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Infrastructure blog

New Zealand’s general election – a defining moment for infrastructure

19 October 2023

In this Infrastructure Policy Watch, we highlight plans for New Zealand’s infrastructure following the National Party’s victory on 14 October 2023.

New Zealand’s general election – a defining moment for infrastructure
New Zealand’s National Party aims to create a 30-year infrastructure plan to address the country’s reliance on public debt to fund projects. Image credit: Shutterstock

New Zealand’s general election on 14 October has significant consequences for the future direction of the country’s infrastructure system.

After the National Party’s victory, the current Labour government will no longer be able to take forward its plans to ‘invest in infrastructure today to set New Zealand up for tomorrow’.

This included a commitment to invest $71 billion into infrastructure over the next five years to improve critical services, prioritising public transport networks.

Labour also planned to tackle New Zealand’s ongoing housing crisis by continuing to support its Infrastructure Acceleration Fund (IAF).

National Party plans

New Zealand’s victorious National Party has set out a framework for continuing to develop the country’s infrastructure.

It prioritises the establishment of a National Infrastructure Agency to ‘coordinate government funding, connect domestic and offshore investors with New Zealand infrastructure’, with the aim of streamlining funding, procurement, and delivery processes.

The National Party also plans to create a 30-year infrastructure plan to cut project costs and ensure more efficient infrastructure outcomes.

It claims this is needed to help address New Zealand’s over-reliance on public debt to fund its public infrastructure deficit of approximately $104 billion.

An infrastructure priority project list will follow, modelled on a similar list produced by Infrastructure Australia. This will allow policymakers to better determine where to allocate resources.

The ICE’s view

Driving growth through long-term planning

Long-term thinking enables governments to spend limited resources more effectively and plan a number of major projects at the same time. This is more cost-effective than operating on a project-by-project basis.

The new National-led government needs to adopt a long-term approach to infrastructure planning to unlock the full potential of New Zealand’s economy.

New Zealand’s first national infrastructure strategy, published by the New Zealand Infrastructure Commission in 2023, lays out a 30-year plan to achieve sustainable growth through infrastructure.

Some of its recommendations were picked up by the government as part of New Zealand’s 2023 budget, which points to the need for longer-term planning to navigate the pressures of rising inflation.

Building climate resilience is critical

The budget also increased funding for the recovery of areas affected by recent weather-related disasters such as the Auckland floods and Cyclone Gabrielle earlier this year.

This includes $300 million for ‘significant upgrades’ to roads for flood mitigation and slip prevention.

It’s imperative that the new National-led government continues to prioritise recovery, and lays out a long-term plan to develop climate-resilient infrastructure.

This will ensure that New Zealand is prepared to deal with increasing climate-related weather disasters going forward.

In an ICE Presidental Roundtable with the New Zealand Infrastructure Commission, global best practice surrounding managing infrastructure delivery costs were explored.

This discussion highlights the importance of correctly estimating the costs of project delivery at the start of a project.

The new government needs to consider this when building climate-resilient infrastructure to ensure project delivery is not jeopardised by spiralling costs.

How New Zealand can enable better infrastructure

The ICE-led Enabling Better Infrastructure (EBI) programme lays out the different types of funding and financing options available to ensure that governments steer away from the affordability trap.

When governments don’t accurately assess what they can afford, costs can become a limit to the success of a project.

New Zealand must not fall into the affordability trap as its communities depend on climate-resilient infrastructure at a time of increased weather-related events.

The National Party needs to explore the range of financing avenues available as part of its long-term infrastructure plan.

These can be found within the EBI report, which outlines the key steps governments need to take to establish robust, long-term infrastructure planning processes.

In case you missed it

  • Adina Nembhardt, EBI programme researcher at ICE