As part of our work on the New Zealand Infrastructure Strategy, we commissioned an independent report on the financing and funding of infrastructure in New Zealand.
Our first Infrastructure Strategy recognises that we’ll need more infrastructure, but it is not free and someone must pay for it. Good infrastructure decision-making takes place within and must be supported by a principled and fit-for-purpose funding and financing system.
Key findings of the report
Funding and financing decisions affect what infrastructure is delivered and who pays for it
How we choose to fund and finance infrastructure impacts on what projects are implemented, the community needs that are met and when they’re met, who can access infrastructure and how we use it.
A principled-approach enables good decisions about funding and financing to be made
This promotes funding mechanisms that establish a clear link between the cost of providing infrastructure and how the services are paid for.
There are many options about how to fund infrastructure. Pricing and user charges are standard practice in some sectors, while public subsidies are more common in others. Either way, infrastructure is ultimately funded by users, taxpayers or ratepayers. Choices about how infrastructure is funded affect how the costs are distributed between different people and over different generations.
There are many options about how to finance infrastructure
Some infrastructure is financed on a ‘pay as you go’ basis, meaning that revenues from current users pay for upgrades. Other infrastructure is financed using loans or equity investments, allowing up-front costs to be repaid over time. Choices about how infrastructure is financed can affect intergenerational equity. Effective financing spreads the costs of long-lived infrastructure fairly over time and may also speed up delivery by leveraging new sources of finance.
Let us know what you think
Our Infrastructure Strategy has the potential to shape New Zealand for decades to come, and it's important to us that everyone has the chance to have their say. Tell us know what you think about our analysis of financing and funding of infrastructure in New Zealand.
If you have any feedback or want to comment get in touch at firstname.lastname@example.org