3 Mar 2010

NZ must continue to invest in infrastructure - English

7:10 am on 3 March 2010

Finance Minister Bill English says New Zealand can't afford not to invest in infrastructure, even though its debt is forecast to blow out to $250 billion by 2014.

Mr English says 10 years ago the country owed the rest of the world $100 billion, but now its debt is $170 billion and rising.

He revealed the latest forecasts on national debt when releasing the Government's National Infrastructure Plan in Auckland on Tuesday.

Mr English says most of the debt is held by households and businesses, but government debt will rise to $60 billion by 2014.

Despite the increase, the Government will still borrow to invest in roads, ultra-fast broadband, schools and other infrastructure, he says.

The National Infrastructure Plan reveals there are no looming crises, but little is known about what physical assets will be needed in 10 to 20 years.

The Government spends about $6 billion a year maintaining and expanding the $110 billion worth of physical assets that it owns.

Mr English says it is important that investment is well managed and the aim of the plan is to improve the Government's planning and management of infrastructure.

The plan has highlighted shortcomings but they are being addressed by increased investment, particularly in roads, the national electricity grid and ultra-fast broadband, he says.

Longer term framework

Business New Zealand says the Government needs to spell out more details about investment in infrastructure in order to unlock private sector capital.

Chief executive Phil O'Reilly says the plan provides a useful stocktake, but a longer-term framework is needed to unlock private sector involvement.

"Businesses will tend to invest more, and earlier, of their own money if it is clear to them what government's investing," he says.

"We're not after a big long list of what the government is going to invest in over the next 20 years, but much more, I think, some sort of process by which Government can make it clearer how they are going to think about investment."