Source: New Zealand Government
Good afternoon, everyone.
I’d like to thank Raveen, Geoff and the entire team at the Infrastructure Commission for their hard work on the National Infrastructure Plan.
I’d also like to acknowledge His Worship, Mayor Wayne Brown; and Rt Honourable Helen Clark.
It’s great to see you here, because fixing New Zealand’s infrastructure system is going to take everyone, from government, to opposition, mayors, local authorities, infrastructure providers, and – quite frankly – all New Zealanders.
Today, I want to talk about:
- the realities of our poor performing infrastructure system
- work the Government has already done to fix the basics of our system – lots of which aligns with the independent Commission’s Plan, and
- building bipartisanship on the Plan.
Then, I am excited to announce decisions Cabinet has made to strengthen assurance for central government-funded infrastructure, ahead of our formal response to the Plan later this year in June.
This isn’t our first Plan, and it’s time to get on with it
Some of you may be thinking – “couldn’t you have waited a few more months before making these changes.”
Well, no.
I have been clear to officials that I want to get on with eminently sensible, evidence-backed recommendations in the NIP.
It’s important to note that we have been here before. This is not New Zealand’s first Infrastructure Plan. It isn’t even our second or third.
We had plans in 2010, 2011, and 2015.
Some recommendations in these older plans are identical to those in the Commission’s Plan, like making better use of pricing tools and user-pays.
It’s clear previous Governments of all flavours have put issues like poor infrastructure performance, unaffordable housing, and low productivity in the too-hard basket.
Even worse – some Governments have irresponsibly thrown billions at problems or projects instead of focusing on fixing the fundamentals.
But I’m not going to do that.
And that’s not what this Government is about.
Achieving genuine economic prosperity is the great challenge driving this Government.
New Zealand is nowhere near as wealthy as we sometimes like to think we are.
Currently, our GDP per capita, on a purchasing power parity basis, is about the same as Slovakia, Lithuania, and the Czech Republic. Now, they went through 40 years of communism.
Our great challenge as a country is how we lift our long run growth rate and productivity – which are main determinants of prosperity.
And that is what this Government is tackling through fixing underlying systemic failures that have accumulated and festered over the last 10 to 30 years.
We are putting in a new planning system to replace the failed Resource Management Act once and for all. This is projected to save $13.3 billion in administrative and compliance costs over the next 30 years and increase GDP by at least 0.56 per cent annually by 2050.
Our new planning system is a once-in-a-generation opportunity unleash growth. We are making the most of this by progressing Local Government reforms, and establishing the Ministry of Cities, Environment, Regions and Transport (MCERT) – to ensure both local and central governments are easier to work with.
19 projects have been granted consent under our Fast-Track legislation representing thousands of jobs and billions in investment.
In housing, we have found a compromise on PC120 that enables abundant development opportunities and allows our biggest city to grow. And, importantly, grow in the right areas that enjoy broad support like around train-stations, busways, and the CBD.
The evidence officials have provided to me suggests that landing an Auckland plan where you get upzoning around rapid transit stops and central city intensification, will be one of the most significant things we can do, not just for housing affordability, but economic prosperity more broadly.
In education, we are reversing the 30-year experiment on our kids of pretending that basic knowledge and facts don’t matter. We’re restoring standards, teaching the basics, and focusing on achievement. Minister Stanford has also driven the average cost of a classroom down from $1.2m to about $620k.
We are reversing wealth destructive earthquake prone building legislation, opening-up competition in building materials, and tackling joint and several liability.
We’re finally sorting the Holidays Act. And major reforms are underway to employment law and health and safety.
Now, these changes don’t happen overnight, nor are their benefits felt immediately.
This approach isn’t about ‘sugar hit’ interventions, and, although it’s not always popular, it’s the right thing to do.
The changes we are making are foundational, beneficial shifts to our economy that we should have implemented years ago. They will set the country up for long-term success.
I truly believe that if we follow through, the 2030s will be New Zealand’s decade.
I came to Parliament to help make our country more prosperous and wealthier, and for all Kiwis to have the opportunities that come from that prosperity.
It’s important we get on with fixing the infrastructure system and fixing this country.
The Plan is a wake-up call
Now, I want to get into the findings of the Plan.
Even before becoming Minister for Infrastructure, I regularly heard that: “what New Zealand needs is a long-term infrastructure plan that transcends political cycles”.
I agree – that’s why creating a 30-year Plan was a key campaign commitment for the National Party in 2023.
Shortly after we came into government, I asked the independent Commission to begin work on this Plan. And now, it’s delivered.
I’d like to again thank Raveen, Geoff, and the team for their hard work.
This is not the Government’s Plan; it’s New Zealand’s Plan.
This independence is crucial because it will take a sustained effort across governments to turn the infrastructure system around.
I believe the Plan is a wake-up call for many New Zealanders.
The Commission has made a compelling case for change – we face significant challenges.
- Firstly, we have an aging infrastructure stock as assets built in the post-war investment boom of the 1950s to the 1990s wear out.
- Secondly, we have a significant backlog of maintenance and renewals.
- Thirdly, our demographics are changing, and we have an aging population.
- Fourthly, the risks and exposure we face from natural hazard events and global shocks will continue to increase. This is a challenge all New Zealanders have felt acutely over the past few months – whether that be through the conflict in Iran, leading to the increased fuel prices and further cost-of-living pressure; or the series of extreme weather events we have faced.
At the exact time we must face all these challenges, we also must face the reality that the systems we currently use to plan, fund, build, and maintain infrastructure are underperforming.
New Zealand is in the top 10% of the OECD for infrastructure spending, but we are in the bottom 10% for what we get for our spend.
We rank fourth to last in the OECD for asset management.
Half of all capital-intensive central government agencies have reported that they do not have robust asset registers or adequate plans for looking after existing infrastructure.
And around half of all proposals for investment in the last five Budgets did not have complete business cases.
On top of this, Central Government agencies often don’t follow rules on basic investment management.
Since coming into Government, I have also been concerned about the quality and completeness of information Ministers receive to make billion-dollar decisions.
Everyone experiences the flow on effects of our underperforming system including bad value for taxpayer money; funding gaps; over-scoped, gold-plated, palace projects; delays; cost overruns, and – often – worn-down and failing assets that don’t do their job.
I can rattle off too many examples of asset failures like leaky police stations, mouldy military homes, rotting classrooms, and in 2018, a hospital with raw sewage seeping into the asbestos-filled walls.
This is not what New Zealanders expect, and government needs to do better.
Because, we are fast approaching these great, complex infrastructure challenges, but we can’t even take care of BAU.
I’m calling this the “infrastructure twin headwinds”.
On one front we have exogenous challenges – things that we can’t easily change like our aging infrastructure assets or aging population.
Then, on the other front we have underperforming systems and processes for how we plan, fund, build, and look after our infrastructure – which we can and will change.
Getting this right is a must, not a nice to have, if we are serious about growth and lifting the prosperity and living standards of all New Zealanders.
And I’m serious.
Fixing the basics
The Government has spent a lot of time in the last two years fixing the basics of our infrastructure system.
It’s encouraging that many of the Commission’s Top 10 Priorities reflect work already underway by the Government.
I’ll quickly touch on some of those.
Lifting hospital investment for an ageing population – Health New Zealand now has a long-term capital infrastructure plan, and this Government is providing record investment in both capital and maintenance spending for health.
Implementing time-of-use charging and fleetwide road user charges – Legislation enabling time of use pricing was passed last year, and the government is working with Auckland Council on scheme options. We have also begun the transition to Electronic Road User Charges (E-RUC) across the transport fleet.
Prioritise adequate maintenance and renewals – Last year, the Government started work on a comprehensive asset management work programme. Phase 1 of the programme has already provided practical tools and guidance to agencies so that they can up their game.
Phase 2 is about driving more fundamental change and is being informed by recommendations in Plan like those around legislating for proper asset management plans, asset registers, and performance reporting – as well as having those products independently audited.
Additionally, in Budget 2025, we gave education significant ongoing additional depreciation funding to maintain and upgrade schools.
Commit to a durable resource management framework – The Planning Bill and the Natural Environment Bill are in the House. We know some changes are needed to reflect this Government’s policy ambitions and to get the Bills right – and we are working away on that. We have also provided many briefings to the opposition, so that, where possible, we can build consensus.
Commit to upzoning around key transport corridors – Through what seems like many trials and tribulations, the Government has landed a compromise on PC120 that enables abundant development opportunities, gives Auckland Council greater flexibility, and allows our biggest city to grow. Importantly, it ensures Auckland upzones and grows around key transport corridors like the 15 train stations that benefit from CRL, busways, and other rapid transit hubs.
These are also the areas that benefit from significant investment from Auckland Council and Watercare – including the central interceptor project, which will be finished later this year.
I’m grateful to have an advocate of housing and urbanism in Mayor Wayne Brown who backs density like I do.
On top of this, the Government has done a lot of work to improve data and transparency on infrastructure through strengthened Quarterly Investment Reporting.
Now, each quarter we know key metrics, like how much spend is going out the door and the ratio of agencies’ actual versus planned expenditure.
New Zealand has long struggled to turn funding into construction quickly, and the market has made it clear that they want higher quality information on upcoming construction activity.
The improved QIR now makes it clear which agencies are behind.
The Minister of Finance and I have stressed to Portfolio Ministers the need for accurate reporting and forecasting.
It’s early days, but this year we are already seeing a reduction in underspends. And we will continue to closely monitor this.
All of this is a good start, but there is more work to do.
Bipartisanship on the Plan
I know many people are keen to see more bipartisanship in infrastructure. To the extent that that’s possible, I’m up for it.
That’s why all parties in Parliament were offered briefings from the Commission on the Plan, and why we held a Special Debate on the Plan once it was finalised.
I also intend to engage with other political parties in Parliament before finalising the Government’s formal response in mid-June.
I can’t claim to speak for all parties, but I suspect that almost all projects underway right now are supported by everyone.
It’s the high profile and high-cost disagreements that make the headlines. But it’s the low profile and often low-cost projects that make New Zealand.
I’ve long held the view that we should move away from the rhetoric of needing a bipartisan pipeline and instead build bipartisan consensus on the idea that governments of all colours should use best practice to plan, select, fund and finance, deliver, and look after infrastructure.
Problems with infrastructure assurance
Since coming into Government, the Minister of Finance and I have been concerned by the quality of information provided on infrastructure including what we own and its condition, the forward investment pipeline, assurance on individual projects and programmes, and agency performance.
When it comes to assurance, there are multiple project review tools across the investment system that serve slightly different purposes and have different assessors, information requirements, reporting formats, and outputs.
However, none of these tools provide Ministers with unapologetically strong, clear, and actionable assurance that is focused on substance (as opposed to bureaucracy), so that we can make well-informed investment decisions.
We want experts to give us their free and frank; is it a ‘yes’ or a ‘no’.
Instead, it seems the modus operandi is to let investments move through the system and let bad projects gain momentum – until it’s too late – wasting tens or hundreds of millions of taxpayer money on Business Cases and early design and feasibility work for phantom projects.
Multiple assurance products like the Infrastructure Priorities Programme and Gateway Reviews are also causing duplication and overcomplication for both Ministers and agencies.
Put simply, there are too many assurance tools, but none of them do what is needed – support ministers to make good decisions.
This is alarming considering its Ministers who ultimately make these significant investment decisions. Its clear change is needed.
Today’s announcement on strengthening assurance
So, today, I can announce that Cabinet has agreed to strengthen assurance for central-government funded projects, with a focus on infrastructure.
This is being progressed through five changes:
Firstly, on 1 November 2026, we will transfer responsibility for providing external investment assurance on central-government-funded infrastructure proposals from the Treasury to the Infrastructure Commission. This will allow Government to leverage the Commission’s expertise and independence.
This means the Commission will analyse all major infrastructure investments funded by central government including hospitals, schools, prisons, courthouses, and more.
Treasury will continue to lead policy across the Investment Management System and provide holistic advice to Ministers on investments – including on prioritisation, sequencing and fiscals.
I know people will ask if this independent assurance applies to NZ Transport Agency projects.
The answer to that is yes, under certain circumstances. Independent assurance will apply to NZTA where funding for a project is sought from central government, outside of the National Land Transport Fund (NLTF). This goes for other entities too.
Secondly, Government has agreed to establish a formal assurance function for asset management and long-term investment plans, which will apply to capital-intensive central government agencies and other entities. The Commission will be responsible for running the ruler over these plans when it comes to infrastructure, and the Treasury will be responsible for policy.
Thirdly, going forward, External investment assurance will be focused on what Ministers need to make good decisions on behalf of New Zealanders.
This means simplifying the external assurance space by consolidating existing products like the Commission’s Infrastructure Priorities Programme (IPP) and Treasury’s Gateway Review – taking the best elements of both.
Fourthly, for all Business Cases seeking Cabinet endorsement, Treasury will provide Ministers with a standardised “Fitness Assessment” that has holistic, high-quality information on proposals. The assessment will also provide Minister strategic advice by putting the project in context of the entity’s past performance and the fiscal landscape.
Lastly, to test the quality and credibility of investments, the Infrastructure Investment Minister Group will review High-Profile-High-Risk investments, and Long-Term Capital Plans before they go to Cabinet.
These changes directly respond to and accept recommendations 7, 8, and 9 in the Plan under the theme of, prioritising the right projects.
For Ministers, these changes mean they can confidently say ‘yes’ or ‘no’ to projects and long-term capital plans – early – knowing that their decisions are informed by strong evidence and independent, expert advice.
For taxpayers, these changes mean more projects that meet their needs and represent good value for money. Stronger assurance can also be a tool for the public to hold Ministers to account.
If a government funds a project that did not receive a favourable assessment, then that’s a good basis for questions and scrutiny.
For the sector, these changes will mean less stopping and starting of projects as good projects rise to the top, and unrealistic, unfunded projects quickly sink to the bottom.
Of course, central government agencies will need to up their game on asset management plans, asset registers, data collection and reporting, and monitoring the condition of assets, long-term investment plans – which likely means getting more capacity and capability in these areas.
The NIP recommends further changes here – watch this space for the Government’s formal response in June.
Now, I’ve heard concerns from agencies about “lack of funding” for these functions, but from my perspective things like good asset management is BAU. If agencies can’t fund it out of baselines, then they shouldn’t be infrastructure providers or asset owners.
Central Government holds regulated utilities, and local government to these standards, certainly a higher standard than it does itself, and it’s time that changed.
Fuel crisis and transport
Before wrapping up, it would be remiss of me not to address the Strait of Hormuz sized elephant in the room.
The conflict in Iran has obviously impacted the transport portfolio.
Top of mind for me are a couple of things including Public Transport (PT), and the Roads of National Significance programme.
On PT – 80% of New Zealand’s bus fleet is diesel. So, in the context of diesel prices going through the roof, this has a flow on effect to the costs of providing PT.
We are working closely with Public Transport Authorities around exactly what those cost impacts are, and whether the Government needs to provide additional support.
On the revenue side of things, people are driving less – price is working, price is the great rationing mechanism – and people are buying less fuel, so less revenue is flowing into the National Land Transport Fund.
I’ve also been upfront that the 12-cent increase in petrol tax set for 1 January 2027, is unlikely to go ahead.
This combination will affect funding and delivery timelines for future transport projects. That’s just reality.
Before the conflict, we were already in a challenging and constrained funding environment as outlined in the Plan. The conflict has made a difficult situation worse.
We are working hard on a prioritisation exercise.
There are 17 Roads of National Significance we are committed to, plus progress on the Second Harbour Crossing, plus progress on projects like North-West Rapid Transit and the Airport to Botany Busway.
These can’t all be built at once – that was never going to happen. And they can’t all be funded at once. So, they were always a long-term pipeline of projects.
So, we are just working on a prioritisation exercise around what the sequencing looks like over the next 20 years.
Some projects are ready to go, others will be ready in the next three to five years, and others are off into the distance.
What I hear from the sector and the public, is that they want a prioritised sequence out over the next few years. Part of the problem with this, is that we haven’t had a pipeline.
And that’s what I am working very hard on and will have more to say on it shortly.
Conclusion
To finish, I’d like to thank the Infrastructure Commission for inviting me to speak and to congratulate you all on the Plan.
It was a massive effort, and from what I can tell it has been received well across government, the sector, and the public – which reflects your expertise, high-quality insights, and trust you have built since your establishment in 2019.
I look forward to formally responding to the Plan in mid-June. Then, it will be up to all of us to turn the Plan into reality.
Thank you.
