Govt spends $7b on new hospitals, roads and schools. Here's where they are

Author: Adam Pearse,
Publish Date: Thu, 28 May 2026, 3:05pm

Upgrades to hospitals, new school developments and extending the Waikato Expressway are among the big-ticket items in the Government’s boosted capital spend in Budget 2026.

Ahead of today’s Budget, Finance Minister Nicola Willis confirmed her Budget’s capital allowance would be increased to a net $5.7 billion, up about $2b from what was expected.

The Budget confirmed it would be spent on the following projects:

A new 158-bed tower block at Whangārei Hospital. Its cost was withheld due to commercial sensitivities.
Acquiring land in Drury for a new hospital to cater for the growing population south of Auckland. The allocated funding was withheld due to commercial sensitivities.
The Cambridge to Piarere Expressway, an extension of the Waikato Expressway, at a cost of about $1.8b. The road was one of the Government’s Roads of National Significance.
Design and enabling works for redevelopment programmes for Tauranga, Palmerston North and Hawke’s Bay hospitals through the next two financial years. The cost was withheld due to commercial sensitivites. Health New Zealand Te Whatu Ora would also fund a new temporary intensive care unit at Palmerston North Hospital and the fit-out of an in-patient unit at Tauranga Hospital.
State highway resilience projects which had been allocated $400 million over the four-year forecast period.
Funding the Rail Network Investment Programme 2027/2030 with more than $700m in capital spending. About $480m of the operating allowance would be used over the forecast period.
Building 232 new classrooms across the country, costing about $310m. About $160m would be used to upgrade the school property portfolio, which included redeveloping up to 10 schools and aquiring land for future school sites in high-growth areas such as Queenstown.
Building new police stations in Greymouth and Whanganui. Officials said they were considered “critical properties”, given their “current condition, criticality of size and impact on operations”. The funding had been withheld due to commercial sensitivities.
Building up to 2250 additional social houses.
New courthouses in Rotorua.
Maintenance to extend the life of the New Zealand Defence Force’s frigates.

Adam Pearse is the Deputy Political Editor and part of the NZ Herald’s Press Gallery team based at Parliament in Wellington. He has worked for NZME since 2018, reporting for the Northern Advocate in Whangārei and the Herald in Auckland.