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Government struggles with visibility over $140 billion in projects, with $1b in cost pressures.
Treasury reports poor data quality and investment readiness, especially in Health NZ and Education.
Public-private-partnerships are considered for funding alternatives, with high-risk projects needing better planning.
It did not fact-check what agencies told it but “some of the data submitted to us appears to be out of date”, it said.
The Government is struggling with visibility over $140 billion in projects, with $1 billion in cost pressures. Photo / Mark Mitchell
The “investment-readiness” of proposals had actually dropped slightly heading into the Budget 2025 process, said the report, that dated back to September 2024, and was released by Treasury this week.
RNZ has asked ministers for an update.
The September report alluded to the high stakes of half-baked business cases getting to Cabinet, and it being forced to choose between them.
“Given the constrained fiscal position, it is important that we are provided well-developed business cases to allow us to consider the relative value for money and trade-offs through Budget,” it told Nicola Willis and Chris Bishop.
The report put the cost pressure at a mere $1b, half of what it was in June 2024.
But was that figure reliable? Treasury warned: “The quality of the data on cost pressures remains variable.
“We must remain vigilant.”
Health NZ scored just 36% for investment readiness.
“Data quality and completeness remains poor, including challenges in reconciling historic data,” said Treasury of Health, the worst comment about a major agency, though readiness at Education was put at just 19%.
Health NZ is poised to cut half of its data and digital jobs.
The Government was trying to get a grip on a 10-year pipeline of infrastructure building, but its ambitions did not all match the available funding, expertise or labour.
Weak project planning and monitoring have jammed and cracked the building pipeline for successive governments, papers show.
Road builders have talked previously about projects being disconnected from reality.
The new Treasury investment update showed the Government was not out of the woods yet.
“While there has been incremental improvement in investment planning and delivery behaviours, agencies need to continue improving their asset management and investment planning to support the delivery of a sustainable pipeline and avoid unnecessary cost pressure,” it said.
Treasury noted progress on seven fronts, such as stronger guidance and monitoring loops.
The Infrastructure Commission plans to present a draft 10-year plan mid-year.
The scale is large: 188 medium and high-risk projects worth about $85b in the planning stage, and 142 worth $57b in the delivery stage. There were also scores of lesser-risk ones.
The value of projects being planned had risen $20b since June, due to NZTA completing some costings, the report said.
As for delays, in June they were afflicting half of the projects in the delivery phase, but the September quarter report did not mention them.
“Budget allowances remain tight,” the ministers were told.
The Government had been casting around for funding alternatives, and there was one sign of that in the report: Treasury had sought extra risk assessments for two potential public-private-partnerships (PPPs) – the highway north of Warkworth, and courthouses in Rotorua and Waitākere. Courts are in a half-billion-dollar infrastructure hole.
It recommended Cabinet add four projects to its list for getting a business case drawn up, this included, building a standardised tool for yearly assessment in schools, a new fingerprinting system for police and a digital overhaul of Stats NZ.
The fourth project was blanked out as were the likely costs of the projects.
A project to update gambling tech for the Lotteries Commission did not meet the threshold.
Treasury kept the same five projects in its trickiest high-value and high-risk basket, including police’s Next Generation Critical Communications project, and the rebuild at Antarctica’s Scott Base.
