Infrastructure Sector – Have we got it right? New Zealand Infrastructure Commission seeks feedback as it develops the National Infrastructure Plan

The New Zealand Infrastructure Commission has published Testing our thinking: Developing an enduring National Infrastructure Plan to share its initial thinking and seek feedback as it develops the National Infrastructure Plan. When completed, the 30-year Plan will help inform decision-making by both central and local government, giving the infrastructure industry more confidence to invest in the people, technology and equipment they need to build more efficiently.

“The infrastructure we depend on today was built and paid for by previous generations. We need to leave future generations with just as strong a legacy, while making sure we don’t overly burden them with the costs. This will mean making careful choices about where we spend our infrastructure dollar, understanding what our needs are, while also allowing flexibility for the needs we can’t foresee,” says Peter Nunns, Acting General Manager – Strategy.

“In the discussion document we outline some of the ways we’re looking at addressing this through the Plan. This includes forecasting long-term infrastructure needs, looking at current investment intentions, and independently reviewing unfunded infrastructure proposals to give decision-makers a menu of high-quality vetted proposals through the Infrastructure Priorities Programme. We will also provide advice about how we can build capability to plan and build infrastructure better, how we can take better care of our existing assets, and how we can regulate and govern infrastructure better.”

“We obviously don’t have a monopoly on good ideas so to develop the National Infrastructure Plan we need to hear from people who provide and use infrastructure. We’ve released a discussion document to help to test our thinking on our long-term infrastructure needs and how we can address them. We welcome and encourage your feedback,” says Nunns.

Part of the role of the New Zealand Infrastructure Commission is to help build a shared, long-term view of New Zealand’s infrastructure needs and priorities. The New Zealand Instructure Commission is required to produce strategic, independent advice on the long-term needs for New Zealand’s infrastructure every five years. This advice is delivered to the Minister for Infrastructure, and the Government must develop its response. In May 2022, the Commission published New Zealand’s first Infrastructure Strategy, making recommendations for improving New Zealand’s infrastructure system. The National Infrastructure Plan will build on the Strategy and include recommendations to meet New Zealand’s infrastructure challenges.

The Minister for Infrastructure has asked the Commission to lead in the development of the Plan. To help inform our thinking for the Plan, the Commission is seeking input from Māori/iwi organisations, across central and local government, and with the private sector and the public.

A draft of the Plan will be delivered to the Minister for Infrastructure in mid-2025. Following public consultation and feedback from the Minister, the Commission will finalise the Plan which will be delivered to the Government in late 2025.

The discussion document includes four key sections, summarised below:

Section One: Why we need a National Infrastructure Plan

This section discusses the drivers for a National Infrastructure Plan, including:

• The need to balance greater certainty about our infrastructure needs so we can plan and prioritise, with the flexibility to allow for changing needs and unforeseen events.

• The challenge of investment efficiency. International comparisons show New Zealand’s invests in infrastructure at a similar or even higher level than other OECD countries, but we rank near the bottom for the efficiency of that spend.

• A need to find new ways to meet our infrastructure needs. Research has show that if we were to simply build all the public infrastructure we may think we need, it would cost 9.6% of our GDP – almost twice what we are currently spending and more than we’ve spent in the past. Instead we can look at what we can afford and get better use from what we’ve got.

• A need to improve the way we govern infrastructure. New Zealand ranks poorly against other high-income countries on infrastructure governance practices

• The opportunity to better coordinate infrastructure planning, delivery and operations. This enables infrastructure investment to be focused on the right things at the right times, reduced project costs, and delivery of more affordable services.

Section Two: Our long-term Needs

This section sets out our approach to identifying infrastructure needs through a system-wide view. This means considering the infrastructure we already have and the factors that may increase or decrease the need for investment in the future.

We will take a realistic view on what financial resources we are likely to have for infrastructure investment, based on what we have spent in the past.

We outline eight factors that will influence our long-term investment needs:

• the need to renew existing infrastructure as it wears out

• population growth and demographic change

• economic development and changing standards

• construction price inflation

• resilience to natural hazards

• decarbonising our economy

• technology change

• shortage of existing infrastructure.

Section Three: What Infrastructure is Already Planned

The Infrastructure Commission already gathers and shares data on current or planned infrastructure projects through the National Infrastructure Pipeline. This data, alongside other information gathered by the Treasury or published by infrastructure providers, helps to paint a picture of investment intentions.

In this section, we discuss our approach to comparing the information on current investment we get from these and other sources of information, with the data we’re gathering about long-term trends from our infrastructure needs analysis. By comparing these, we can see where New Zealand may be over or under-investing in infrastructure, where there are trade-offs between different investment paths, and where we still have gaps in our knowledge.

In taking this approach, a National Infrastructure Plan can provide decision-makers with a guide for infrastructure investment.

Section Four: Changing the approach

This section discusses areas where change to our infrastructure system could get us better results. These include:

Our capability to plan and build. This means:

• improving our approach to investment management

• growing the infrastructure workforce and building project leadership capability

• finding ways to reduce the cost of our projects.

Taking care of what we have. This means

• getting better at asset management, or looking after our existing infrastructure

• improving our resilience, and preparing for greater disruption from shocks like natural hazards

• ensuring our infrastructure contributes to achieving a net zero carbon economy.

Getting the settings right. This means:

• making sure we have the right institutional settings to get the best from our infrastructure system

• considering the way we pay for infrastructure, including the potential for methods like congestion charging or volumetric charging which can both guide investment and help manage demand

• making sure regulation, like our consenting system, enables efficient and timely infrastructure development.