Something is seriously wrong with New Zealand’s public wealth. We rank near the top globally for per-capita resources and assets - ahead of most OECD nations. On some measures, only Saudi Arabia eclipses us. Yet our public services are crumbling and we cannot afford to fund or maintain critical infrastructure.
The scale of our natural wealth may come as a surprise to many. But our endowment spans an extraordinary range. World-class agricultural land stretches across both islands. Our renewable electricity generation ranks among the highest in the OECD. Our fisheries rank among the world’s most extensive, while forests blanket 37% of our land. We even possess significant mineral deposits, though these remain largely unexplored.
Despite our wealth - both public and private - we languish at 22nd place in the OECD for GDP per capita. Our prosperity trails far behind comparable nations like Australia and Ireland. Treasury has estimated our infrastructure needs $210 billion to reach adequate levels. Our productivity growth remains dismal.
We have settled for being passive custodians rather than making these resources work for us. The result is billions in capital tied up in an underperforming Crown and local government balance sheets while critical infrastructure crumbles.
Our infrastructure spending efficiency ranks in the bottom 10% of high-income countries, with construction costs rising one-third faster than prices elsewhere in the economy. Infrastructure productivity growth lags at just one-third the rate of the overall economy.
We are not just spending too little – we are getting poor value from what we do spend.
This systemic inefficiency helps explain why
New Zealand faces a $210bn infrastructure deficit despite spending 5.5% of GDP on infrastructure - more than both Australia and the OECD median. It is a problem of management and delivery, not merely funding.
OPINION: Despite our wealth our prosperity trails behind Australia and Ireland.
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