Investing in New Zealand's infrastructure

6 December 2005

Investing in New Zealand's infrastructure

Infrastructure investment has failed to play its part Empirical evidence suggests that New Zealand infrastructure investment since the 1970s has been insufficient to provide for future growth. Outdated assets are becoming increasingly strained, with speculation some infrastructure will be unable to cope with increasing demand. The current government has recognised that investment in New Zealand's physical infrastructure has been inadequate.

Infrastructure is a key to growth Infrastructure investment is a key component of economic growth, although the actual impact on GDP is difficult to quantify.

The government is unlikely to be able to go it alone The government purse will be unable to fulfil the future requirements of infrastructure investment. Private public partnerships are an alternative.

Road, rail and electricity require the most urgent attention The services most needed by business and consumers need substantial infrastructure investment and a long-term plan. The government has a series of policy initiatives, but more needs to be done.

An efficient allocation of resources is necessary The government must boost New Zealand's infrastructure shortfall. It must create a competitive infrastructure marketplace to ensure efficient allocation of public and private sector funds in the most infrastructure-deficient areas.

Relentless reform and private sector participation is at least part of the answer Further regulatory reform needs to be undertaken by the government to ensure that both the private and public sector participate in New Zealand's infrastructure overhaul.

ENDS

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