Improving central government infrastructure investment and asset management

• Central government agencies are responsible for around half of infrastructure investment and assets. These agencies build and maintain many of the infrastructure assets needed to provide services to New Zealanders.
• Central government infrastructure is funded from revenue collected by the state with finance and funding administered through the annual Budget together with other specific laws.
• The Treasury’s Investment Management System helps to review and advise on central government infrastructure investment decisions as part of the Budget.
• In developing the Plan, we’ve looked at how New Zealand’s Investment Management System performs against the International Monetary Fund’s Public Investment Management Assessment framework, which is a best-practice framework for assessing public sector investment and asset management.
• Our findings show that we can improve long-term investment planning. As part of that, we need to ensure that Budget decision-making is linked to agency investment planning.
• Moving to a multi-year budgeting approach could be helpful too, because more forward visibility over investment funding would aid agencies in establishing efficient multi-year supply and procurement arrangements.
• Good information can also build confidence in projects. Projects with robust business cases are less vulnerable to cost overruns and delivery delays. About half of the investment proposals received by central government agencies, however, are submitted for Budget funding without robust business cases.
• For long-term planning to be successful, we need to ensure that projects are progressed in a methodical and consistent way, and risks are well managed through the investment lifecycle. This is important for ensuring that decision-makers and the public can have confidence in new investments.