Infrastructure Needs Analysis

New Zealand clearly values its infrastructure. We have been building infrastructure for generations, and our investment in infrastructure as a share of GDP is amongst the highest of high-income countries.  

We will need to continue investing to ensure our infrastructure is fit for the future, but we can’t afford everything, so trade-offs are necessary. The National Infrastructure Plan’s goal is to inform how we can achieve the right level and mix of investment over the next 30 years.  

Our Infrastructure Needs Analysis forms the basis of our forward guidance on infrastructure investment in the draft National Infrastructure Plan. It is our view about the level of infrastructure investment that is sustainable and affordable for New Zealanders. 

We will continute to do periodic updates to provide ongoing forward guidance on what level of investment is affordable and what mix of investment will best meet our long-term demands for infrastructure.

Key findings

• We forecast future demand for infrastructure by considering various drivers of infrastructure demand. These include the need to renew and replace existing infrastructure assets, respond to demographic changes, economic growth and climate change, and prepare for natural hazards.
• Our analysis suggests demand for infrastructure investment will increase from around $20 billion today to slightly more than $30 billion by the 2050s (in 2023 NZD terms).
• While the total spend on infrastructure will increase, the ‘share of our wallet’ spent on investment is expected to remain at levels similar to the last 30 years.
• Our analysis indicates infrastructure investment will average around 5.6% of GDP over the next 30 years.  While there are many different scenarios that could lead to higher or lower investment, we expect investment to fall between a range of 5% to 7% of GDP.
• Renewing and replacing assets we currently have will account for the majority of investment demands, and up to 80% of investment requirements in some sectors.
• We expect the mix of investment to change. Electricity and hospitals are key areas of future growth, whereas land transport and water investment will ease from its recent highs.
• When comparing our infrastructure with other countries that have similar incomes, geographic, and populations, we find that New Zealand typically has higher levels of spending, but not necessarily more infrastructure, more optimal usage, or higher quality infrastructure.