Digging NZ out of its infrastructure deficit hole – Te Waihanga's bold 30 year infrastructure strategy

Te Waihanga - New Zealand Infrastructure Commission has released the New Zealand Infrastructure Strategy 2022 – 2052 (Strategy), which is the first time New Zealand has had a comprehensive long-term infrastructure strategy. The Strategy is aspirational in its aims and ambitious in its outcomes.

The vision of the Strategy is for infrastructure to lay a foundation for the people, places and businesses of Aotearoa New Zealand to thrive for generations.

The Strategy looks at the issues from the past, including decades of underinvestment and construction cost pressures, and seeks to ensure we have the infrastructure in place to meet the future demands, such as climate change adaptation and our growing populations. 

The Strategy is focussed on five key objectives to achieve the vision:

1. Enabling net-zero carbon emissions – infrastructure has a critical role in helping New Zealand to achieve net zero emissions by 2050. Clean electricity is identified as key for reducing emissions from transport, process heat, and agricultural activities, but streamlined regulatory processes are needed to enable the development of new renewable energy projects.

2. Supporting towns and regions to flourish – infrastructure has an important role in connecting the primary production regions of New Zealand to larger centres and overseas markets. Exports need strong and efficient freight supply chains to function and remain competitive, but smaller towns and regions can struggle to pay for the needed infrastructure to support these critical supply chains. Fundamentally, the Strategy highlights the need to improve the efficiency of the national supply chain (including airports, ports, roads and rail) to achieve an integrated, resilient and multi-modal network.

3. Building attractive and inclusive cities - with more New Zealanders living in our major centres it is placing increasing pressure on infrastructure to support growth. At the same time, infrastructure providers face barriers to identifying and securing land far enough in the future to ensure growth can be supported in an efficient and effective manner. The Strategy recognises that we need long term protection for future infrastructure networks and to improve co-ordination of infrastructure through realigning local government boundaries. Increased use of pricing tools to incentivise behaviour change and user pays are another key thread in the Strategy, particularly in relation to transport and water infrastructure. These tools need to be used in a way that ensures costs are allocated fairly and equitably.

4. Strengthening resilience to shocks and stresses – New Zealand (and our infrastructure) is vulnerable to threats from, among others, natural hazards and recognises the need to do more to prepare for them. The Strategy recommends a consistent and coordinated approach in defining and identifying critical infrastructure across New Zealand, and confirming minimum service levels that critical infrastructure is required to achieve in the event of an emergency, with disclosure obligations for infrastructure providers about how those minimum service levels will be achieved. Climate change adaptation is recognised as critical for ensuring future resilience of our infrastructure and recognises the key role of the National Adaptation Plan (which is currently open for consultation) in coordinating this.

5. Moving to a circular economy – New Zealand is identified as having a waste problem - infrastructure has an important role in reducing that waste. The Strategy recommends a national waste strategy to provide direction and help standardise services. However, it also recognises that a circular economy requires a new approach to waste infrastructure and the way we charge for waste.

The Strategy recognises that to achieve these objectives, good decision-making is a bottom line. We cannot invest in, and build, everything. There must be infrastructure priorities, informed by strategic planning and supported by an enabling consenting framework to actually deliver the infrastructure. And then, of course, there is the question of how the infrastructure is funded. The Strategy recognises that while Government funding is justified in some cases, the main funding option is to charge those who benefit from an infrastructure service.

The Strategy makes 68 recommendations to Central Government, local government and the infrastructure sector. Within six months of receiving the Strategy, the Government will provide its response, including those recommendations that it agrees should be implemented.

Comment

The Strategy shows that a huge amount of work is needed to ensure infrastructure can provide for the wellbeing of New Zealanders over the next 30 years. It sets ambitious goals, and appropriately so, but the costs of implementing the Strategy are significant.

The Strategy relies on the development of a range of additional plans and strategies including a National Freight and Supply Chain Strategy, National Digital Strategy and a National Population Plan, to name a few. That is going to take significant time and cost to develop, let alone implement.

A number of recommendations relate to the upcoming reforms to the RMA and the measures to be developed under new legislation, such as regional spatial plans. The Strategy's recommendations in this regard will be welcomed by the infrastructure sector, including the inclusion of "reasonable" environmental limits in the Natural and Built Environments Act that are "measurable, targeted and quantified". However, it remains to be seen whether the Government is willing to soften environmental limits in that way.

We need to be bold in our vision for the future, but we also need the tools to deliver on that vision while being able to adapt and respond to challenges as and when they arise.

If you have any questions about the Strategy, please contact one of our experts.

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