• Home
• NZ Economic Development
• Archive
• Economic Transformation
• Archive
• Growth & Innovation Framework Archive
• About the GIF
• infrastructure

• Archive

• Economic Transformation

• Archive

• Growth & Innovation Framework Archive

Within this section…

• Why be concerned about infrastructure?
• Taking Stock
• Contacts and links

Why be concerned about infrastructure?

Infrastructure is a critical foundation for growth. There are concerns that New Zealand's infrastructure might not be good enough to support an innovative high-value economy.

Infrastructure refers to:

• transport (roads, rail, ports and airports)
• electricity
• gas
• telecommunications
• water infrastructure.

Infrastructure raises public policy issues because:

• a lack of infrastructure may restrict what the economy and regions can produce
• oversupply is an inefficient use of scarce resources
• infrastructure can only be provided in large units
• assets may be "stranded" if they are overtaken by technological changes or similar events
• infrastructure assets typically have many users and it can be difficult to ensure that all users' quality, quantity and price expectations are met
• installing new infrastructure often involves long lead times
• infrastructure can significantly affect achieving sustainable development objectives, given it can have both positive and negative effects on the environment and on social outcomes.

We must have quality infrastructure at reasonable cost to achieve the government's goal of returning New Zealand's per capita income to the top half of the OECD.

Recent history

Current work on infrastructure began in response to concerns raised at the Government/Large Business Forum in October 2003, which suggested that our infrastructure hinders business growth and that existing policy would not remedy these concerns on its own.

The Growth and Innovation Advisory Board's May 2003 report, Generating Growth: Infrastructure [external website], prepared by Infometrics, supports this view. The report confirms that businesses view the availability, reliability and low price volatility of transport and energy services as a major aid to their growth.

Taking stock

The Ministry of Economic Development is leading an Infrastructure Stocktake [external website]. This work is part of the 2003/2004 Growth and Innovation Framework Budget package. An interdepartmental working group is overseeing the project, with representatives from all relevant departments and Local Government New Zealand.

Four consultancy reports have been commissioned as part of the infrastructure stocktake:

• Infrastructure audit [external website]: This provides a comprehensive summary of the current and planned infrastructure stock in New Zealand.
• Links between infrastructure and sustainable development [external website]: This discusses the positive and negative links between infrastructure and sustainable development, the nature of these links, and where tradeoffs and complementarities arise.
• Infrastructure policy framework [external website]: This provides a framework guiding decisions on policy design in infrastructure sectors. The framework considers issues such as:
  • addressing demand-side factors in infrastructure policy
  • the roles of central and local government
  • the level of service expected from infrastructure.
• Links between infrastructure and growth [external website]: This is a literature review on the relationship between infrastructure and growth.

The intended outcome of all this work is that businesses and consumers are confident that the infrastructure services they need now and in the future will be available at reasonable cost. This will enhance the role of infrastructure in promoting and supporting sustainable development.

The work is not intended to provide a "one size fits all" approach, or an "infrastructure plan". A sector-specific approach will still be required. Government and other stakeholders will augment this approach where there are cross-sectoral or unifying issues, such as the potential benefits of improved centralised capacity for trend and scenario analysis.