Source: New Zealand Government
Good morning,
I would like to join the Prime Minister and Minister of Finance in extending a warm welcome to you all.
And I’d like to say a big thank you for being here.
This Summit is about showing you that New Zealand is open for business, we are going for growth, and we are a safe and strong country to invest in.
Over the next two days, we will be showcasing our infrastructure pipeline, our exciting growth sectors, and the Māori economy.
I have the great privilege of being the Minister for Infrastructure alongside a few other roles.
And this morning, I want to talk to you about the New Zealand Government’s vision for infrastructure.
We were elected to be a government of infrastructure.
We know that we have a big infrastructure deficit and addressing it is critical to boosting growth and improving our productivity.
Over the past 15 months, we have been laying the groundwork to create a highly performing infrastructure sector.
We’ve laid out ambitious plans to remove red tape, improve funding and financing, and to make sure the government is a much better client.
Role of private capital
We are also determined to attract more private capital, capacity, and capability into our infrastructure system.
Because we can’t unlock our potential without the private sector.
Private construction firms build our infrastructure. This is well understood by the public.
What is less visible is the important role private capital plays in public infrastructure.
Under the right contractual and regulatory frameworks, private capital is hugely beneficial for our system and, therefore, beneficial for New Zealanders.
Private capital in public infrastructure can:
- introduce competitive tension,
- encourage efficiency, innovation, and disciplined project management,
- boost local capability and capacity,
- incentivise on-time, on-budget delivery,
- incentivise good asset maintenance and consistent level of service, and
- lift accountability.
We only have to look at the Ultrafast Broadband rollout – where New Zealand is among the top countries in the world for fibre coverage – and the Puhoi to Warkworth State Highway to know that private capital can deliver great outcomes for Kiwis.
To achieve more of these outcomes more often, our objective is to broaden the funding base for projects and utilise private capital, where efficient.
This, along with other changes to the infrastructure system, will help get New Zealand ahead so that we can grow our economy, create jobs and opportunities, and raise our standard of living.
Infrastructure is a key enabler for growth and lifting our standard of living
New Zealand has incredible potential, and I believe that we can be so much wealthier and more productive than we are today.
Infrastructure is critical for the wellbeing of people and the prosperity of nations.
Infrastructure also represents some of our longest-lived assets. In fact, some bridges in our highway network have been around since the 1800s.
New Zealand has more than 2,500 public schools, 40 public hospitals, and more than 96,000 kilometres of road.
In 2022, our infrastructure assets, excluding land, were worth about $287 billion.
We can thank past generations for their sustained investment in infrastructure.
We want our grandchildren, and their grandchildren to thank us too. That’s why delivering infrastructure for the future is a key part of this Government’s plan.
New Zealand has a proud history of building for the future
Before I outline the changes we are making to New Zealand’s infrastructure system, I want to share two stories from our past.
Our geography, small size, and isolation have long presented challenges, but we have always been up for the task of finding innovative and ambitious ways to deliver the infrastructure our country needs.
High Voltage Direct Current Cable – Cook Strait Cable
Let me start with the Cook Strait Cable.
In the 1960s, New Zealand had a problem. The need for electricity in the North Island was growing, but most of the generation opportunities were in the South Island.
We needed a cable to connect the two.
Instead of letting something as small as the Cook Strait stop us, we used world leading engineering and built a High Voltage Direct Current, or HVDC link between Benmore, and Lower Hutt – the city I am proud to represent as a Member of Parliament.
That’s 610 kilometres of cable.
When it was built in 1965, our HVDC submarine cable was the world’s largest and longest of its kind.
This project was ahead of its time and allowed New Zealand to:
- better optimise the national grid,
- provide security of electricity supply, and
- make early use of renewable energy – something we are very lucky to have an abundance of here.
Transpower, New Zealand’s National Grid owner and System Operator, is planning to replace the Cook Strait Cables at the end of the decade and has secured global cable supplier Prysmian to do this.
For 60 years now the Cable has helped power New Zealand, and it remains a true example of Kiwi ingenuity and ambition.
Auckland Harbour Bridge
The second story I would like to share is about the Auckland Harbour Bridge.
66 years ago, the North Shore – about 10 kilometres north from where we are sitting right now – was a sleepy area with a population of around 50,000 and was only accessible from Auckland via a 50-kilometre drive, or by ferry.
This all changed with the construction of the Auckland Harbour Bridge, which began in 1955.
Hundreds of workers were needed, including many brought over from England.
In 1959 the Bridge opened, with toll booths to help recoup the cost.
Demand was massive and population on the North Shore boomed. It is now home to over 240,000 people.
Only a decade after the bridge was built, we added huge steel extensions, or clip-ons, onto the wide concrete piers.
The clip-ons were built in Japan, shipped to New Zealand, and attached to the bridge – doubling the number of lanes from four to eight, which remain in use today.
Even though this bridge was built 66 years ago, there are still lessons we can learn from it:
- first, people who benefit from infrastructure should help pay the cost of it,
- second, investment in infrastructure can unlock significant growth, and
- third, it’s wise to build infrastructure that is future-proofed and that can adapt to change.
These two stories remind me that New Zealand has built some world-leading, innovative, and growth-enabling infrastructure.
We have built tunnels through mountains, cables across the sea, and dams that power hundreds of thousands of homes.
And we will build on this legacy.
Future challenges
But, today, New Zealand, like many other countries, faces new challenges like a growing and aging population, congestion, more frequent hazard and extreme weather events, a backlog of asset maintenance, and project cost blow-outs.
By 2050, If we keep doing things how we are now, New Zealand is expected to have an infrastructure deficit of around $210b.
We cannot tackle these challenges by continuing the status quo – so, once again, New Zealand has to innovate.
And we are still up for the job.
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, select, fund and finance, build, and look after our infrastructure.
That’s why we are here with you today – to showcase our more enabling system, and to learn from and partner with you to deliver the infrastructure New Zealand needs.
My priorities as Minister for Infrastructure
Last 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:
- Establishing National Infrastructure Funding and Financing Ltd – which we did in December last year.
- Developing a 30-year National Infrastructure Plan.
- Improving infrastructure funding and financing.
- Improving the consenting framework.
- Improving education and health infrastructure.
- Strengthening asset management.
These priorities are in response to what the coalition Government has heard from industry and infrastructure experts, both in New Zealand and overseas.
National Infrastructure Funding and Financing Ltd
Let’s start with National Infrastructure Funding and Financing Ltd, or NIFFCo.
On 1 December 2024, we established NIFFCo – a Crown-owned company. When you decide to join us in transforming New Zealand’s infrastructure, these are the people you will work with.
Allow me to introduce you to the Chair, Mark Binns, and the Chief Executive Officer, Graham Mitchell. They are here for the next two days and are keen to chat to you about what they do.
But, at a high-level, NIFFCo that has three functions:
- Its first function is to act as the Crown’s ‘shopfront’ to facilitate private sector investment and interest in infrastructure – this includes receiving and evaluating any Market Led Proposals, or Unsolicited Bids.
- NIFFCo’s second function is to partner with agencies, and in some cases, local government, on projects involving complex procurement, alternative funding mechanisms and private finance – including Public Private Partnerships (PPPs).
- Its third function is to administer central government infrastructure funds.
NIFFCo will help unlock access to more capital for infrastructure and give the private sector a clear and knowledgeable Government-side partner to work with on projects and transactions.
So, if you want to put forward a project, are looking for an opportunity to invest in New Zealand infrastructure or want to partner with Government – NIFFCo is open for business.
NIFFCo will also lift the government’s commercial capability 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, PPPs, developer levies, beneficiary levies, concessions, or other value uplift mechanisms.
When we established NIFFCo, we also clarified roles and responsibilities of other entities in the Crown’s Infrastructure system. So, broadly:
- The Infrastructure Commission is focused on long-term strategy and planning and is the Government’s independent advisor on infrastructure matters.
- Alongside its economic and fiscal responsibilities, in the infrastructure space, the Treasury is primary adviser to me as Minister for Infrastructure, and the steward of the government’s Investment Management System.
- Crown Infrastructure Delivery is mandated to deliver infrastructure on behalf of government agencies that don’t deliver infrastructure as their “Business as Usual”, or for agencies who would like to use centralised delivery capability.
On top of this, we are establishing, Invest New Zealand, who will work with NIFFCo and others to support our economic growth objectives. Invest New Zealand’s role will include attracting Foreign Direct Investment by marketing New Zealand overseas as an ideal location for business and innovation.
The Minister for Trade and Investment, Todd McClay will talk to you more about this tomorrow.
Developing a 30-year National Infrastructure Plan
Now, let’s move to my second priority, the 30-year National Infrastructure Plan.
The industry has asked for a long-term plan and pipeline so that they can invest in people and equipment.
We have heard them, it’s the right thing to do, and we are doing it.
The New Zealand Infrastructure Commission has been tasked with developing the independent plan by the end of 2025.
It 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 have and what need.
I want the Plan 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.
There are four key components of the Plan.
The first is the Infrastructure Needs Assessment. The Needs Assessment will compare the long-run drivers of infrastructure demand – like population growth, aging assets, and natural hazards – against what we have now to identify our needs.
But we also have to be realistic about willingness to pay, because we can’t afford to do everything –
So, our plan is to select the package of projects that delivers the most benefits within our budget constraints.
The second component is strengthening the existing National Infrastructure Pipeline. The Pipeline will outline New Zealand’s infrastructure investments intentions over the next 10 years – in the public and private sector.
The Commission’s Pipeline already has 108 contributing organisations and includes over 7,500 projects, that combined, represents over $204 billion in value.
The third component is the Infrastructure Priorities Programme or the IPP, which is a structured, independent review of unfunded infrastructure projects and problems.
I’m really excited about the Priorities Programme. The IPP 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.
The fourth component of the National Infrastructure Plan is priority reforms, which will outline non-investment interventions to improve the way we select, invest in, deliver, and look after infrastructure.
To summarise, this Government and future governments can use the National Infrastructure Plan to create a legacy that we can all be proud of.
All political parties have been offered a briefing, and I am confident that the Plan will be a solid step towards bipartisanship for infrastructure.
The Plan will be provided to me and published in December 2025, and the Government will then respond to it in 2026.
Improving infrastructure funding and financing
Now, let’s talk about my third priority, Improving infrastructure funding and financing.
Public infrastructure in New Zealand has historically been primarily funded by taxpayers or ratepayers.
But our heavy reliance on this blunt approach is not serving New Zealand well and has led to perverse outcomes including congestion, run-down assets, and the unresponsive provision of enabling infrastructure – contributing to unaffordable housing.
Infrastructure Funding and Financing Framework
In December last year, Treasury released its new Funding and Financing Framework.
This Framework provides guidance to agencies that they should, in the first instance, seek user or beneficiary pays to fund new infrastructure projects rather than defaulting to taxpayer money.
I expect proposals from sectors such as transport, water, energy, housing, and adaptation to demonstrate how user or beneficiary pays can contribute towards funding requirements.
Greater utilisation of user-pays will provide greater opportunities for the private sector to participate in Crown’s investments.
We want to use the government’s Balance Sheet more strategically and apply good commercial disciplines when deciding how to financially support a proposal – essentially providing “just enough support” to make proposals feasible.
This will mean we can deliver more projects, and channel more support to sectors where it is appropriate for the Crown to be the primary funder, like in health and education.
This Framework sits alongside wider work we have done to broaden and enhance funding and financing tools available to the Crown and councils.
New funding and financing tools
Just two weeks ago, I announced five changes to New Zealand’s funding and financing toolkit for infrastructure – I won’t cover all of these.
But the most relevant to people here, is that we are enabling ‘beneficiary and development levies’ through the Infrastructure Funding and Financing (IFF) Act to be used for major transport projects, such as those delivered by the New Zealand Transport Authority.
The IFF Act allows the creation of a Special Purpose Vehicle to raise finance for projects, where the cost is repaid through a levy charged to properties that benefit from a project over a period of about 20 to 30 years – a common model overseas.
This change has the potential to kickstart our embrace of Transit Oriented Development and will unlock a new funding stream for city-shaping projects.
Refreshed Public Private Partnership (PPP) Policy
To match our more commercial Funding and Financing Framework, and enhanced toolkit – we also knew we would need to modernise the Crown’s policies and contracting models, particularly in the PPP space.
So, after extensive engagement, in November last year, we released a Blueprint to the market outlining how the government will approach future PPPs.
I am very pleased that Labour Spokesperson for Finance, Hon Barbara Edmonds, who is here for the summit, wrote a foreword for the document.
There are several key elements in the refreshed Blueprint for PPPs:
- A more practical approach to risk transfer
- Guidance for agencies on bid cost recognition
- Enhancing the Interactive Tender Process
- Allowing reasonable price validation to occur during the procurement process
- Improving the process for managing claims and dispute resolution, and
- Increasing the capability and resourcing of the Crown so that we can be a better client.
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.
The new PPP Blueprint sits alongside new Strategic Leasing Guidance, and Guideline for Market Led Proposals.
Improving the consenting framework
Now, let’s move onto my fourth priority, improving the consenting framework.
Currently, our consenting landscape is an incredibly expensive handbrake on growth.
New Zealand’s resource management system governs how we interact with the environment. And for many years, it has been considered broken.
It achieves the worst of both worlds: it stifles development and fails to protect the environment. In many ways, our currently planning system is one of the root causes of our infrastructure deficit.
So finally, we are taking action.
We are undertaking a large reform programme: banking some quick wins now so that some significant projects can benefit from a more enabling system immediately, as well as replacing the entire system, which we plan to have introduced to Parliament mid-this year.
Our new system will be effects based and embrace standardisation, meaning fewer and faster consents.
The driving force behind these reforms is practical enablement of development. It is absolutely possible and necessary to build the infrastructure New Zealand needs and protect the environment at the same time.
To get things moving in the meantime, last year we introduced the Fast-track Approvals Act – which officially opened last month.
This regime allows infrastructure with significant regional and national benefits to access a quicker and easier pathway to get approval to build.
It is a one-stop-shop to access approvals, resource consents, and permits across nine different Acts, all in the one process.
We expect the process to take as quick as six months, depending on the complexity of the project.
It is a game changer for economic growth, and interest has been high.
The Government listed 149 projects in the Act itself, fast-tracking them in the fast-track process. More projects can be referred into the process too.
These 149 projects represent up to 55,000 new homes; 180 kilometres of new road, rail, and public transport routes; three gigawatts in additional generation capacity; and multiple mining and aquaculture projects.
Alongside our Resource Management Act, the Public Works Act will also be overhauled – and I will talk a bit more about this during my Transport speech tomorrow.
Development opportunities in New Zealand are abundant – we just need to unlock them.
Improving education and health infrastructure
I won’t go into too much detail of my, fifth priority, improving education and health infrastructure.
My colleagues – the Minister for Education, Erica Stanford, and the Minister for Health, Simeon Brown, will speak to you later today on the great work they are doing in their respective areas.
I will just quickly say that this government is moving towards:
- More standardised, repeatable designs,
- More modular and staged builds, and
- More strategic procurement – including by using a panel of contractors and partners for large programmes or packages of work.
Strengthening asset management
My sixth, and final priority is strengthening asset management.
Last year, 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.
The Infrastructure Commission tells me that 60 cents of every dollar spent on infrastructure should be going towards asset maintenance and renewals.
I’m determined to improve asset management.
So, to drive change, shortly, I’ll be exploring options around long term capital planning, asset management plans, mandatory reporting on standardised metrics, upskilling opportunities, accountability for poor performance, minimum standards, and stronger regulatory scrutiny and monitoring for government agencies.
Everything is on the table.
Conclusion
Let me conclude by thanking you again for being here.
New Zealand is open for business, we are going for growth, and we are worth investing in – particularly in infrastructure.
If you can’t tell, I am passionate about getting the underlying system settings right.
Our Government’s vision for infrastructure is simple: Enable the provision of infrastructure that will get New Zealand ahead so that we can grow our economy, create jobs and opportunities, increase productivity, and raise the standard of living for all Kiwis.
As I said at the start, New Zealand has built some world-leading, innovative, and growth-enabling infrastructure.
We can thank past generations for their sustained investment in infrastructure.
I want to build on this legacy, and I want our grandchildren, and their grandchildren to thank us too.
I look forward to talking to many of you over the next two days about achieving New Zealand’s infrastructure vision.
Thank you.
MIL OSI
