for the rail system?

The Minister of Finance will investigate options for purchasing new, modern rolling stock and will present options to Cabinet as soon as possible.

On April 1 the Labour-led government is introducing some important changes to KiwiSaver, benefit payments, business taxation and a range of other government programmes.

For Families

It will be easier to save for your retirement when employee contributions to KiwiSaver begin from April 1 2008. From then your employer will match 1% of your KiwiSaver savings, rising to 4% by 2011.

To help New Zealand's young and lower paid workers, on April 1 the adult minimum wage increases from $11.25 to $12.00 an hour. 16 and 17 year olds will also receive the full adult minimum wage after a period of 3 months or 200 hours of employment, whichever comes first.

For Older New Zealanders

From April 1, older New Zealanders will benefit from a 3.18% increase in New Zealand Superannuation. The new rates see single people living alone receiving an extra $8.81 per week, single people sharing accommodation receiving  an extra $8.14 per week, and couples who both qualify receiving an extra $13.56 per week.

For Business

From April 1, the Labour-led government is reducing the comapny tax rate from 33c to 30c.

To boost private research and development, from April 1 kiwi businesses will be eligible for a tax credit of 15% towards the cost of R & D. 

The fast rising cost of houses in recent years has made the dream of home ownership more difficult to achieve. The problem is not unique to New Zealand - it's an issue in Australia, Britain, and Canada too.

In the Prime Minister's Statement to Parliament a comprehensive action plan to increase the supply of affordable homes was announced.

• Labour will investigate ways to increase the number of large scale urban housing projects which incorporate affordable homes.
• Labour will support the development of a larger not-for-profit housing sector, such as projects being developed by community groups.
• There will be a review of public land holdings, starting in Auckland, to see what land might be available to contribute to these kinds of projects.

Community-based organisations make a vital contribution to our society, helping vulnerable families, children, and young people get on top of their problems and get ahead in life.

In the Prime Minister's Statement to Parliament a big investment in long-term funding for community-based organisations was announced.

• From 2008/09 there will be an extra $37.5 million of funding for community organisations providing social services, increasing to an annual level of $192.8 million in 2011/12 and beyond.
• The Labour-led government will invest a total of $446 million over the next four years in community-based services.

We can't build our country's future on a low skill, low wage economy, which is why we need change in education and a quantum leap in the aspirations we have for our young people.

In the Prime Minister's Statement to Parliament Schools Plus, a plan to develop the schools of the future was announced.

• Under Schools Plus there will be significant new investments to build the education and training system our young people need for a twenty first century economy.
• Under Schools Plus all young people will be in school or some other form of education or of training until they reach the age of eighteen.
• Under Schools Plus the school of the future will be the base from which young people begin youth apprenticeships, obtain work skills or continue with a more traditional programme of academic work leading to university or tertiary education.

The Labour-Progressive Government is committing $700 million to a new research, development, and innovation plan for the future in New Zealand's pastoral and food industries.

This bold new initiative is part of the Labour-Progressive Government's plan for the future to transform our economy into a smart, innovative, and high value supplier of goods and services which global markets demand.

The government's upfront investment of $700 million will grow to around $1 billion as it earns interest over the next ten to fifteen years. In addition, industries will be expected to match the government's commitment on an annual basis, resulting in an expected total fund of around $2 billion over the next ten to fifteen years. This fund will be called NZ Fast Forward.