Category: Military Intelligence

Source: NZ Music Month takes to the streets

Good morning. It’s great to be here – in spirit – at the 2025 Apōpō Congress.
I am a fierce proponent of asset management, and I also enjoy the Te Pae Convention Centre, so it’s a shame I can’t be there with you all in person. 
I’d like to thank Apōpō for hosting this congress and for keeping the conversation on asset management learnings and best-practice going for over 75 years.
Better asset management is key to the success of the Government’s plan to go for economic growth and enhance New Zealanders’ quality of life.
Asset management may not be the sexiest aspect of the infrastructure system – as it has to compete with new, big, and exciting projects – but everyone knows, if you don’t paint the weatherboards on your house, the wood will rot. 
And billion-dollar infrastructure is fundamentally no different.
Looking after what we have means our infrastructure will last longer, be more reliable, and be more resilient to shocks and stresses. For me, good asset management is a minimum requirement, not an optional extra.
So, today I am announcing a comprehensive work programme that Cabinet has agreed to that will improve asset management practice across central government. 
The aim of this work is to provide safer, longer lasting and more reliable infrastructure services; and to achieve better value for money by making the most of what we have.
But before I get into that, let me briefly touch on my six infrastructure priorities and where the Government is at on each of them. 
My six priorities as Minister for Infrastructure
Last year, I mapped out what I want from the infrastructure system.
I want the private sector to invest and build here, because they are confident in the pipeline and are enabled to get on with it by an efficient and fair consenting system. 
And I want the public to enjoy infrastructure that is safe, reliable, accessible, and good value for money. 
To achieve this, I’m focused on six priorities as Infrastructure Minister:

Establishing National Infrastructure Funding and Financing Ltd,
Developing a 30-year National Infrastructure Plan,
Improving infrastructure funding and financing,
Improving the consenting framework,
Improving education and health infrastructure, and last but not least –
Strengthening asset management.

These priorities are in response to what the coalition Government has heard from industry and infrastructure experts, both in New Zealand and overseas.
National Infrastructure Funding and Financing Ltd
Let’s start with National Infrastructure Funding and Financing, which we call NIFFCo. 
On the 1st of December last year, we established NIFFCo to:

Act as the Crown’s ‘shopfront’ to facilitate private sector investment in infrastructure – including receiving and evaluating Market Led Proposals.
Partner with agencies, and in some cases, local government, on projects involving complex procurement, alternative funding mechanisms, and private finance – including Public Private Partnerships (PPPs).
Administer central government infrastructure funds.

NIFFCo has already started lifting the government’s commercial capability and has deployed expertise into agencies that are working on complex Public Private Partnership (PPP) projects including the Northland Road of National Significance and Christchurch Men’s Prison. 
Off the back of the New Zealand Infrastructure Investment Summit, NIFFCo has also started engaging with domestic and international debt and equity markets to help connect New Zealand projects to suitable capital.
Developing a 30-year National Infrastructure Plan
Now, let’s move to my second priority, the 30-year National Infrastructure Plan.
The industry has asked for a long-term plan and pipeline so that they can invest in people and equipment. We have heard them, it’s the right thing to do, and we are doing it.
The New Zealand Infrastructure Commission is developing the Plan, which will outline an independent and expert view on New Zealand’s infrastructure needs over the next 30 years, planned investments over the next 10 years, and recommendations on priority projects and reforms that can fill the gap between what we have and what need.
The draft plan is on track to go out for public consultation next month, with the final plan due to me by the end of this year. 
I encourage you to provide feedback on the Plan, particularly in the areas of asset management. 
Improving infrastructure funding and financing 
Now, let’s talk about my third priority, Improving infrastructure funding and financing. 
Public infrastructure in New Zealand has historically been primarily funded by taxpayers or ratepayers. 
But our heavy reliance on this blunt approach is not serving New Zealand well and has led to perverse outcomes including congestion, run-down assets, and the unresponsive provision of enabling infrastructure – contributing to unaffordable housing.
Last year, we released a suite of new and improved frameworks and guidance including:

Treasury’s new Funding and Financing framework,
The Government’s refreshed PPP policy,
Strategic Leasing Guidance, and
Guideline for Market Led Proposals. 

The collective purpose of these documents is to help the Government use its balance sheet more strategically, apply good commercial disciplines to investment, and be a more sophisticated client of infrastructure. 
This year I have focused on establishing new funding and financing tools. In February, I announced five specific changes to New Zealand’s funding and financing toolkit to make it easier for councils and central government to provide infrastructure to support urban growth. 
I won’t cover all of these, but the most relevant to people here, is that we are shifting away from Development Contributions to a new Development Levy System that will enable council to fully recover the costs of housing growth from growth.
This change means ratepayers will no longer need to cross subsidise growth to the same extent (if at all) – freeing up rates to go towards maintenance backlogs. 
The Government is progressing amendments to the Local Government Act 2002 this year, so that Councils will be able to move to the new Development Levy System through their 2027 Long-Term Plan cycle.
Improving the consenting framework
Now, let’s move onto my fourth priority, improving the consenting framework. 
As many of you will know, the resource management system is broken. 
It achieves the worst of both worlds: it stifles development and fails to protect the environment. In many ways, our currently planning system is one of the root causes of our infrastructure deficit.
So, we are taking action. 
In 2023, we repealed the Natural and Built Environment Act and Spatial Planning Act.
In 2024, we introduced the Fast Track Approvals Act, which provides a one-stop shop for projects with significant regional and national benefits to apply for and access approvals, resource consents, and permits across nine different Acts, all in the one process.
The Government listed 149 projects in the Act itself, fast-tracking them in the fast-track process. More projects can be referred into the process too.  
These 149 projects represent up to 55,000 new homes; 180 kilometres of new road, rail, and public transport routes; three gigawatts in additional generation capacity; and multiple mining and aquaculture projects. 
And this year, the Government is replacing the entire resource management system – 
We will put a new system in place that is effects based and embraces standardisation, meaning fewer and faster consents. We plan to have the two Acts introduced to Parliament mid-this year. 
Improving education and health infrastructure
I won’t go into too much detail of my, fifth priority, improving education and health infrastructure. I will just quickly say that this government is moving towards: 

More standardised, repeatable designs,
More modular and staged builds, and
More strategic procurement – including by using a panel of contractors and partners for large programmes or packages of work.

Poor asset management practices 
Now, let’s talk in detail about my sixth priority – strengthening asset management. 
I think we need to be honest about the fact that we’ve done asset management poorly in central government for decades.
Too often we see the result of a lack of care in managing the infrastructure assets entrusted to agencies. 
I can rattle off too many examples of things gone wrong:

Schools in Auckland with leaking roofs and rotting buildings;
Half of justice buildings reported to be in “poor” or “very poor” condition;
Military homes in Waiouru infested with black mould;
A police custody suite in Hawke’s Bay with so many leaks that the roof had to be covered with plastic tarpaulin; and
A hospital in Whangārei where the roof leaked when it rained, the surgical wing was on a lean, raw sewage was found seeping into the walls, and – to top it all off – those walls were riddled with asbestos. 

This is simply not good enough for New Zealanders. 
It would be comforting to pretend that these are isolated anecdotes of poor outcomes. And it would be easy to say that “all we need is a bit more funding for emergency repairs to plug some leaks and patch up some roofs”. 
But this pattern of ‘build and forget’ repeats too often for this to be anything other than a systematic issue. 
And you don’t need to take my word for it. 
There is a growing analytical evidence base of unacceptable asset management practice:

New Zealand ranks fourth to last for asset management in the OECD’s infrastructure survey, and
Several central government agencies do not comply with mandatory requirements set out by Cabinet as outlined in Cabinet Office circular (23) 9 – including requirements related to depreciation funding, asset management plans, and asset registers.

The contrast between the performance of central government and that of the private sector, regulated utilities, and even local government is also stark. Let’s use the ratio of annual spending on renewals and maintenance, relative to asset depreciation, as a proxy for asset management performance.
The private sector and local government have ratios of approximately [1] and [0.75] respectively. 
For central government agencies, this metric is often impossible to measure, because it isn’t being recorded and reported. And where the data does exist, such as for state highways, the results are significantly worse, with a ratio of [0.35].
These poor asset management practices are undermining this Government’s infrastructure objectives and contributing to our significant infrastructure deficit – which is expected to grow to around $210 billion by 2050.
Our maintenance and renewal challenge
In fact, one of the biggest challenges facing New Zealand’s infrastructure sector is the cost and resources needed to repair and replace assets that are wearing out. 
The Infrastructure Commission tells me that for every $40 spent on new infrastructure, we should be investing $60 in maintenance and renewals.
If we don’t prioritise and deliver this spending and sort our asset management practices now, our problems are only going to get bigger. 
This is driven by three macro trends.
For one, the amount New Zealand needs to spend on asset management will continue to increase as the assets built during the post-war investment boom of the 1950s to 1990s wear out.
Second, asset management needs will increase in some sectors as demographics change – for example, more focus will be needed on health facilities as our population ages.
Third, the risks we face from natural hazards will continue to become more acute. New Zealand already ranks second in the OECD in expected annual losses from natural hazards. And asset owners won’t be able to make informed trade-offs between insurance, relocation, and resilience if they don’t have a strong base of asset management practice to build from – including knowing what they own, where it is, what conditions it’s in, and what risks it faces.
I feel like I am preaching to the choir – but, as you know – it is important to get asset management right.
And some sectors do get asset management more right than others. 
For example, regulated utilities like energy perform well due to economic incentives, and regulatory regimes with strong transparency, oversight and audit requirements.
Taking a step back – regulated utilities, local government, and central government all have different rules and enforcement mechanisms that impact asset performance, with central government holding the regulated and local government sectors to a higher standard than it does itself.  
The private sector is characterised by oversight through market discipline, economic regulation, and minimum service quality standards.
Local government has strong legislative requirements for planning and asset management, supported by audit and transparency requirements. For example, the Local Government Act requires reporting on infrastructure spending by category including maintenance and renewal, which is then audited by the Office of the Auditor General.
In central government we primarily rely on the requirements set through the Cabinet Office circular on Investment Management and Asset Performance in Departments and Other Entities, or, more commonly known as CO (23) 9. 
External transparency on central government infrastructure (like age, condition, location, and utilisation) is limited at best, making it difficult for the public to be confident that it is being managed appropriately.
This is a very complex system to fix. There is no single factor or actor that accounts for why central government is struggling so much to manage its assets effectively. 
To be clear, it’s not that we don’t have hard-working asset management professionals. Because I know we have some brilliant asset managers doing fantastic work. 
But too many of you are frustrated by a system that simply isn’t set up to empower you to do what is needed.
In my view, our asset management performance is the result of four complex inter-related issues. 
First, central government does not treat asset management as a fundamental component of service delivery. Top-down fiscal constraints, changing service expectations and stakeholder pressures mean that asset management is often de-prioritised in favour of new investment or new operating spending. 
Second, agencies do not have good enough information on their assets. So, decision-makers like agency officials, and Ministers like me lack the information needed to make good decisions and to be held accountable for them.
Third, governance is weak. Compared to regulated utilities and local government, our systems, processes, and rules for ensuring that asset management is being carried out properly are not strong enough.
Fourth, visibility and support for asset management is lacking at senior levels within agencies. Nobody in the audience will be shocked to hear me say that awareness, visibility, and support for asset management is often lacking at senior levels. We simply don’t invest enough in our people. This is true in some parts of the private sector and local government, but it is particularly true in central government. 
Improving central government asset management 
So, that’s the doom and gloom part over. Let’s get onto how we plan to fix the system. 
Today, I am excited to announce that Cabinet has agreed to an all-of-Government work programme that will improve central government asset management and performance, with a focus on infrastructure.
My goal is to provide safer and more reliable infrastructure services to New Zealanders; and to achieve better value for money by making the most of what we have.
This work programme will take place across two phases. 
Phase 1 will roll out this year, delivering quick wins that drive real improvements. But that is just the start. Next year, we start on Phase 2, which will deliver more fundamental changes to how we look after our assets.
Phase 1
Let’s start with Phase 1. Phase 1 is about providing clarity on what ‘good’ looks like and ensuring that there are better tools to help central government agencies succeed. 
The Infrastructure Commission has three actions under Phase 1.
First, the Commission is assessing New Zealand’s investment and asset management settings for central government using the ‘Public Investment Management Assessment’ (PIMA). This international best-practice framework was developed by the IMF in 2015.
The Commission will release the PIMA ‘self-assessment’ report alongside the National Infrastructure Plan later this year. It will be an invaluable source of evidence on how we can improve our investment systems – more on that soon.
Second, the Commission will publish detailed guidance that agencies will need to follow on asset management; long-term planning; and related performance, assurance, and accountability indicators.
At the moment, Treasury sets out high-level investment management and asset performance requirements for departments, Crown entities, and companies listed in Schedule 4A of the Public Finance Act through Cabinet Office circular CO (23) 9. 
Over and above Cabinet setting clear rules for asset management it is crucial that we help agencies understand how they meet their obligations. Currently, there is limited detailed guidance showing agencies what good looks like. 
More detailed guidance can help fill this gap and will help agencies to provide useful and consistent information to decision makers and the public – including indicators that will show whether agencies are delivering value for money from their planning and investment activities.
Third, the Commission is partnering with Āpōpō to build a new ‘community of practice’ that will lift the capability of public service asset management professionals through events.  
Phase 1 of this work programme, also includes:

the Treasury continuing work to update their Better Business Case and Gateway Frameworks, and
Potentially developing a National Underground Asset Register – Officials will provide me advice on opportunities to scale the Wellington City Council’s  underground asset register for use across New Zealand.

Phase 2
Phase 2 is about driving more fundamental changes to system settings to ensure that we see sustained improvements in asset management.
Phase 2 will be informed by the National Infrastructure Plan but will ultimately be implemented through the Government response to the Plan, which I expect will include changes to the Investment Management System.
The Commission is currently developing the National Infrastructure Plan to ensure greater stability of infrastructure priorities and to help New Zealand plan, fund, and deliver important infrastructure. 
The Commission has informed me that the Plan will include recommendations on how to strengthen central government’s Investment Management System.
The Commission are thinking of issues such as: 

Strengthening the Public Finance Act to require agencies to periodically develop long-term investment plans (including asset management) and strengthening reporting requirements to increase transparency on spending on maintenance and renewals.
Strengthening non-legislative reporting requirements to improve transparency over asset management outcomes.
Establishing oversight and review requirements for asset management planning.
Explicitly incorporating assessments of bottom-up infrastructure needs, including spending on asset management and renewals, into fiscal strategies
And strengthening incentives for better asset management practice by, for example, linking investment decision making to agency asset management capability or ringfencing depreciation funding. 

It is important to note that the National Infrastructure Plan is a ‘strategy report’ and is rightly produced independently from Government. 
As such, I will consider the final recommendations made by the Commission and will implement Phase 2 of the Asset Management Work Programme through the Government’s response to the Plan in 2026.
Over the next year, the Treasury is also working to update Cabinet Office circular CO (23) 9. The update of CO (23) 9 is a great opportunity to take on evidence and findings from the National Infrastructure Plan to strengthen Cabinet’s expectations on investment planning, assurance, and asset management practices.
I have asked Treasury officials to consider the findings of the National Infrastructure Plan when updating the Circular.
But to be clear, all options remain on the table to improve asset management – including changes to the law. 
Conclusion
To conclude, I would like to say thank you again for inviting me to speak. 
Getting asset management right is one of my top priorities as Minister for Infrastructure, and I will need your help to do it.
The size of the prize is significant – 
Improving how we look after our assets will improve the lives of New Zealanders through safer and more resilient infrastructure services. It will drive better value for money from our investments – putting downward pressure on the cost-of-living and freeing up funds for other Government priorities.
Better asset management is also good for economic growth, as higher-quality infrastructure will reduce disruptions, encourage investment, and improve productivity.
It won’t be a quick fix.
The challenges we face are deep-rooted and systemic. But they are not insurmountable, if we ambitious enough to take them on, and disciplined enough to overcome them. 
Thank you. 

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