Leaky hospitals, mouldy army barracks and bursting water pipes — a new 30-year infrastructure plan lays bare the cost of decades of neglect, but warns New Zealand is already planning to build far more than it can afford.
That is the central finding of the National Infrastructure Plan, released by the Government's independent Infrastructure Commission this afternoon.
After a consultation process that drew 2700 submissions and responses, the plan identifies 10 priority areas for urgent action this decade and makes 16 broader recommendations to overhaul how the country plans, funds, and delivers infrastructure.
But the document also highlights a deepening fiscal crunch that will force difficult choices about which projects proceed and which communities miss out.
Commission chief executive Geoff Cooper said Aotearoa could no longer continue with business as usual.
"If you need motivation for the need for a national infrastructure plan, probably the last 24 to 48 hours have given that to us.
"New Zealand faces some significant challenges on its horizon, and many of those we are encountering on a day-to-day basis right now."
He added: "Weather events and infrastructure failures make very clear the importance of investing to renew and build resilience into the networks that sustain our way of life."
The Infrastructure Commission chief executive speaks about the country's investment priorities. (Source: Q and A)
$275bn of infrastructure in planning, most unfunded
The scale of infrastructure spending planned was staggering, according to the commission, but there wasn't yet clarity on priorities around where it was absolutely required.
The pipeline of infrastructure in planning now contains nearly 12,000 projects worth a combined $275 billion - but more than two-thirds of that doesn't yet have full funding.
"We started with a budget that New Zealand can reasonably afford, rather than ending up in a world where we have endless projects that cannot be funded," Cooper said.
The 10 priorities the commission has identified for urgent action this decade include boosting hospital investment for an ageing population, catching up on years of deferred water pipe maintenance, and introducing peak-hour road charges in Auckland to ease congestion. Some recommendations align with work already underway.
Others are likely to face resistance or notionally oppose existing Government plans.
Companies managing about $6 trillion in combined capital gather to consider major new works for New Zealand. (Source: 1News)
Renewals: the 'mega project we cannot avoid'
A thread running through every sector of the plan is the renewal problems quietly building across New Zealand's infrastructure networks.
Much of what was built after World War II is now wearing out, and replacing it will consume around 60 cents of every infrastructure dollar spent over the next 30 years - roughly $20 billion a year on average.
"This is the mega project that we cannot avoid, or if we do, it will end up being more expensive," Cooper told media yesterday.
Local Government New Zealand sounds warning over long term lack of investment (Source: 1News)
The plan noted visible symptoms of that neglect, including sewage leaks in hospitals, leaky classrooms, mouldy army barracks, and ailing water infrastructure.
Councils alone are planning to spend close to $50 billion over the next decade renewing and expanding their water networks - roughly the same amount, in inflation-adjusted terms, as the country spent on all water and wastewater infrastructure in the 127 years between 1885 and 2012. Household water bills are now expected to double in some areas.
That water bill is just one piece of a much larger puzzle.
Enormous cost of water spending made clear
The sheer scale of the infrastructure catch-up required was difficult to forecast precisely, Cooper told media at a briefing ahead of the plan's release.
"If you sort of imagine looking after your car or your vehicle at home, we're able to see that there have been expenditure on the vehicle which has been under what we would expect, but we don't know whether or not that translates to a paint job that hasn't been done properly, or a brake replacement that hasn't been done," Cooper said.
The plan traced the problem back to a nearly 20-year period from the mid-1970s, when spending on water infrastructure fell below the rate of depreciation, meaning pipes and treatment plants wore out faster than they were replaced.
Inflation and climate change mean previous estimates of up to $185b are likely shortchanging the ballooning costs. (Source: 1News)
Councils are now grappling with a legacy of broken pipes, sewage overflows and leaks, as well as a need to meet quality standards set by the water services regulator.
New Zealanders also use more water per person than almost any other high-income country, which is adding pressure to already strained networks. The commission encouraged councils to install water meters and adopt pricing to manage demand.
Over the longer term, the commission expected water spending to moderate to about 0.5% of GDP once the catch-up phase had been completed.
The plan also warned that flood risk was projected to increase most sharply in Nelson-Tasman, Bay of Plenty and the West Coast regions over the coming 50 years, driven primarily by sea level rise rather than more intense rainfall.
Electricity investment also needs to grow significantly, the plan said.
Commission urges hospital spending lift
For the health sector, the plan flags that an ageing population will drive demand higher just as existing hospital buildings face mounting maintenance backlogs.
Hospital investment had been running at about 0.2% of GDP, and the plan said it needed to roughly double to 0.4% over the next 30 years - from about $800 million a year historically to $1.6 billion in the near term, rising to $2.4 billion by the 2050s.
The number of New Zealanders aged 65 and over is projected to grow from around 900,000 in 2025 to more than 1.5 million by the early 2050s. Under current models of care, 4900 additional hospital beds may be needed by 2043.
The greatest pressure will fall on large centres.
Iain Rennie says many are rundown – and remodelling work will come with a hefty price tag. (Source: 1News)
The commission's modelling projected Auckland would need 1100 additional beds and health facilities over the next 25 years, under existing models of care - the equivalent of building a second Auckland City Hospital, which was already the largest in the country.
The commission had endorsed the need to investigate upgrades to Tauranga, Palmerston North and Hawke's Bay hospitals through its Infrastructure Priorities Programme, but said all regions would need more investment.
The plan recommended shifting demand where possible to non-hospital care, investing in community-based services to ease pressure on inpatient beds, and using standardised hospital designs to bring down costs.
Roads: Too many projects, not enough money
The commission delivers a pointed message on politicians' ambitious roading agenda.
The National Party has previously been criticised for the affordability and credibility of cost estimates on its proposed and committed Roads of National Significance (RONS)
Plans for the Government's 17 RONS, major public transport projects like Auckland's Northwestern Busway, and another road crossing over the Waitematā Harbour far exceeded the revenue likely to be available in the coming decades, the commission said.
Cost escalation has compounded the problem.
The user pays models will see some motorists pay tolls up to $6. (Source: 1News)
The Government's RONS projects were expected to cost significantly more per kilometre than both earlier motorway projects and the OECD average.
Meanwhile, the Northwestern Busway alone is expected to cost more per kilometre than many underground rail projects overseas.
But the commission opined that its analysis of major unfunded transport projects found that, in many corridors, capacity constraints appeared years away.
It also called for congestion charging in Auckland, a proposal which the Government and Labour have been progressing on a bipartisan basis — so far.
Hot button issue of housing intensification touched on
The plan also waded into the politically contentious issue of housing density, recommending councils commit to upzoning around key transport corridors to allow more homes in areas already served by infrastructure.
National's campaign chairperson drills into the details of the party's election-year policy on renewable energy and housing intensification. (Source: 1News)
Meeting the needs of a growing population would be the second-largest driver of infrastructure investment over the next 30 years, after renewing existing assets, the commission said. But how cities choose to grow would dramatically affect the cost.
Auckland Council's proposed Plan Change 120, which would open up transport corridors in the city for significantly more housing, has proved deeply contentious - and a call for more upzoning is likely to add fuel to that debate.
The plan warned that some councils were falling into what it called a "Growth Ponzi Scheme" - growing in ways that left them less financially resilient, not more.
"The way that our cities are growing, they're not generating enough revenue to pay for the infrastructure required for that growth. We've put for many of our cities, that looks like about 30 to 50% revenue sufficiency. That's a very troubling number," Cooper said.
Cross-party consensus sought
Infrastructure Minister Chris Bishop said the Government would publish a formal response to the plan in June 2026 and that he intended to engage other political parties in Parliament on its findings.
He had written to the business select committee seeking time for a special debate.
"Infrastructure lasts for generations. Where we can build durable consensus, we should."
Cooper told media the plan was designed to show transparently what pursuing any particularly large project would mean for trade-offs elsewhere.
"What we're trying to do with this is simply be able to say if there are particularly large projects out there, we want to be able to show transparently what that means for trade-offs for other projects and other needs.
"Up until recently ... particularly when we're thinking about these really big projects, we've done it in a way that hasn't made clear what else is at stake."
The plan's 16 recommendations include legislative change to require long-term investment and asset management plans, a consolidated assurance function for ministers, and stronger links between the commission's needs analysis and fiscal strategy.
The commission's ten priorities for the next decade
1. Lift hospital investment for an ageing population: Increase investment as a share of GDP to address ageing population demands and maintenance backlogs through clear long-term planning.
2. Complete catch up on renewals in the water sector and restore affordability: Sector affordability can be restored through national guidance on demand management, resourcing the economic regulator and providing assurance over investment proposals.
3. Implement time of use charging and fleetwide road user charges: This is essential for improving the efficiency of our urban road networks, particularly in congested cities.
4. Prioritise and sequence major land transport projects: Restore affordability by timing major road and rapid transit investments based on demonstrated demand and cost benchmarking, while using low-cost and targeted improvements first to lift network performance.
5. Manage assets on the downside: Actively plan for declining demand scenarios arising from changing demographics, technology and climate change, and explore asset recycling opportunities within portfolios to maintain value and affordability.
6. Prioritise adequate maintenance and renewals: Central government agencies must prioritise adequate funding to prevent asset deterioration and costly reactive fixes.
7. Identify cost-effective flood risk infrastructure: Climate change will intensify flooding and impact infrastructure, requiring effective community risk management approaches.
8. Commit to a durable resource management framework: New Zealand needs a durable legislative framework with spatial planning and national standards that can evolve through incremental amendments.
9. Commit to upzoning around key transport corridors: This will lead to more efficient use of water and other networks and maximise the value of transport infrastructure investments.
10. Take a predictable approach to electrify the economy: Achieving electrification and net zero carbon targets requires predictable market rules and policy settings rather than non-commercial government investment in electricity supply.
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