Infrastructure programme

The Government has a number of roles with respect to infrastructure. It owns a significant amount of infrastructure, either directly in government agencies or through less direct structures such as state-owned enterprises. It has a regulatory role, making laws and enforcing them through agencies such as the Commerce Commission. It has a co-ordination and leadership role, working with local government and business where these interests overlap. And finally, in the case of one-off or unexpected events, there are occasions when the government will intervene directly to ensure that the public interest is protected, or to remove or resolve barriers to private investment.

Within these diverse roles, the Government has identified three main areas that will be its focus. These three parts of its infrastructure initiative are as follows.

Public sector investment

To support its economic growth aspirations the Government is making a step change in the level of infrastructure investment. It has allocated $7.5 billion for new capital spending over five years. In February 2009, in response to the global financial crisis, $484 million of this was committed to maintain employment by accelerating existing projects. Another $1 billion was allocated in Budget 2009, leaving approximately $6 billion available for spending in Budgets 2010 to 2013.

Funding to the transport sector has also been increased and existing plans reprioritised to reflect growth priorities. Transport spending by central government (capital, maintenance and grants) now well exceeds $2.8 billion per annum.

In total, the Crown is now spending over $6 billion per annum on maintenance, replacement or new investment in physical assets.

In addition, local authorities have indicated they will spend around $30 billion, predominantly on infrastructure, over the next 10 years.

Part 2 of this document describes the major projects that are expected to be completed using this funding. More information on projects can be found at www.infrastructure.govt.nz.

Better management of public infrastructure assets

The Government owns assets that comprise a substantial proportion of the nation's infrastructure portfolio. Valued at over $110 billion, these have been acquired over many decades and represent a significant public investment. By way of illustration, we note that the interest costs on $110 billion would exceed the total amount the Government is spending on its ultrafast broadband initiative in less than three months. In addition, maintenance and upgrade costs for the Government's infrastructure portfolio are about $6 billion per annum. It is therefore very important for growth, and to reduce the burden on future tax payers, that existing assets are well managed.

Unfortunately, some public agencies have poor capability in this area and some assets have been poorly managed. The second leg of the Government's infrastructure agenda involves lifting public sector capability to procure and manage assets more effectively.

This initiative includes:

• improving the quality of analysis provided to decision makers
• considering a broader range of options when procuring assets, and
• better whole of life asset management.

These initiatives are described only in outline in this Plan as, although they are important for overall productivity, they are of more direct interest to those within the public sector.

Regulatory reform

Local government and the private sector are major owners of infrastructure in some sectors. To facilitate local government and private sector infrastructure investment, the Government has a programme of legislative changes and regulatory reforms. These are aimed at reducing bottlenecks, increasing certainty of outcomes and reducing the regulatory burden on business.

The Government is committed to working with local government and businesses to improve the regulatory environment.

The current reform agenda includes changes to the Resource Management Act, amendments to the Corrections Act and the Local Government Act, an Infrastructure Bill and consideration of changes to a number of other Acts.

These initiatives are described in outline in this Plan but are not a major focus; the Plan is not the ideal vehicle for providing information about policy initiatives that develop in the course of months rather than years. More up-to-date information about these changes can be found on the web-sites of the responsible agencies.