The country’s focus on building new infrastructure instead of maintaining what’s already been built has been criticised by Te Waihanga New Zealand Infrastructure Commission.
Te Waihanga recently released a research report titled Build or Maintain, looking into the country’s infrastructure asset value, investment and depreciation amounts from 1990 to 2022.
Te Waihanga New Zealand Infrastructure Commission is a Crown entity, which was set up in 2019 to work on long term strategy and planning for infrastructure, as well as give advice for major projects.
In 2022, New Zealand’s infrastructure assets, excluding land, were valued at $287 billion. Nearly three quarters of these assets are owned by the Government and local councils. The inflation-adjusted value of New Zealand’s infrastructure assets rose from $32,900 per person in 1990 to $55,800 per person in 2022, meaning the country has 70% more infrastructure per person than one generation ago.
Speaking to Q+A, Te Waihanga general manager of strategy Geoff Cooper criticised New Zealand’s “build first mentality” when it should be focusing on maintaining existing infrastructure.
“We do have a tendency to try and build our way out of things like congestion in this country. And, certainly, when it comes to Auckland, despite billions put into a transport network, we've had transport speeds continue to decline for two decades, right? So I think a build-first mentality hasn't got us as far as we would like,” Cooper said.
The report found in the decade to 2022, for every $10 that was spent on new infrastructure in New Zealand, almost $6 of existing infrastructure wore out. This left $4 out of every $10 of investment available for new or improved infrastructure.
“For commercial and regulated infrastructure, what we see is that they are keeping up with their depreciation, and it looks pretty good. For local government, we can see that they're investing about 74 cents in the dollar on all of their assets, right, so not good, but at least we know,” Cooper explained.
“And then when it comes to central government infrastructure, putting transport and NZTA aside - hospitals, schools, defence and so forth, we don't have the disclosure requirements there. And so it's a big gap in our knowledge is, you know, how much are we investing in depreciation maintenance for these assets, and how would we know, other than going around and walking around a hospital?”
Cooper said the country was “bad” at maintenance because of three reasons – New Zealand’s young age means infrastructure hasn’t been around that long, maintenance is expensive and often difficult, and that publicly-held infrastructure isn’t incentivised to maintain assets because there’s no revenue stream.
One way to incentivise publicly-held infrastructure was to introduce measures like water metres, volumetric charging and charging for traffic congestion, Cooper said.
The report also stated that transport was the largest single investment category averaging around $700 per person in the period 2013 to 2022. Hospital investment lagged at the bottom with $140 spent per person, despite a trend towards an ageing population.
Cooper said the low hospital investment figures was “quite staggering” and needed revision.
“The other thing I would, sort of, say about hospitals is that when you look at how much we are spending as a proportion of aged population over 65, rather than per capita, we actually have been spending a declining amount for 15 years now.”
Q+A with Jack Tame is made with the support of NZ On Air
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