The funding package includes $NZ 209.8m for the 2015-2016 financial year and $NZ 190m for 2016-2018.

KiwiRail has received $NZ 1.04bn in government funding since 2010 to support its $NZ 4.5bn Turnaround Plan, which is intended to transform the state-owned railway into a viable business. However, the government has signalled the current level of financial support cannot continue in the longer-term with finance minister Mr Bill English describing the situation as "unsustainable."

Transport minister Mr Simon Bridges said further funding will depend on KiwiRail making further improvements to the efficiency of its operations. "KiwiRail must continue to drive significant efficiency and productivity improvements to reduce an ongoing level of Crown funding required," he says.