Result: Infrastructure
What are we seeking to achieve?
The Government has identified improving infrastructure as a priority within its medium-term economic strategy. Perceptions of infrastructure failures and bottlenecks are regularly cited as disincentives to private sector investment. This result has relevance to a broad range of infrastructure sectors, including the four key economic network infrastructures (transport, communications, water and energy) as well as social infrastructure such as hospitals, schools and prisons.
The Treasury undertakes a range of work in support of this priority, with a focus on optimising the contribution of infrastructure to economic growth by ensuring that the supply of infrastructure is secure and reliable and that its use and management are efficient. We will also focus on reducing the barriers to growth caused by bottlenecks or deficits in infrastructure and prioritise spending where it will deliver most benefits.
Infrastructure improvement can have positive benefits for other result areas. Substantial parts of New Zealand's physical infrastructure are owned and managed by the public sector (eg, roads). Many of the assets are also used by the public sector to deliver services (eg, education and health). Improving performance in this area therefore assists the Government in managing the Crown's balance sheet (supporting the management of Crown risks and balance sheet result), and in delivering better value for money in provision of public sector services (supporting the State sector performance result).
The National Infrastructure Unit (NIU) was created mid-way through 2008/09. It has a broad role that includes developing overarching infrastructure policy, preparing the National Infrastructure Plan, driving improved decision-making and asset-management practice in the public sector and developing a market for public private partnerships.
For more information on the NIU, visit: www.infrastructure.govt.nz
What will we do to achieve this?
We will achieve this through a focus on:
- enabling improved economic performance through New Zealand’s infrastructure, and
- optimising the Government’s investment in the State sector’s physical assets relative to service needs and net worth objectives.
In particular we will work to:
- identify and address regulatory or other impediments to private and public infrastructure investment
- ensure that public sector infrastructure investment is targeted at those opportunities that offer the best prospects for economic growth
- improve investor certainty across the economy, by presenting a clear picture of the Government’s and the wider public sector’s infrastructure strategy, policy, priorities and spending plans. The principal tool for this will be the ongoing development and updating of the National Infrastructure Plan
- provide frameworks, guidance and support across the public sector to assist in improving decision-making and management of public sector assets, to deliver better value for money, and
- develop and implement, in partnership with other government agencies and institutions, innovative approaches to procuring and managing public sector assets and the services delivered from them that will deliver improved value for money.
The NIU will also provide oversight and advice to the Government about specific major infrastructure investments; for example, broadband and rail.
How will we demonstrate success in achieving this?
| Impact measure for 3 to 5 years | Milestones for 2010/11 |
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New Zealand's infrastructure enables economic growth |
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Identify and seek removal of regulatory and other barriers to infrastructure development. Impact measure: Key stakeholders (eg, New Zealand Council for Infrastructure Development, Business New Zealand, Local Government New Zealand and Central Government Chief Executives) consider barriers to have been removed or reduced. |
Infrastructure Bill passed, Utilities Access Code agreed, to provide utilities with efficient and consistent access to transport corridors. Ensure that phase two of the Resource Management reform process recommends improvements to planning regulations (including, for example, the Resource Management Act 1991 and Historic Places Act 1993), to facilitate future infrastructure investment. |
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Ensure that Government's infrastructure investment is directed to where it will most likely deliver the greatest long-term economic benefits. Impact measure: Cost-benefit analysis undertaken in the course of development of major projects demonstrates that investment is directed to those projects with the greatest net benefits. |
Develop and embed prioritisation and investment assessment frameworks focused on economic performance. |
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Improve investor certainty by presenting a clear picture of the Government's and wider public sector's infrastructure strategy, policy, priorities and spending plans, in the National Infrastructure Plan. Providing clarity about the Government's approach to infrastructure improves certainty for domestic or overseas investors in all sectors of the economy. Impact measure: Key stakeholders |
Revised National Infrastructure Plan published with 10- to 30-year demand and service level analysis. This aims to quantify future public investment requirements, as a key input to ongoing development of infrastructure strategy and policy. Ensure that the Auckland spatial plan facilitates a coordinated approach to central and local government infrastructure investment. |
Government optimises its investment in the State Sector's physical assets relative to service needs and net worth objectives |
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The 15 Capital Intensive Agencies[1] have in place and actively use the standards, capability and information needed to drive the efficient and effective planning, investment, delivery and management of the Crown's major physical assets. Impact measure: Independent quality assurance processes embedded in business-as-usual demonstrate appropriate performance by agencies. |
Capital Asset Management project embedded within public sector business-as-usual:
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Deliver better value for money, through the use of innovative procurement models, from the management of major physical assets and the services delivered from them. Impact measure: Public private partnership projects approved where they demonstrate value-for-money improvements over the relevant public sector comparator. |
Subject to value-for-money tests, in partnership with the relevant public sector agency, take the first two public private partnership transactions to market. Develop a pipeline of projects to provide certainty to the market of the ongoing public private partnership programme. Promulgate a public private partnership toolkit (guidance on terms and conditions, risk matrix, public sector accounting treatment, tendering methodology) to assist procuring agencies to develop public private partnership projects. |
Notes
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[1]The 15 Capital Intensive Agencies comprise 11 departments, and four Crown agents. These are:
Departments: Conservation, Corrections, NZ Customs Service, NZ Defence Force, Ministry of Defence, Ministry of Education, Ministry of Health, IRD, Ministry of Justice, NZ Police, Ministry of Social Development
Crown agents: Housing NZ Corporation, Tertiary Education Commission, the District Health Board sector and NZ Transport Agency
