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Infrastructure blog

Infrastructure Policy Watch: New Zealand Budget highlights

01 June 2021

- New Zealand government increases infrastructure investment
- New Zealand Infrastructure Commission publishing vision and draft strategy on priorities

Infrastructure Policy Watch: New Zealand Budget highlights

In this fortnightly blog, ICE's Director of Policy Chris Richards looks at developing policy landscape for infrastructure, what decisions mean, and their implications, so that infrastructure professionals can play their part in shaping the discussion.

New Zealand Budget 2021 increases capital investment in infrastructure further

Following on from our report on Australia’s Federal Budget in the last Infrastructure Policy Watch, this week we look at New Zealand’s recent Budget. The headline announcements are that Budget 2021 takes the combined infrastructure investment for 2021-2025 to 57.3bn New Zealand dollars (NZD), up from 42bn NZD last year.

The Budget also included provisions for a new Housing Acceleration Fund, to increase the ‘pace and scale’ of new housing supply, as well as 300m NZD in extra capital for New Zealand’s Green Investment Bank.

Despite the headline figures, there are similar concerns to Australia in terms of ability to deliver. With unemployment falling In New Zealand and material costs rising around the world, short-term capacity challenges may impact on the Budget’s ambition for infrastructure at a time when the rest of the world is trying to do the same thing.

ICE’s view

As we said with Australia, countries need to turn to newer models of delivery to ensure ambition becomes a reality. Our Covid-19 and the new normal for infrastructure systems White Paper last year provided detail on some of the new approaches that could be employed.

New Zealand Infrastructure Commission consults on future vision

The New Zealand Infrastructure Commission has kick started a consultation on the vision that will inform its strategy to identify the infrastructure needed over the next 30 years. The draft strategy outlines three actions areas:

  • Building a better future: delivering infrastructure that is resilient and ready for change.
  • Enabling competitive cities and regions: ensuring the infrastructure system supports the needs of people and improves connections within New Zealand and overseas.
  • Creating a better system: a step change in planning, designing, funding and delivery of infrastructure.

Below each action area are a number of priority areas, outcomes and policy initiatives that the commission proposes need to be embedded to close the gap between between the infrastructure New Zealand needs and what it can afford.

The proposed priorities in the strategy include institutional and governance reform, particularly on planning; demand management through user charging, such as congestion pricing; supporting housing supply, supporting a zero-carbon economy and preparing for climate change; and greater rigour in the collection, transparency and use of data to support infrastructure performance.

ICE’s view

The commission’s strategy is a refreshingly comprehensive document on how to address the gaps between future need and current affordability, capacity and capability.

Many of the challenges outlined in the document are shared around the world and the commission’s work demonstrates the significant trade-offs and coordination that will be required to get the public the infrastructure they need.

In case you missed it...

Check back in a fortnight for the next edition of the ICE's Infrastructure Policy Watch. You can also sign up to ICE Informs to get a monthly digest of the latest policy activities from ICE, including calls for evidence to support our ongoing advice to policymakers.

  • Chris Richards, director of policy at Institution of Civil Engineers