Infrastructure Minister Chris Bishop delivered a line at the Infrastructure Commission symposium last week that should be printed on every Cabinet briefing paper from now until the next election: New Zealand is in the top 10% of the OECD for infrastructure spending, but in the bottom 10% for what it gets for that spend.
That is not a partisan attack. It is a bipartisan indictment. Both major parties built this system, and both have presided over a culture where projects are announced without business cases, repriced mid-stream, and cancelled when the government changes. The cost does not stay on the Crown’s balance sheet. It flows directly into the firms trying to build, invest, and hire around infrastructure that may or may not exist in three years.
$1.93 billion and nothing to show for it
The most visceral illustration of the stop-start habit is the tally of Labour-era programmes that consumed public money without producing physical assets. $1.2 billion went to Three Waters reform with no new pipes or treatment plants. $229 million was spent planning Auckland light rail without a metre of track laid. $167 million funded Let’s Get Wellington Moving before construction started. Another $121 million went to the Te Pūkenga merger, which was subsequently disestablished.
The light rail figure is especially damning. Auckland Mayor Wayne Brown noted the project had reached $700 million per kilometre versus $51 million per kilometre in France. That is not just political dysfunction. It is a system that has lost any connection between spending and outcomes.
Meanwhile, Treasury’s 2022 Investment Statement calculated a $210 billion infrastructure deficit. Closing it requires roughly $31 billion per year in capital investment over three decades. New Zealand currently spends about half that. The national infrastructure pipeline stands at $237.1 billion across 9,200-plus projects, but $112 billion of that remains unfunded.
The governance fix that doesn’t fix funding
The news peg is the government’s decision to shift oversight of major Crown-funded infrastructure from Treasury to the independent Infrastructure Commission, effective November 2026. The centrepiece is a standardised two-page “Fitness Assessment” for business cases seeking Cabinet endorsement.
Finance Minister Nicola Willis was blunt about why this is necessary: ‘Multiple project review tools across the investment system serve slightly different purposes and have different assessors, information requirements, reporting formats, and outputs’, she said, adding that none provide ministers with ‘unapologetically strong, clear, and actionable assurance.’
Bishop’s own symposium speech revealed that half of all capital-intensive central government agencies lack robust asset registers and that around half of all proposals in the last five Budgets did not have complete business cases. The governance reform targets this front-end failure. But it does nothing about the $112 billion funding gap, and the Infrastructure Commission’s own investment general manager Andy Hagan concedes a bipartisan pipeline is ‘a step too far’ for a 50-person organisation.
Private sector firms are absorbing the chaos
This is the angle most coverage misses. Infrastructure churn imposes direct costs on businesses that never built a road or laid a pipe.
New Zealand infrastructure developers collectively spend $1.29 billion annually on consenting alone. The average project spends 5.5% of its total budget on consenting versus 0.1-5% for UK and EU equivalents. Pre-construction costs hit 10% of project value compared to 3-5% in North America and the EU. And those costs keep climbing, with consenting costs up 70% since 2014 and processing times up 50%.
Then there is the workforce. AECOM New Zealand managing director Craig Davidson confirmed the industry lost 10-15% of its workers over 18 months due to uncertain funding. ‘If you have that certainty, you can invest in staff development,’ Davidson said. AECOM’s 2025 survey found only 20% of respondents had confidence in government financing mechanisms.
The Association of Consulting Engineers puts it plainly: ‘Major infrastructure projects can run longer than political cycles in New Zealand. When projects are placed on hold, or changes are made, there’s a negative impact for businesses and the wider productivity of the sector.’
The test nobody wants to take
Former minister Richard Prebble has proposed a simple litmus test for the emerging bipartisan consensus: will both parties submit all 140 projects over $100 million to cost-benefit analysis and walk away from those that fail? ‘If parties promise infrastructure that meets no test,’ Prebble writes, ‘the emerging consensus will prove an illusion.’
History suggests the illusion is more likely. The Infrastructure Commission’s National Infrastructure Plan notes that previous plans from 2010, 2011, and 2015 contained similar recommendations that were never fully implemented. This is the fourth attempt.
For business owners making capital decisions today, the practical question remains unchanged. You are operating in a country that maintains infrastructure for a landmass larger than the United Kingdom with a population the size of greater Sydney, governed by three-year cycles with no upper house to impose continuity. The governance reform is welcome. But until the political class demonstrates it can sustain a pipeline beyond one electoral term, every business investment that depends on public infrastructure carries a political risk premium that no fitness assessment can remove.
Sources
- The Infrastructure New Zealand Didn’t Build (2026-04)
- Can NZ afford to keep flip-flopping on infrastructure projects? (2026-04-23)
- Infrastructure Commission to oversee major projects under new government plan (2026-04)
- The Cost of Consenting Infrastructure Projects in New Zealand
- Uncertain funding, politics hindering infrastructure and building development – report
- Pipeline certainty – ACE NZ
- How to achieve political bipartisanship on infrastructure – Richard Prebble
- New Zealand’s first national infrastructure plan unveiled