Source: New Zealand Government
Introduction and acknowledgements
Good morning, everyone. I am very excited to see so many people here ready to improve the way New Zealand delivers infrastructure.
Can I say a quick thank you to Nick and the team at Infrastructure New Zealand for organising this great conference, as well as the sponsors for making it happen. I’m here all day and looking forward to catching up with many of you over coffee and at dinner tonight.
The context
Attending Building Nations is always one of the highlights of my year because high quality, reliable infrastructure is so critical to our country.
Delivering infrastructure for the future is a key part of the government’s ambitious plans to increase growth, productivity and our prosperity.
The Coalition government’s view is that New Zealand can be much wealthier and so much more productive than it is today. That’s one of the reasons why we were elected in October last year.
If we’re honest with ourselves, in recent decades, New Zealand has slipped on almost every measure that matters.
Whether it’s global competitiveness, labour productivity, capital intensity, real incomes, student achievement, infrastructure sufficiency, housing affordability – all have slipped relative to the countries we like to compare ourselves with.
While the past six years have been especially bad, in reality New Zealand’s low-growth predicament is the product of several decades of slide.
We are determined to turn this situation around, and infrastructure is a big part of that.
Infrastructure is critical for productivity and prosperity. It enables the flow of people, goods, and information, and provides us with services that we need and use every day like healthcare, education, energy, and water.
Infrastructure represents some of our longest-lived assets. In fact, some bridges in our highway network have been around since the 1800s.
We can thank past generations for their sustained investment in infrastructure – expect of course for that blip in the 90s. In 2022, our infrastructure assets, excluding land, were worth about $287 billion.
When done well, infrastructure creates and delivers opportunities for all Kiwis to get ahead.
But, when infrastructure is done poorly, we experience loss of service, congestion, reduced productivity, reduced global competitiveness, and worse public health and safety outcomes.
It also leaves us with less room to fund future needs.
Our current problems
Right now, our infrastructure system is not performing as well as it needs to be. We rank 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. This means all of us are paying avoidable “inefficiency premiums” for infrastructure.
The cause of our problem is not isolated – it is spread across every stage of a project’s life, across different players in the system, and is perpetuated by decades of poor practice across successive governments.
The status quo is leading to dire consequences – we have:
- constant cost overruns and delays on projects,
- instances of unreliable and unsafe infrastructure,
- construction companies and workers who don’t want to stay here, and
- a $100 billion dollar infrastructure gap.
If we keep doing things the way we are now, we won’t be able to deal with “business as usual”, let alone get a grip on the future challenges we face like population growth, the impacts of climate change, and global inflation.
Things need to change.
This Government is not here to make tweaks around the edges. We are ambitious, and we are here to fundamentally shift the way we plan, invest in, build, and look after our infrastructure.
My priorities as Minister of Infrastructure
Earlier this year, I mapped out what I want from the infrastructure system.
I want the private sector to invest here, because they are confident in the pipeline and are enabled to get on with it by an efficient and fair consenting system.
And I want the public to enjoy infrastructure that is safe, reliable, accessible, and good value for money.
To achieve this, I’m focused on six priorities as Infrastructure Minister.
- Developing a 30-year National Infrastructure Plan
- Establishing a National Infrastructure Agency (NIA)
- Improving infrastructure funding and financing
- Improving the consenting framework
- Improving education and health infrastructure, and
- 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 developed by the Infrastructure Commission in 2022. While I’m talking of the Commission, I’d like to acknowledge and thank Dr Alan Bollard, who is stepping down as the Infrastructure Commission Chair after five years.
Hard work is underway 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.
Today, I want to talk to you about exciting progress we have made on the 30-Year National Infrastructure Plan and the National Infrastructure Agency.
Then, I will briefly go over where we are at on my other priorities.
National Infrastructure Plan
Let’s start with the National Infrastructure Plan and long-term planning.
If I had a dollar for every time someone said, “what we need is a long-term infrastructure plan for the country that can transcend political cycles,” I’d be a very wealthy man.
The industry has asked for a long-term plan and pipeline so that they can invest in people and equipment.
We have heard you, and we are doing it.
The Government has instructed the Infrastructure Commission to develop an independent National Infrastructure Plan by the end of 2025, and work is underway on that now.
The Plan will outline New Zealand’s infrastructure needs over the next 30 years, planned investments over the next 10 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 Plan is to mirror what happens in Australia, where the government leverages independent agencies to help them make the right long-term choices, while making sure there is strong capability within government to deliver these benefits.
There are four key components of the Plan.
The first component is the Infrastructure Needs Assessment. This will outline the scale of New Zealand’s future investment needs – and what we can afford.
Comparing the long-run drivers of infrastructure demand – like population growth, income growth, aging assets, and natural hazards – against what we have now, is key to identifying our needs. But we also need to be realistic about willingness to pay, because we can’t afford do everything.
When we compare our list of needs against affordability, we can start prioritising and distinguishing between what is a must have and what is a nice to have.
The second component is strengthening the existing National Infrastructure Pipeline. The pipeline will outline infrastructure investments intentions over the next 10 years – in the public and private sector.
The Commission’s Pipeline already has 85 contributing organisations and includes over 6,000 projects, that combined, represent $147.6 billion in value.
Through the Plan, the Commission will strengthen the pipeline by aiming to cover all infrastructure providers. They will also use pipeline data to give insights on market capacity and pipeline certainty – including how likely a project is to be delivered and delivered on time and on budget.
Make sure your organisation is contributing to the National Infrastructure Pipeline. If you’re not in the Pipeline, you’re not in the Plan.
The third component is the Infrastructure Priorities Programme or the IPP, which is a structured, independent review of unfunded projects and problems, as well as initiatives that avoid the need for investment.
The Priorities Programme is modelled off 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.
Proposals that pass the test will be identified as priorities 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.
I’m really excited about the Priorities Programme. The key point is to have independent experts, separate from politicians, do the hard work assessing the projects and looking at their merits.
The IPP is has been rolled out to central government agencies, Crown entities and state-owned enterprises.
Today, the Commission is launching their IPP website, which opens the IPP up to everyone – including the private sector, non-government organisations, local government, and communities.
The first round of priority proposals will be published in April next year, and the second round will be published in June.
The fourth component is priority reforms, which will outline non-investment interventions to improve the way we select, invest in, deliver, and look after infrastructure – because we can’t simply buy our way out of the infrastructure gap. We need to be smarter about how we select new infrastructure and make the most of and look after our existing infrastructure.
I am confident that this Government and future governments can use the National Infrastructure Plan to create a legacy that we can all be proud of.
The Plan will be provided to me and published in December 2025. The Government will then respond to the plan in early 2026.
Towards more bipartisanship
Each time I’ve come to Building Nations we have a conversation about building greater bipartisanship in infrastructure policy and projects.
I have to say, I find it frustrating that particular modes of transport have become politicised. National likes roads, the Greens like cycleways, Labour likes light-rail, and so it goes.
It’s frankly pretty trite and unsophisticated.
It also belies reality.
National started the City Rail Link and Simon Bridges quintupled urban cycleways funding when Transport Minister.
One of the most powerful images I’ve seen this year was NSW Labor Premier Chris Minns on the fantastic new Sydney Metro with former NSW Liberal Premiers Mike Baird and Dominic Perrottet. It’s being opened now under Labor, but it was funded, consented and delivered by the Liberals.
And that’s the point, isn’t it?
Infrastructure by definition is long-lived and big projects in particular tend to be finished long after the politicians who helped start them have moved on.
Everything I am doing as Infrastructure Minister is to set New Zealand up to succeed so that we have the institutions, funding frameworks, and consenting pathways to get on and deliver the infrastructure NZ needs – regardless of what type of government we have.
Today, I have written to the infrastructure spokespeople of each political party represented in Parliament inviting them to be formally briefed by the Infrastructure Commission on the development of the 30-Year National Infrastructure Plan. My intention is that the Commission briefs party spokespeople, either individually or collectively, roughly every six months.
I also think we need greater public and Parliamentary debate about long-term infrastructure planning. I will shortly write to Parliament’s Business Committee asking that we hold an annual special debate on the National Infrastructure Plan.
This wouldn’t change the contents of the Plan, because it is independent, but it will show areas where Parties agree, where we don’t, and where there is room to compromise in the best interest of New Zealanders.
Building consensus on infrastructure won’t be easy, but I am taking concrete steps to bring other Parties on the journey, because, quite frankly, it is the right thing to do.
National Infrastructure Agency
That brings me to the National Infrastructure Agency, which National campaigned on establishing in 2025.
Today, I am happy to announce that the National Infrastructure Agency will be established on 1 December this year.
The NIA will be established by repurposing Crown Infrastructure Partners, and will:
- Act as the Crown’s shopfront to facilitate private sector investment in infrastructure,
- Partner with agencies, and in some cases, local government, on projects involving private finance,
- Administer central government infrastructure funds, and
- Continue the work that CIP is already doing.
Our intention is that the NIA will unlock access to more capital for infrastructure and give the private sector a one-stop shop to partner with Government.
So, if the private sector wants to pitch a project, or is looking for an opportunity to invest in New Zealand infrastructure – the NIA will be open for business very shortly.
This will help us close the infrastructure gap, faster.
The NIA will also lift commercial capability in government and help us be a better client of infrastructure. It will do this by deploying expertise into agencies that are working on projects involving private finance and alternative funding mechanisms. This includes, but is not limited to, projects involving traditional loans, equity investments, Public Private Partnerships, build-operate-transfer models, developer levies, beneficiary levies, value uplift mechanisms, or value capture.
The previous government 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.
This government has set out an ambitious plan to capitalise on innovative funding and financing tools to help ensure that those who benefit from publicly funded infrastructure also contribute to the cost of it.
The NIA will help utilise these tools, including for local government, and over time, will help deliver Regional Deals.”
My colleague, Undersecretary Simon Court, will speak to you tomorrow about our progress on modernising New Zealand’s PPP model – including by building more flexibility and collaboration into the way we work.
The NIA will also administer central government infrastructure funds. CIP currently administer around ten funds – but we will explore the NIA doing more in this space once we complete our review of all existing grants and funds across Government in September.
The size of the NIA is expected to be around 60 staff in 2025, with an annual budget for base operating expenditure of around $26 million – including CIP’s existing operations). This is a 50% increase in staff, and a 44% increase in base operating funding.
I am pleased to say that increased funding for the NIA has been reprioritised from within the existing infrastructure system, and includes $5 million in establishment funding from Budget 2024.
I will work closely with CIP during their transition to make sure we are setting up the NIA to succeed and hit the ground running.
Other changes to the Crown’s infrastructure system
As part of establishing the NIA, we are also simplifying how the Crown’s central infrastructure agencies and entities work. Our current system is a cluttered landscape with a bit of duplication.
Cabinet has therefore also agreed to clarify the roles and responsibilities of other parts of the Crown’s infrastructure system by confirming that, from 1 December:
- The Infrastructure Commission will retain its role as the Government’s independent strategic advisor on infrastructure matters – focusing on long-term strategy.
- The Treasury will assume the Commission’s responsibility for Public-Private Partnership (PPP) policy, and take primary responsibility for supporting me as the Minister for Infrastructure
- Rau Paenga (Crown Infrastructure Delivery) will be mandated to provide project delivery services to Crown agencies that have low infrastructure delivery capability.
Infrastructure Expert Advisory Panel
I just wanted to say a quick thanks to the Infrastructure Expert Advisory Panel that we stood up to provide advice on establishing the NIA. This included Steven Joyce, Sean Sweeny, Sarah Sinclair, Fiona Mules, and Ross Pennington.
The Panel recommended simplifying the Crown’s central infrastructure system. They also recommended that the NIA deliver projects – both mega and small – and provide project support to agencies on vanilla, and more complex projects involving private finance. Essentially consolidating CIP’s and Rau Paenga’s functions.
We have adopted many of the Panel’s recommendations – but you’ll notice we did not merge CIP’s and Rau Paenga’s functions. This was a tricky call. In the end, we picked a way forward that balances system improvements with speed of getting things up and running. My experience is that big structural change and consolidation always takes longer than you think, and we’re a government that wants to get on with things.
Progress on other infrastructure priorities
I now want to quickly touch on where my other priorities are at.
On improving funding and financing …
Earlier this year at the LGNZ Symposium I outlined that Cabinet has agreed to an ambitious work programme to give the Crown and councils smarter and fairer tools to fund and finance infrastructure.
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, modernising the PPP model, and reforming land transport revenue.
On improving the consenting framework…
It is clear that 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%, and that 70% of all consenting expenditure is spent on consultant and legal fees.
This system absolutely broken.
Our Fast Track consenting regime will get nationally and regionally significant projects through the clogged arteries of the planning system. You’ll have probably seen my announcements on Sunday that we’ve been inundated with projects applying to be listed in the Bill. There’s 384 all over the country – from housing, infrastructure, renewable energy, quarries and mines.
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.
On improving health and education infrastructure…
The state of our schools and hospitals is also 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.
On 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 we need to repair and replace assets that are wearing out. 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 throw away.
So, to drive change, we’ll be exploring options around long term capital planning, asset management plans, mandatory reporting, upskilling opportunities, accountability for poor performance, minimum standards, and stronger regulatory scrutiny and monitoring.
Conclusion
I wanted to wrap up by saying that I am so glad to be here today to announce the establishment of the NIA and to talk more about the National Infrastructure Plan.
Collectively, I believe that these changes will bring projects online sooner and will start to build consensus on the infrastructure solutions we want to take this country forward.
New Zealand is facing an existential challenge in infrastructure, and the way I see it is that 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 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.
Thank you.
