Our future prosperity depends on infrastructure. New Zealand has built extensive networks of roads, water pipes and power lines – as well as social infrastructure like hospitals, schools and courts – that underpin the economy and support our way of life. But we are up against formidable challenges. Building and maintaining infrastructure is becoming more expensive and climate change is making the risks we face from natural hazard events more severe. Additionally, much of what we’ve built in past decades is wearing out and needs to be replaced.

We spend a lot on infrastructure, but we don’t always get good value. New Zealand invested around 5.8% of gross domestic product (GDP) annually on infrastructure over the past 20 years, making us one of the top spending countries in the Organisation for Economic Co-operation and Development (OECD).¹ Yet we rank towards the bottom for efficiency, or ‘bang for buck’. Having a small population spread across challenging terrain doesn’t help, but we also put hurdles in our way. Consenting alone costs infrastructure projects $1.3 billion each year.² Too often, projects are announced without going through a proper planning process, and maintenance gets routinely deferred in favour of the ‘new and shiny’.

Fiscal and demographic trends will make it harder to address our challenges. If New Zealand doesn’t change course, net Crown debt is forecast to be 200% of GDP by 2065, or $237,900 per person. The ratio of working-age people to those aged 65-and-over will be closer to two-to-one by then, meaning less income tax revenue and more demand for healthcare.³ Many local authorities are also approaching their debt limits. These pressures mean we cannot afford to build our way out of every problem. We need to get smarter about how and where we invest.

New Zealanders want us to take better care of what we’ve got. Through our public engagement, respondents overwhelmingly emphasised the need for improved maintenance and long-term planning of core infrastructure, particularly hospitals, water supply and transport. Respondents highlighted the importance of climate resilience and the need to consider environmental, social and economic outcomes when delivering infrastructure.

The National Infrastructure Plan is a framework to sustainably deliver the infrastructure New Zealand needs over the next 30 years. The current system isn’t working as it should. The public and the construction sector are becoming increasingly sceptical about announced project timeframes and budgets due to frequent cost overruns and delays. Decision-makers don’t have access to the information they need to run the ruler over competing investments. Many central government agencies don’t know enough about the state of their existing infrastructure, or have a plan to look after it for the long term. Fixing the foundations of the system will create the conditions for better sectoral and regional investment planning, setting New Zealand up to better meet today’s needs and those of future generations.

Getting it right matters now more than ever. New Zealand is planning more projects than we can afford to deliver. The National Infrastructure Pipeline has information on 11,925 projects worth $275 billion in planning or delivery, spread across all regions (Figure 1). Smaller projects worth less than $100 million make up 98% of the Pipeline by number, but a handful of unfunded megaprojects account for a large share of the total value. Choosing to fund them might crowd out investment for the smaller, deliverable packages of work that contractors and communities depend on. This highlights the need to prioritise projects according to social and economic return and our collective ability to fund the required level of investment.