New Zealand infrastructure spending: High costs but poor value - Cameron Bagrie

Opinion byCameron Bagrie NZ Herald·21 Aug, 2026 11:00 PM5 mins to readCameron Bagrie is principal economist at Bagrie EconomicsEducation and infrastructureare both long-term investments, says Cameron Bagrie. "The infrastructure managers and engineers of tomorrow are the schoolkids of today."Here is the basic infrastructure equation - and it comes from the Infrastructure Commission.“We spend a lot on infrastructure, but we don’t always get good value. New Zealand invested around 5.8% of gross domestic product (GDP) annually on infrastructure over the past 20 years, making us one of the top spending countries in the Organisation for Economic Co-operation and Development (OECD).”“Yet we rank towards the bottom for efficiency, or ‘bang for buck’.“In 2022, we spent almost $5000 for every person in the country (in 2025 dollars).”“We have 1175 land-use zones across 67 territorial authorities. Japan – which has more than 20 times the population of New Zealand – has 13.”“New Zealand must get better at asset management. At present, asset management maturity varies between sectors, and tends to be lowest for central government social infrastructure providers like health, justice and education. Contributing factors include a lack of understanding and awareness of the importance of asset management, inadequate information on assets, a lack of transparency and accountability, and insufficient enforcement of best practices.” Prioritising the right projects, better assurance around projects, efficient legislation and regulation, better spatial planning, a better strategy for capital allowances across the political cycle that gives better funding signals, effective land transport funding, asset management