By Claire Edmondson, Infrastructure New Zealand Chief Executive

The Infrastructure Strategy 2022-2052 is Te Waihanga/ the New Zealand Infrastructure Commission’s first long-term vision for the nation’s infrastructure development. It is made up of 68 recommendations designed to ensure that infrastructure lays a foundation for the people, places, and businesses of Aotearoa New Zealand to thrive for generations.

In this article its recommendations are grouped into five areas that Infrastructure New Zealand thinks will be of particular interest to our members. These are:

  • Improve infrastructure funding and financing
  • Increase certainty of pipeline
  • Lift industry capacity and capability
  • Improve resiliency and mitigate climate change
  • Reform planning and resource management laws

Improve infrastructure funding and financing
Effective funding and financing of our significant infrastructure deficit is one of our strategic pillars. The New Zealand Infrastructure Commission estimates it will cost $31 billion per year, roughly a tenth of New Zealand’s GDP, to plug the infrastructure deficit and build for the future. We are clear that this gap cannot be met by government alone and have been continuously advocating for more effective utilisation of private capital to fund this deficit. We welcome the explicit acknowledgement in the strategy that a “material increase in infrastructure funding from both public and private sources is required to meet our infrastructure challenges and boost productivity”.

Key recommendations include:

  • Improve the ability to debt fund infrastructure: a) Investigate opportunities to utilise the Infrastructure Funding and Financing Act 2020 and b) explore other Special Purpose Vehicles as a mechanism for new infrastructure investments (Recommendation 51)
  • Improve funding of infrastructure services through targeted funding tools (Recommendation 52)
  • Enable value capture tools through legislation to ensure that more funding is available for infrastructure that generates value for users and communities (Recommendation 53)
  • Increase infrastructure funding to meet our infrastructure challenges and boost productivity (Recommendation 54)
  • Reform the transport funding system (Recommendation 48)

The strategy notes that, in the right circumstances, the public-private-partnership (PPP) model can “offer better value for money than more traditional procurement approaches”, and that when looking at delivery of new projects the government should “rigorously test the potential for using a PPP as part of the procurement phase”. INZ supports this test. Aside from this recommendation, we were disappointed that there was not deeper discussion on how government would support increased private sector involvement to address the infrastructure deficit. We would have liked to see a greater weight on this in the Strategy.

Increase certainty of pipeline
We are supportive of recommendations designed to improve the Government’s ability to plan for and procure infrastructure.

Key recommendations include:

  • Strengthen government as a sophisticated client of infrastructure, which includes requiring long-term planning informed by service standards to better predict future infrastructure needs (Recommendation 38)
  • Increase the clarity of long-term investment intentions for public infrastructure agencies (Recommendation 39)
  • Strengthen independent advice for infrastructure prioritisation, including establishing an independent infrastructure priority list to build consensus on key projects and initiatives that address significant long-term problems (Recommendation 40)

INZ supports the development of an independent infrastructure priority list. This will encourage early identification of priority projects, enable early investigative works and protection activities and provide pipeline certainty for the industry to invest in its capability and capacity.

Lift industry capacity and capability
Attracting talent, retaining skills, and ensuring a workforce that is fit for the future is one of INZ’s four strategic pillars. The sector has been struggling to attract talent and retain the skills needed to deliver projects and action is needed to address this issue. The strategy includes a series of recommendations to improve workforce development and enhance the attractiveness of New Zealand for international firms.

Key recommendations include:

  • Develop the talent required to deliver New Zealand’s future infrastructure: Deliver a national infrastructure skills plan to ensure New Zealand has the right people with the right skills to deliver our infrastructure over the medium to long term (Recommendation 65)
  • Provide certainty to industry to invest in skills and training development (Recommendation 64)
  • Develop capabilities and capacity across the infrastructure system for effective partnerships with Māori: This includes building specialist Māori infrastructure capabilities at the centre of government that can support agencies and Māori (Recommendation 2)

We support these recommendations. We also note that this is not enough to address urgent skill shortages and also support measures that will attract skilled people from offshore, alongside training the local workforce.

Improve resiliency and mitigate climate change
A further strategic pillar is focused on climate change and the role of infrastructure to mitigate impacts through sustainable infrastructure. Climate change and its implications are well-recognised. In our view, there are opportunities to design and build our cities in ways that make them both more sustainable and liveable, ranging from quality compact urban forms to realisation of a low-emissions transport fleet. The Infrastructure Strategy has a strong focus on improving the resiliency of infrastructure and supporting emissions reduction.

Key recommendations include:

  • Minimise lock-in of future emissions: Set a strategic direction in emissions reduction plans that requires public sector investment programmes to be compatible with our international commitments on carbon emissions (Recommendation 4)
  • Achieve net-zero carbon emissions at minimum cost (Recommendation 5)
  • Increase the resilience of critical infrastructure, including adequately resourcing lead resilience agencies to carry out the functions required to support the delivery of critical infrastructure (Recommendation 25)
  • Prepare infrastructure for the impacts of climate change (Recommendation 27)

Infrastructure-related decisions will have a significant impact on our path to decarbonisation and net zero emissions. Transitioning to a low emissions economy requires a transformational change in how we plan, fund, and deliver infrastructure and services. This also highlights the need for integrated land use, transport, and urban planning that provide genuine low carbon alternatives for travel. As part of this transition there needs to be appropriate support for sectors on the supply side including freight, waste, and energy.

Reform of planning and resource management laws
There are a range of recommendations designed to streamline planning and resource management processes outlined in the strategy.

Key recommendations include:

  • Improve the efficiency and outcomes of infrastructure through spatial planning (Recommendation 20)
  • Improve the evidence base for environmental consent applications (Recommendation 58)
  • Improve the delivery of transit-oriented development (Recommendation 19)
  • Increase the supply and use of low-emissions transport modes: Reduce barriers to the cost-effective implementation of low-emissions transport modes and streamline costly resource management and local government consultation processes (Recommendation 15)
  • Speed the build of low-emissions energy infrastructure: Streamline consenting of low-emissions energy infrastructure while meeting environmental objectives (Recommendation 6)

INZ strongly supports efforts through the RMA reform programme, and related processes, to require more integrated spatial planning at a regional level. This will allow towns and cities to plan more effectively and efficiently for growth and infrastructure requirements. We question whether these recommendations go far enough, but look forward to their implementation.

Conclusion
We welcome the work of Te Waihanga/ the New Zealand Infrastructure Commission in producing this holistic, long-term strategy for the sector. It is a significant body of work, and includes many important recommendations not discussed here. We encourage our members to review the full strategy, available here. An online tool for reviewing recommendations is available here.

INZ looks forward to the Government’s response to the recommendations in September and we will provide an assessment of the response when it is released.

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