A fundable path for infrastructure investment

• New Zealanders benefit from investments made by past generations.
• While our infrastructure compares well to peer countries in some areas, we still face quality and usage issues, such as high water consumption, frequent power outages and poor road safety.
• We need to continue investing to ensure our infrastructure is fit for the future, but we can’t afford everything, so trade-offs are necessary.
• To guide these trade-offs, the Commission has developed ‘forward guidance’ to set out a sustainable level and mix of infrastructure investment.
• This forward guidance lays out a system-wide view that supports a strategic approach to investment across sectors.
• We forecast future demand for infrastructure by considering the need to renew and replace existing infrastructure assets and respond to demographic changes, economic growth and climate change.
• Our analysis suggests demand for capital investment will increase from around $20 billion today to slightly more than $30 billion by the 2050s (in 2023 NZD terms).
• Renewal and resilience investment will become relatively more important as existing assets age, growth slows and climate pressures intensify, requiring a shift in how and where we invest.
• We have choices about how we fund and finance this investment. But regardless, New Zealanders will have to pay. Some costs will be met directly by households, through taxes, rates or user charges. Others will be met by businesses and passed on to local or international customers.
• More infrastructure investment will require more workers. Changes are needed to ensure that we develop an infrastructure workforce that has the right capacity and capability to deliver on future investment demands.
• Central and local government need to build their capability to lead and deliver complex infrastructure projects successfully.
• Asset owners need to use sophisticated project planning to manage uncertain futures. For instance, project planning can build in ways to keep options open rather than making large, irreversible commitments that may not pay off.