Incoming Government Can Save Billions With More Certain Infrastructure Pipeline

The new Government has a unique chance to end the instability in New Zealand’s infrastructure pipeline and save money by committing to a longer-term plan to build what the country needs to grow and prosper. That’s the message from Infrastructure New Zealand as it releases a new report showing the costs of continuing on our “listless infrastructure path”.

“For New Zealand to reach its potential, prioritising a more certain infrastructure pipeline is an immediate action the Government can do to increase productivity and allow us to build more, for less,” says Infrastructure New Zealand Chief Executive Nick Leggett. “Expert economic analysis shows this could result in billions of dollars of savings and additional infrastructure investment each year.”

Estimating the Costs of an Uncertain Infrastructure Pipeline was undertaken by Infometrics and is available at https://rb.gy/w35bk.

The report shows that streamlining delivery by Government committing to a more certain infrastructure pipeline could result in productivity and savings improvements of between 13% - 26.5% on future infrastructure projects. If applied, these savings could increase the amount spent on infrastructure delivery by between $2.3 billion and $4.7 billion per year over the 2025-31 period.

“The end result is a massive increase of $16 billion to $33 billion in infrastructure investment through to 2031. New Zealand badly needs to drive its infrastructure build, but we also need to be prudent in what we spend in a period of fiscal restraint, so this would be a real game changer,” says Leggett.

“We know from recent research that 70% of Kiwis want more infrastructure investment. They will expect their new government to deliver that and begin addressing the country’s $200 billion infrastructure deficit.”

“Right now, uncertainty around the infrastructure pipeline creates confusion for industry, restricts its ability to invest in labour and equipment, and limits the number of potential suppliers for projects. That inefficiency is expensive.”

“Providing pipeline certainty will allow New Zealand to reduce our infrastructure deficit much faster, without it costing us more.”

“It is encouraging that the parties likely to form the new Government understand the need for greater investment and delivery of infrastructure,” says Leggett. “This report illustrates just how important it is that they work to increase the coverage of the National Infrastructure Pipeline, particularly with regards to transport, energy and communications infrastructure.”

“A more secure pipeline would mean less fluctuations in Government priorities and funding uncertainty when Governments change. It would also mean infrastructure providers can build and maintain the required operational and workforce capacity. This will allow the infrastructure sector to move between projects with far greater efficiency and deliver the vital projects New Zealand needs over the long-term.”

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