The government is planning more investment in KiwiRail beyond the $1 billion allocated in this year's budget.
Finance Minister Grant Robertson said the two-year funding was enough to make up for historic under-investment in rail infrastructure but to be transformational, the state-owned enterprise KiwiRail would need more money.
"More needs to be done if rail is to play its part as a truly important mode in a multi-modal system," he said at a business meeting in Auckland.
Mr Robertson would not be drawn on how much more money the government was willing to give KiwiRail.
"That will come through in future budgets. You will just have to wait."
He said the government was reviewing how much further investment in the rail network might be needed.
"That report will be released very soon. What it indicates is that the under-investment in rail over a very long period will not just be solved in one budget."
The KiwiRail investment fitted with the wellbeing focus because it would reduce carbon emissions by taking trucks off the roads, as well as connect the regions, Mr Robertson said.
"On all of the counts, I believe that an investment in rail fits with that [wellbeing focus]."
"There will continue to be investment in our roading network, that is vitally important as well, but rail has been a neglected to the point that it has been run down and does not work for New Zealand any longer."