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NZ can't build its way out of billion-dollar infrastructure hole - Robertson

Author
Thomas Coughlan, NZ Herald,
Publish Date
Mon, 2 May 2022, 10:58AM
Finance Minister Grant Robertson. Photo / File
Finance Minister Grant Robertson. Photo / File

NZ can't build its way out of billion-dollar infrastructure hole - Robertson

Author
Thomas Coughlan, NZ Herald,
Publish Date
Mon, 2 May 2022, 10:58AM

Infrastructure Minister Grant Robertson said New Zealand cannot just build itself out of its infrastructure deficit, after a new report showed that it would cost $31 billion a year, roughly a tenth of New Zealand's GDP, to plug the infrastructure deficit and build for the future.

Instead, New Zealand would need to think about what could be done to better use what infrastructure already exists, while building new infrastructure for the future.

"The Strategy highlights the scale of the task still ahead of us. For example, it will cost billions to fix New Zealand's aging water networks," Robertson said.

He said that while "investment is crucial, we must be smarter about the way we plan for, deliver and use all of our infrastructure".

"Trying to just build our way out of these challenges would mean nearly doubling what we currently spend to around 9.6 per cent of GDP over a 30-year period. That's over $31 billion per year – a sum that we would struggle to afford or have the capacity to deliver," Robertson said.

The new Infrastructure Commission is required to set out New Zealand's 30-year infrastructure strategy. That report is tabled in Parliament, and later the Government is required to deliver its plan to respond to that strategy. The report has made 68 recommendations.

The report looks at the long-term infrastructure challenges New Zealand faces and the costs required to meet them. This includes things like electricity generation, school and hospital building, and climate change," Robertson said.

"Electricity generation capacity needs to increase by 170 per cent to meet our net zero carbon goals," he said.

"Some $5 billion of local government infrastructure is vulnerable to sea level rise. We also face ongoing cost pressures and the need to build up workforce capacity."

Robertson discussed the Infrastructure Commission's "Infrastructure Strategy 2022–2052" at the Infrastructure 2022 Symposium in Christchurch.

He said he would deliver a response to the report in September.

"As required by legislation, we will share this response in September, determine which recommendations to prioritise, and assign lead agencies to implement them," he said.

"In many cases responding to the recommendations builds on current work under way - such as resource management reform, the health and disability sector reform, and the Three Waters Reform Programme," he said.

He added this response would not only come from central government, but would require the help of "local government, iwi/Māori and the private sector".

May is Budget month, which means each day it often includes a budget-related announcement. Robertson said there would be further detail on the Government's infrastructure response at a business breakfast on Tuesday morning.

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