Is the Infrastructure Plan an ambitious vision or missed opportunity, ask Brendan Cash (Partner), Paul Buetow (Partner), and James Sanderson (Solicitor) in Dentons’ Major Projects and Construction team.
The NZ Infrastructure Commission’s Draft National Infrastructure Plan sets out an ambitious roadmap for the country’s infrastructure future; however, it again reveals a troubling reality: our infrastructure delivery system is burdened by inefficiencies, fragmented governance, and a persistent inability to convert high spending into high performance.
This Plan, while comprehensive in scope, raises critical and system management issues that the Government (national and local) needs to address to help resolve long-standing issues with much needed infrastructure delivery.
High spending, low value
The report shows that we spend more on infrastructure than 90 per cent of Organisation for Economic Co-operation and Development (OECD) countries, an average of 5.8 per cent of GDP (or $4500 per person) annually.
Yet, the return on this investment is alarmingly poor; high-level assessment puts our country in the bottom 10 per cent for ‘bang for buck’. Roads are unsafe, water networks leak, and hospitals are under-maintained. New Zealand is spending the money, but not getting the returns it should on that investment.
This paradox is not new. Previous strategies have highlighted the same issues identified here: regulatory complexity and short-term planning. These issues need to be addressed to make progress. The Plan makes two main recommendations in this regard: Performance reporting: Central government agencies are legislatively required to report on performance against their asset management and investment plans; and asset management assurance: Central government agencies’ asset management and investment plans are independently assessed.
A plan built on assumptions
The Plan forecasts a rise in infrastructure investment to over $30 billion annually by the 2050s.
It assumes that demographic growth, climate change, and technological shifts will drive demand. But, it also assumes that funding will be available, that projects will be deliverable, and that public support will remain strong.
That is a challenging assumption when central and local government agencies are already facing fiscal constraints. Structural deficits, rising debt, and limited revenue streams mean that future investment will be harder to fund. The Plan seeks to address that by identifying three supporting funding models: user-pays for network infrastructure; commercial self-funding (private funding) for economic development assets; and tax-based funding for social infrastructure.
The issue is that these models have practical and political implications. On the practical side, user-pays models can be difficult to implement successfully, given our relatively low user numbers.
Also, like PPPs, congestion charging, and water metering, they also face public and political resistance. The Plan acknowledges this. This brings the issue back to a regular theme in relation to infrastructure development here in recent years and the need to build political consensus to provide certainty in the system and thus stabilise and develop the sector.
Governance: Still a patchwork
Our infrastructure is delivered by a complex web of central government agencies, local councils, commercial entities, and Maori organisations. Oversight mechanisms vary widely, and coordination is often poor.
Land transport, for instance, is governed by multiple entities with overlapping responsibilities. The result is a $12 billion funding gap over three years ($27 billion to $38 billion over 10 years) and declining value for money in transport investment.
Similarly, central government agencies routinely submit infrastructure proposals without robust business cases. Over half of the Budget bids reviewed by the Treasury for the 2023 and 2024 Budgets had missing or incomplete business cases, and almost all of them lacked cost–benefit analysis. This is not a planning failure. It’s a governance one.
The Plan calls for better governance and transparency, with two recommendations. Consumer protection with all infrastructure providers, regardless of sector, have clear and well-understood transparency and accountability mechanisms that ensure that consumer interests are protected. And transport system reform with the land transport funding gap closed by requiring user charges to fully fund planned investment.
Workforce and capability
The Plan identifies the need for a larger, more skilled infrastructure workforce. It highlights the importance of project leadership and governance capability. Infrastructure delivery depends on people: engineers, planners, project managers, and tradespeople. Without a coordinated approach to training, recruitment, and retention, the sector will continue to struggle.
The Plan’s call for broader pathways into the workforce is welcome. There is then the issue of retention. That depends on a reliable pipeline of work that enables the industry to plan and develop its workforce to meet known demand. This comes back to the issue of avoiding constant change and dramatic ups and downs in the industry, where people come into it only to leave shortly after when opportunities dry up (as has happened over the last few years). This is again where political consensus on the way forward (what projects to fund, how to fund them etc.) is key.
The Plan makes two main recommendations in this regard. Workforce development: Workforce development planning and policy is informed by infrastructure investment and asset management plans and the Infrastructure Commission’s independent view of long-term needs. And public sector capability with public sector project leadership strengthened by standardising role expectations and improving career pathways.
Planning for uncertainty
The Plan emphasises the need to plan for uncertainty: natural hazards, climate change, and shifting demographics. It calls for flexible investment strategies and sophisticated project planning. The issue then becomes how is the system changed to accommodate this – can we just continue as we have?
The answer to that seems to be, “no”. The Plan indicates the need for more innovation, what then is the vision for transformative change? This is an area that we, as a nation, need to do more work on.
Sectoral analysis
The Plan provides detailed analysis across seven sectors, including land transport, water, electricity, telecommunications, education, hospitals, and public safety.
For example, the electricity sector is a cornerstone of decarbonisation and the report acknowledges the need for ‘firming’ generation. These are known issues but, as a nation, we have yet to develop a firm, committed strategy to address these issues, becoming yet another political football (e.g. the Lake Onslow pumped hydro scheme, investigated by one Government and then not progressed by another).
The sectoral view in the report is a useful starting point. The reviews now need to be taken and further developed so that coherent, long-term agreed strategies and frameworks can be put in place to ensure the necessary infrastructure is built.
Recommendations
The Plan makes 19 recommendations across four areas: funding, governance, maintenance, and investment planning. These include calls for multi-year budgeting, independent asset assessments, and improved project transparency.
These are sensible recommendations. But they are not new. Many echo previous strategies and reports. What is now needed is political backing to develop and implement them. Without political and legislative backing, performance incentives, or institutional reform, these recommendations risk becoming another set of well-intentioned ideas that fail to shift the status quo.
Conclusion: A plan that needs more than feedback
The Draft National Infrastructure Plan is a thorough and thoughtful document. It reflects years of research, consultation, and analysis. It offers a clear diagnosis of our infrastructure challenges and proposes a coherent set of solutions.
As the Plan moves toward finalisation, public feedback is essential. Feedback submissions are being accepted now until 5pm on 6 August 2025 via the Infrastructure Commission’s website (by online form or document upload, here: https://tewaihanga.govt.nz/national-infrastructure-plan/feedback-on-draft-national-infrastructure-plan).
But what’s more essential is political will. Without it, this Plan risks becoming another document on the shelf.
Hopefully, the public feedback and completion of the Plan itself will help ensure the necessary discussions are held at a political level, and steps are taken to address the issues and build a political consensus on the solutions.
• This publication is not designed to provide legal or other advice, and you should not take, or refrain from taking, action based on its content. Dentons does not accept any liability other than to its clients, and then only in relation to specific requests for advice. For specific advice, contact your legal advisor or the Major Projects and Construction Team at Dentons on (09) 379 4196.
Parting words from Jeremy Sole- a final column