Whether it’s global competitiveness, labour productivity, capital intensity,
real incomes, student achievement, infrastructure sufficiency, or housing affordability — all have slipped relative to the countries we like to compare ourselves with.
We are determined to turn this situation around, and infrastructure is a big part of our plan.
Right now, our infrastructure system is underperforming.
New Zealand ranks in the bottom 10% of high-income countries for the quality and efficiency of our infrastructure investments. Put simply, we get less and poorer quality infrastructure for our spending levels.
This problem has been caused by decades of poor practice across successive governments and is leading to dire consequences including constant cost overruns and delays on projects, unreliable and unsafe infrastructure services, and a $104 billion infrastructure gap.
We simply can’t go on the way we’ve been going.
Solving the problem
Fixing the infrastructure deficit and improving our system will take a sustained effort from government, councils, builders, developers, financiers, and the public it will take all of us working together.
I’m focused on six priorities as Infrastructure Minister.
1. Developing a 30-year National Infrastructure Plan.
2. Establishing a National Infrastructure Agency (NIA).
3. Improving infrastructure funding and financing.
4. Improving the consenting framework.
5. Improving education and health infrastructure, and
6. Strengthening asset management and resilience.
These priorities are in response to what the coalition Government has heard from industry and infrastructure experts, both in New Zealand and overseas.
They also reflect the Infrastructure Strategy released by the Infrastructure Commission in 2022.
National supported the development of the commission and as its minister, I am proud of the work it is doing. I would like to express my thanks to Alan Bollard, the board chair, who after five years is retiring at the end of September.
He has provided invaluable guidance and has helped shape the commission into a trusted, independent voice that our infrastructure system needs.
Hard work is under way on this ambitious change programme. Cabinet has established an Infrastructure and Investment Ministers Group to oversee this work and we are getting on with the job.
30-year National Infrastructure Plan
If I had a dollar for every time someone said to me, “what we need is a long-term infrastructure plan for the country that can transcend political cycles,” I’d be a very wealthy man.
Those people are right, so we are delivering it.
The Government has instructed the Infrastructure Commission to develop a 30-year National Infrastructure Plan by the end of 2025 and work is under way on that now.
The 30-year plan will outline New Zealand’s infrastructure needs over the next 30 years, planned investments over the next 10-15 years, and recommendations on priority projects and reforms that can fill the gap between what we will have and what we will need.
I want the 30-year plan is to mirror what happens in Australia, where the government leverages independent agencies to help them make the right long-term infrastructure choices, while making sure there is strong capability within government to deliver these benefits.
The National Infrastructure Plan also includes an Infrastructure Priorities Programme - a structured independent review of unfunded projects and problems, as well as initiatives that avoid the need for investment.
Proposals that pass the test will be identified as a priority for New Zealand. This does not guarantee funding, but it does provide decision-makers with a menu of credible proposals, which could inform investment decisions, and other decisions like eligibility for fast-track consenting and Regional and City Deals.
The Priorities Programme is modelled on the Infrastructure Priority List in Australia, which has helped them build political consensus on an enduring pipeline of major projects - and that is what I want for New Zealand as well.
National Infrastructure Agency
The government infrastructure system is a cluttered landscape, and there are overlapping roles and functions with quite a bit of duplication. We have taken time to understand the system and think strategically about the improvements needed to get us to a more productive future state.
At the Building Nations summit I’ll be making announcements about reforms to the system, including the establishment of our new National Infrastructure Agency (NIA).
National campaigned on establishing a vehicle to better connect private finance and domestic and offshore capital into New Zealand infrastructure opportunities, and the new NIA will give effect to this commitment.
Improving funding and financing
Cabinet has agreed to an ambitious work programme to allow the Crown and councils to fund and finance infrastructure in a fairer and smarter way.
The truth is that decades of under-investment in maintenance, poor use of pricing, an unwillingness to use private capital, and a lack of desire to use new tools has really caught up with us.
Crown and council infrastructure has historically been mostly funded by taxpayers or ratepayers. Taxes and rates are an appropriate source of funding for some infrastructure, but our over reliance on this approach has led to multiple challenges.
It is difficult to manage demand and signal where future investment is needed, because there are no price signals.
It is difficult to deliver infrastructure for growth because funding models for many assets do not reflect the full economic cost of delivering the service. Councils are also not incentivised or equipped to deliver infrastructure in advance of growth, even when it makes sense to do so.
This Government is going to be more strategic and informed about how it uses its balance sheet. Rather than defaulting to the use of grants, our expectation is that every significant infrastructure project that seeks support from the Crown will consider opportunities for user- or beneficiary-pays funding, and private financing.
We are giving the Crown and councils better tools to fund and finance infrastructure.
In order to do this, we are working on things like value capture, value uplift, reform of the Infrastructure Funding and Financing Act, changes to development contributions, and land transport revenue reform.
We will implement incentives for councils that support, not block, more housing. We are also modernising New Zealand’s Public Private Partnership (PPP) framework, and Undersecretary Simon Court is doing excellent work here.
We want a best-in-class approach to PPPs. The previous government just rejected private capital outright. Our approach is to be smart about private capital and use it in a way that unlocks investment and brings more maturity to the design, build, and maintenance of projects.
Improving the consenting framework
Our consenting framework for infrastructure takes too much time, costs too much money, and is stopping us from building the things New Zealand needs.
Research from the Infrastructure Commission found that from 2014 to 2022, consenting costs rose by 70%. They also noted that 70% of all consenting expenditure is spent on consultant and legal fees.
This system is absolutely broken. But this Government is going to fix it.
Our Fast Track consenting regime will get nationally and regionally significant projects through the clogged arteries of the planning system.
As part of phase two of our RMA reforms, we will be developing a National Policy Statement for Infrastructure, picking up on some work developed under the previous government.
We will also improve the designation process and make it easier to build quarries, among other changes.
Improving education and health infrastructure
The state of our schools and hospitals is dire - sadly, we are often delivering key services to children and unwell Kiwis in leaky and unsafe buildings.
The independent review into improving school property has been received by the Government and we are considering next steps.
Erica Stanford and I will have more to say soon.
Strengthening asset management and resilience
I was shocked to hear that New Zealand is ranked fourth to last in the OECD for asset management, and dead last for the metric on Accountability and Professionalism.
One of the biggest challenges facing New Zealand’s infrastructure is the cost and resources needed to repair and replace assets that are wearing out.
As Alan Bollard mentions in his op-ed, for every $40 spent on new infrastructure, we should be investing $60 in maintenance and renewals.
I’m determined to improve asset management and ensure infrastructure providers are operating in a system where good asset management is a bare minimum, not an optional throwaway.
So, to drive change, we’ll be exploring options around early-planning, information collection and reporting, upskilling opportunities, accountability for poor performance, minimum standards, and stronger regulatory scrutiny and monitoring.
Conclusion
New Zealand is facing an existential challenge in infrastructure, and as I see it, we have two choices. We can either struggle against a poor functioning system that works against us at every step, or we can do hard work together to change these ridiculous and costly ways of doing things.
This Government is committed to doing the latter and getting on with it, because we know that’s what the economy needs to grow, and what New Zealanders want so that they can prosper.
