Speech to Te Waihanga Symposium

Infrastructure

Introduction

Kia ora koutou katoa,

Today is a significant day for infrastructure in New Zealand. And that means it is a significant day for our productivity, our environment, our wellbeing and connections as people. That is because good quality infrastructure is core to improving all of those things.

Today we are tabling in Parliament and releasing Rautaki Hanganga o Aotearoa, the 30-year New Zealand Infrastructure Strategy from Te Waihanga, the New Zealand Infrastructure Commission. The Strategy is available in hard copy for those at the symposium and on Te Waihanga’s website after this speech.

When we came into government in late 2017 we heard the message loud and clear that the chronic underinvestment and lack of clear planning and coordinated delivery was holding our infrastructure back.

At the time we also heard the infrastructure sector’s call for the establishment of an independent body to provide best practice advice and deliver more clarity on the forward pipeline.

So, in 2019 we set up the NZ Infrastructure Commission, Te Waihanga. One of its primary objectives is to deliver a strategy to set out a pathway for infrastructure in New Zealand over the next 30 years.  

I’m proud that we now are at the point where that strategy is ready for you to explore and discuss at the Looking Ahead Symposium today.

I want to thank Dr Alan Bollard, the Commissioners, CE Ross Copland and his team for the work on the strategy. It is comprehensive, it does not shy away from the tough questions and it gives a clear set of recommendations for the government to address.

Now our - yours, mine, all of our jobs – is to get the best out of our infrastructure over the next three decades.

As a country, we have some major challenges ahead of us;

  • housing affordability
  • climate change and decarbonisation
  • disruption of supply chains and skills shortages, to name a few.

As a government we have set about addressing those challenges. Our Government has made a $57.3bn investment in capital spending over the next five years. And we know we will need to do more, both in our own spending and in partnering with others. I will have more to say about how we can do this in a pre-Budget speech tomorrow.

But the strategy reminds us that while investment is critical, we will need to do more than simply build more infrastructure if we are going to meet these challenges.

The Infrastructure Strategy sets out a vision, a set of principles and recommendations to help us not only meet these challenges, but to build a better future.

It draws on research, consultation and the views of more than 20,000 New Zealanders to set a path for this future.

Implementing the strategy will mean some changes, facing up to some difficult decisions and it will mean some trade-offs.

But change is crucial if we want future generations of New Zealanders to enjoy a great way of life.

New Zealand’s population took just on thirty years to grow from 3 million to 4 million people. We grew from 4 million to 5 million in just over half that time. But despite that rapid population growth we simply did not invest in the infrastructure we needed - the housing, the transport networks, the hospitals or the schools - to support that growth to be productive and sustainable.

The Strategy backs up the view I have had for a long time. Our infrastructure puts our economy on the back foot, we need to stop simply trying to put a band aid on our issues and we need to do all we can to future proof our country’s infrastructure.

Just like any business or organisation would – we need to think further than just one budget cycle.

The Economic Plan, the Strategy, and work to date

The Government’s economic goal is a high wage, low emissions economy that provides economic security in good times and bad.

This Government is focused on delivering better infrastructure and improving the system that enables infrastructure, to support the services which will lift wellbeing for all New Zealanders. 

Along with the rest of the world, COVID-19 and other worldwide events have disrupted or delayed the best laid plans – but the resilience of the sector to keep things going and keep delivering has been evident.

There is urgency here, and the decisions we make now can have an impact for decades to come. The Government already has a large reform agenda, such as RMA reform, the Immigration Rebalance, Three Waters, and the Health and Disability Reforms. These are all actions in this strategy. So we have already made a start.

We have:

  • Instigated reforms of the resource management system and the health sector,
  • On Friday, announced that we have accepted most of the recommendations of the governance working group on Three Waters reform and that we means we are now forging ahead with our plans to ensure safe and reliable water services for New Zealanders,
  • Got Transmission Gully open in Wellington,
  • Committed to light rail and record investment in the national rail and ferry systems,
  • Continued to deliver the NZ Upgrade Programme,
  • Provided funding to expand the capacity of and deliver the Auckland City Rail Link,
  • Provided funding to enable additional regional road maintenance across the country,
  • Established the Housing Acceleration Fund, including $350 million for the Māori-led housing projects,
    • And just last Thursday we announced funding for five Auckland suburbs which has the potential to unlock a further 11,000 houses
  • Supported IRG projects and financial support packages to keep the sector going through the disruption caused by COVID-19
  • Had 175,000 people take up apprenticeships and targeted trades training.

Getting smarter about how we plan and deliver public infrastructure

New Zealand currently spends around 5.5 percent of GDP on public infrastructure. This includes our transport, water, health, defence and education facilities. There is significant further private investment in infrastructure on top of that – such as in telecommunications and energy.

But the Infrastructure Strategy shows that if we continue on our current path, we will not be able to meet our future needs. We need to address our current infrastructure deficits, serve future needs caused by population growth and climate change, and pay for the ongoing cost of repairing and maintaining our infrastructure. 

Simply trying to build our way out of these challenges would mean nearly doubling what we spend, to around 9.6 percent of GDP over a 30-year period. That’s over $31 billion per year – a sum we would struggle to afford or have the capacity to deliver.

While we inevitably have to continue to put in more funding – we can also be smarter about the way we plan, deliver and use our infrastructure. This will mean getting more from the infrastructure we do build, reducing costs and prioritising for the greatest impact.

The Strategy offers a number of actions for achieving this – there are 68 recommendations in total – and these are focused on building a world class infrastructure system and five strategic objectives that Te Waihanga considers will help us to achieve a thriving New Zealand. These objectives include:

  1. Enabling a net-zero carbon emissions Aotearoa
  2. Supporting towns and regions to flourish 
  3. Building attractive and inclusive cities
  4. Strengthening resilience to shocks and stresses
  5. Moving to a circular economy

The Strategy highlights four levers of change that support both built and non- built solutions. Making better use of infrastructure that we already have; undertaking better project selection; broadening funding and financing options and streamlining delivery.

The Strategy makes clear that a step change is needed in how plan, design, fund and deliver infrastructure through an integrated and high performing system. There are five components of the system that will support change:

  • Improving decision making at all stages of the infrastructure lifecycle
  • Improving funding and financing
  • Creating an enabling planning consenting framework
  • Accelerating technology use
  • Building Workforce Capacity and Capability

The recommendations in the Strategy do cover areas we are already working on. But they also highlight some of the trade-offs that are required and the new policies that need to be considered, like congestion charging, water management and a circular economy to reduce waste,  in order to meet the challenges put down. We welcome this opportunity to do the once in a generation plan that will take us forward.

What happens now

Under legislation, Te Waihanga is an autonomous Crown entity and owns the Strategy, but in my role as Minister for Infrastructure, I am responsible for leading the Government response to the Strategy.

I am required by law to present a government response to the strategy by September. This will determine which Infrastructure Strategy recommendations we will prioritise for implementation and assign lead agencies to implement them.

The response will also build on the significant reforms already underway, such as resource management reform, the health and disability sector reform and the three waters reform. 

But it is important to remind ourselves that this is not a strategy just for the government. The recommendations in the Strategy cover the entire infrastructure sector.  New Zealand needs the whole system, including central and local government, iwi/Māori and the private sector to work together to address the significant challenges we face.

The Strategy will ultimately become the Government’s preferred long-term approach to infrastructure. We see the Strategy as a key enabler of many of our Government’s priorities - securing our economic recovery, tackling the housing crisis, and responding to climate change.

There are already some areas where we are looking at changes that support the direction set by this Strategy. For example – the Government is considering congestion charging as part of our Emissions Reduction Plan. And we have already announced plans to allow greater height limits for buildings in our major cities and to speed up the implementation of the National Policy Statement on Urban Development.

These are all actions that can help us to get better use of existing infrastructure, whether it is by better managing demand on our roads or ensuring more people live in areas where there are already good transport connections, water pipes and energy connections.

I know that Te Waihanga has consulted widely with New Zealanders to inform the development of the Strategy. I would personally thanks those here who providing feedback during its development.

Conclusion

Again, thank you to the Chair Alan Bollard, CE Ross Copland and their team for the work. Please do read the Strategy – it is an excellent piece of work. New Zealand has never had an Infrastructure Strategy before, and I’m proud we have been able to take this first step in doing better on this front.

And thank you again, for inviting me to speak today and for all the work you do for the New Zealand infrastructure sector.

Have an excellent Symposium, and I look forward seeing how you proceed from here to build a more prosperous, sustainable, and successful future for all New Zealanders.