Leaking water pipes and drifting ferries pretty much sum up the sorry state of the nation’s infrastructure. We need to invest $104 billion to address our deficit, according to the NZ Infrastructure Commission, at a time when finances are tighter than ever.
The commission partly blames a serious underinvestment in infrastructure in the 1980s and 90s for our current woes, which councils and central government can’t simply now spend their way out of.
But there is one shining example of proactive infrastructure investment paying dividends – the nationwide construction of the ultrafast broadband (UFB) network. Consulting firm Deloitte has taken a retrospective look at the return on the $5.5b spent since 2010 on extending UFB services to around 85% of the population, including sizeable taxpayer subsidies.
Between 2012 and 2023, high-speed internet access via the UFB delivered $31b in economic benefit, according to Deloitte, which looked at the productivity gains and enablement of new services the network supported.
Our productivity is notoriously low compared with other developed nations, so you can imagine where we’d be with slow and unreliable broadband.
Fibre allowed us to do things we now take for granted, like working from home, even in small towns, and accessing video streaming and gaming services. UFB came into its own during the pandemic, when remote work and buying things online became the norm, and the load on the network increased enormously.
Telemedicine lets health professionals hold consultations with patients remotely, and Internet of Things sensors monitor buildings and transport networks, sending video feeds and data over fibre-optic cables. Our digital exporters can easily and affordably send their products around the world.
But Deloitte suggests we are only scratching the surface of what high-speed internet can deliver. It forecasts a $163b boost to GDP between 2024 and 2033, courtesy of the UFB network. The analysis assumes that Chorus and other providers keep extending fibre to cover 95% of the population and that uptake of fibre increases from the 75% of households that currently have access to it. If UFB use isn’t expanded, we’ll leave $17b in value on the table, it says, and see a lingering digital divide in parts of the country.
By 2033, most of us will be accessing the internet via a gigabit-speed connection more than twice the speed that the average broadband connection currently offers. We will have 44 devices per household connected to the internet, up from 25 currently.
The UFB’s design, which saw fibre extended directly to homes and businesses, has served NZ incredibly well.
What will we be doing differently online? The AI revolution is expected to fill much of the additional bandwidth at our disposal. At the moment, AI is largely text based, delivering answers and information via the likes of ChatGPT and Google Gemini. But it will increasingly be multimedia, generating images and videos, holographic and virtual reality environments.
There’s great scope to develop digital public infrastructure by making services more accessible online and in formats that citizens are comfortable with. We are a nation of small businesses, which have been relatively slow to go digital and embrace e-commerce. Recent studies show a fall in our businesses’ product innovation and digital competitiveness.
Australia has seen an A$121b uplift in GDP over the 10 years its national broadband network has been in operation. That network has been plagued with technical issues. In comparison, the UFB’s design, which saw fibre extended directly to homes and businesses, has served the country incredibly well.
So, we are capable of getting large public-private infrastructure partnerships right. Highways and water infrastructure aren’t broadband. But there’s much to learn from the UFB’s success that can be applied to upgrading other infrastructure.
