Understanding how infrastructure charges affect households

Meeting our infrastructure challenges will require different ways of charging and paying for infrastructure services. Ultimately the costs of providing infrastructure must be recovered somehow. We undertook this research to better understand how changing the way infrastructure services are charged affects households on different levels of income.

This work is part of our in-depth research programme on infrastructure and fairness.

Key findings

• The way that households and businesses are charged for infrastructure services has a big impact on who pays for infrastructure and how much they pay.
• Households pay for infrastructure services in different ways. Current ways of paying include taxes, council rates, fixed and variable user charges. How we pay for infrastructure varies by sector and location.
• How much households pay for infrastructure services differs. The average New Zealand household spends $13,500 per year on infrastructure, or about 16% of their after-tax income. On average, lower-income households spend less in total on infrastructure services than higher-income households, but they pay a much higher share of their income. Many factors drive differences in infrastructure spending.
• How infrastructure services are charged for changes how the costs are distributed across households.