Fixing the leaks, not just buying bigger mops.
That’s the theme of the National Infrastructure Plan released today.
It looks at 17 sectors covering central government, local authorities and commercially regulated utilities, and sets out a 30-year outline looking at how New Zealand can improve the way it plans, funds, maintains and delivers infrastructure.
Each year, we invest just over $20 billion in infrastructure, yet on a dollar-for-dollar basis, we achieve less than many of our international peers.
Essentially, while investing around 5.8% of GDP annually on infrastructure over the past 20 years and being one of the top spenders in the OECD, we rank towards the bottom for getting “bang for our buck”.
Another major point the plan shines a light on is the fact that New Zealand can’t afford to build everything.
There are currently $275 billion of projects in planning and delivery across the country, equating to 11,925 projects.
New Zealand Infrastructure Commission chief executive Geoff Cooper told The Front Page that sounds like a big number.
“Most of those, about 98%, are under $100 million. So they’re actually small. The real bread and butter of infrastructure is really small projects.
“We have about 44 that are over $1b, and most of those really are not funded, or don’t have a path to funding.
“The number [$275b] is an enormous number for a country of 5.5 million. The capital appropriation, each budget that the central government runs, the allowance for that as signalled previously, is $3.7b.
“Central government doesn’t do all of our infrastructure; they do about 40 to 50%, but it gives you a sense of the affordability pressures,” he said.
Only about 30% of the total pipeline is for maintenance and renewals.
“When you do the math on this for all of the assets that we own, and the way that we see those assets wearing and tearing out over time, we would expect that number to be in the order of 60%.
“In some places it’s going to be higher, you can imagine in places that don’t have significant population growth, those ones might actually have a higher number on the totality for replacement, and for places that are experiencing a lot of growth, you might expect that number to be a bit lower.
“If we’re not maintaining and renewing our assets in an optimised way, what we’re actually doing is lowering service levels and kicking costs to future generations. If you don’t keep on top of these things, the cost to get on top of them in the future is going to be higher.
“If you don’t paint the weather boards on your house repeatedly, eventually you’re gonna have to replace them. And the difference between painting a weatherboard and replacing one is significant.
“So, if we kick the can down the road on this mundane maintenance thing, which doesn’t hit the headlines very often, what it’s ultimately going to mean is there’s less infrastructure services over the long term, and that’s gonna be hurtful to our economy, but also all of the social infrastructure that we need as well,” he said.
Infrastructure Minister Chris Bishop has welcomed the plan and has tabled it in Parliament. The Government now has 180 days to respond.
Among the commission’s top 10 priorities for the decade ahead is lifting hospital investment for an ageing population, completing water renewals, implementing time-of-use charging and prioritising maintenance.
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The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. The podcast is presented by Chelsea Daniels, an Auckland-based journalist with a background in world news and crime/justice reporting who joined NZME in 2016.
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