Infrastructure investment set for overhaul

The Government is introducing a major shake-up of how infrastructure projects are assessed and approved, with a stronger focus on independent oversight, clearer advice to Ministers, and improved value for money in public investment.

 

Infrastructure Minister Chris Bishop and Finance Minister Nicola Willis say changes to the Investment Management System are designed to ensure New Zealand’s infrastructure pipeline is better informed, more consistent, and more accountable, particularly when it comes to large-scale spending decisions.

 

A key change will see responsibility for external assurance of infrastructure projects shift from Treasury to the independent New Zealand Infrastructure Commission. The move is intended to reduce duplication, improve consistency in project assessments, and provide Ministers with clearer “go or no-go” advice earlier in the process.

 

Willis says the current system has become overly complex, with multiple assurance tools operating across agencies, often producing inconsistent formats and overlapping assessments.

 

“None of these tools provide Ministers with unapologetically strong, clear and actionable assurance focused on substance rather than bureaucracy,” she says. “What Ministers need is clear, frankly expressed ‘go/no-go’ expert advice on each project.”

 

She says this has contributed to situations where poorly performing projects can progress too far through planning stages, resulting in significant public expenditure on business cases and early design work that may not ultimately proceed.

 

The reforms aim to simplify this environment by consolidating existing assurance processes, including elements of the Treasury’s Gateway Review process and the Infrastructure Priorities Programme, into a more streamlined system.

 

Under the new model, the Infrastructure Commission will take a stronger role in reviewing major infrastructure proposals well before final decisions are made. It will assess whether projects meet a genuine need, represent value for money, and are realistically deliverable.

 

The NZ Transport Agency will also come under the updated framework, with high-risk projects and those outside the National Land Transport Fund subject to additional independent assurance.

 

Alongside this shift, Treasury will introduce a standardised two-page “Fitness Assessment” for all major business cases going to Cabinet. This will summarise key risks, contextualise proposals against an agency’s past performance, and consider the wider fiscal environment.

 

A new assurance function will also be established for capital-intensive agencies, focusing on long-term asset management and investment planning. The Infrastructure Commission will lead assurance of these plans, while Treasury retains responsibility for policy settings.

 

Greater Ministerial oversight is another key feature of the reforms. The Infrastructure and Investment Ministers Group will now review high-profile, high-risk projects and long-term investment plans before they reach Cabinet, as well as monitor delivery after approval.

 

Bishop says the changes reflect recommendations from the National Infrastructure Plan and are aimed at improving the quality and discipline of public investment decisions.

 

“For Ministers, this means they can confidently say ‘yes’ or ‘no’ to projects early, asset management plans, and long-term capital plans knowing that their decisions are informed by strong evidence and independent, expert advice,” he says.

 

He adds that stronger assurance will also improve transparency for the public, allowing greater scrutiny of government decisions, particularly where projects proceed despite unfavourable assessments.

 

For the construction and infrastructure sector, the Government expects the changes to reduce delays and stop-start project delivery by allowing stronger projects to progress more efficiently, while weaker proposals are filtered out earlier.

 

However, agencies will be expected to lift capability in asset management planning and business case development, with Ministers signalling a higher standard of evidence and preparedness across the system.

 

The Government argues that by tightening oversight and improving early-stage decision-making, billions of dollars in public investment will be better targeted, reducing waste and improving long-term infrastructure performance.