By Claire Edmondson, Infrastructure New Zealand Chief Executive

New Zealand’s first-ever long term infrastructure strategy, Rautaki Hanganga o Aotearoa – New Zealand Infrastructure Strategy 2022-2052, was released in May.

Rautaki Hanganga o Aotearoa is the independent view of the Infrastructure Commission – Te Waihanga, proposing a pathway to transform infrastructure development over the next 30 years. It is made up of 68 recommendations covering a broad range of issues including climate change, connectivity, congestion, housing and waste. The Government is required to respond by September and Hon Grant Robertson has said the response will be clear about which recommendations to prioritise, with lead agencies assigned to implement them.

The strategy is the result of over two years’ work by Te Waihanga and involved extensive public consultation. The vision is that ‘infrastructure lays a foundation for the people, places and businesses of Aotearoa New Zealand to thrive for generations.’

INZ has long championed the need for an independent body to undertake this kind of work to provide a holistic, long-term strategy for the sector.

Ross Copland, Te Waihanga Chief Executive noted upon release of the strategy “more of the same simply won’t cut it. The strategy shows we will have to be smarter about how we plan, deliver and pay for our infrastructure.”

We consider the Strategy to be a comprehensive analysis of the challenges facing the sector. It is positive to see acknowledgment of the scale of the challenge and the corresponding scale of the response required to meet it.

The recommendations cover a wide range of infrastructure issues. Each identifies which organisation or group of organisations is best placed to implement these – from central government to local government, or the infrastructure sector in general. One concern is that some of the timeframes for implementation appear to be quite generous. For example, a timeframe of 2022 – 2031 is provided for the recommendation to set up a dedicated public and private sector working group to create a national infrastructure skills plan. Given constraints in the sector, this should be a matter of urgency.

While there are some aspects of the strategy we feel could have been further strengthened, overall it marks a significant step forward for a comprehensive understanding of the infrastructure challenge that lies ahead. We urge the Government to adopt the recommendations and consider the opportunities that also exist to lift the wellbeing of our regions and towns, and to make greater use of private sector resources and expertise in addressing the infrastructure deficit.

Challenges and recommendations
Many of the challenges identified in the strategy will be familiar to our members, for example:

  • It will cost $90 billion to fix our water networks
  • 115,000 more homes are needed to address the current housing crisis
  • $5 billion of council infrastructure is exposed to sea level rise
  • There will be a shortfall of 118,500 construction workers in 2024
  • Infrastructure construction costs have risen 60% faster than prices elsewhere in the economy.

Te Waihanga estimates it will cost $31 billion a year, roughly a tenth of New Zealand’s GDP, to plug the infrastructure deficit and build for the future.

The strategy presents a series of objectives to meet these challenges, including:

  • Enabling a net-zero carbon emissions Aotearoa through rapid development of clean energy and reducing the carbon emissions from infrastructure.
  • Supporting towns and regions to flourish through better physical and digital connectivity and freight and supply chains.
  • Building attractive and inclusive cities that respond to population growth, unaffordable housing and traffic congestion through better long-term planning, pricing and good public transport.
  • Strengthening resilience to shocks and stresses by taking a coordinated and planned approach to risks based on good-quality information.
  • Moving to a circular economy by setting a national direction for waste, managing pressure on landfills and waste-recovery infrastructure and developing a framework for the operation of waste-to-energy infrastructure.

Other issues that INZ will be reviewing in more detail include:

  • Ensuring that the Natural and Built Environments legislation ‘gives effect’ to existing requirements for the government to deliver infrastructure and enables greater certainty for infrastructure providers
  • Publishing a national infrastructure priority list to provide greater certainty for the sector
  • Strengthening resilience, particularly to climate change
  • Support for a national freight strategy that is integrated and considers the contribution of all modes
  • Increasing integrated land use and transport planning
  • Introducing congestion charging. This would need to be accompanied with better public transport options to mitigate the financial impact on low-income households.

How the strategy could be strengthened
In our view, the strategy could have been strengthened in two areas – by supporting joined-up regional economic development, and through the role of the private sector in the funding and delivery of infrastructure.

Recommendations around regional economic development include improving the efficiency and security of freight and the national supply chain. However, there is not any clear overarching strategy for lifting regional wellbeing. It is important to recognise and leverage the comparative strengths of our regions and the role of infrastructure as an enabler of improved wellbeing. The strategy could and should have taken a more holistic look at the infrastructure needs of our towns and regions based on their unique demographic, socio-economic and land use profiles.

An opportunity has also been missed to include more extensive discussion of the options and approaches that might exist to leverage greater private sector resource and expertise. It is well recognised that the Government does not have the financial capacity to finance the entire deficit itself and will be forced to prioritise and stage projects. It is critical that the Government partners with the private sector to enhance delivery capability, and provide the ability to finance multiple infrastructure projects simultaneously.

 

 

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