How will New Zealand pay for the infrastructure we need?
A National Infrastructure Planx
Traditional funding models – reaching the limits
A new approach to priorities and pricing
Reforming road user charges in New Zealand
Funding renewal of water infrastructure
Asset recycling for long-term sustainability
Capital recycling – M&A trends
Asset maintenance – looking after what we've got
New
Zealand doesn’t have a simple infrastructure spend problem but a value for money one: improving how infrastructure is planned, prioritised, funded, maintained and recycled will be critical. We must collectively do better.
How will New Zealand pay for the infrastructure we need?
“Stepping up to the task will require us doing things differently. If we continue with the status quo, we’ll fall further behind.”
Infrastructure has seldom strayed far from the headlines in New Zealand in recent years. Plans for new investment have been matched by news of weather-related infrastructure damage, the failure of aging assets and complaints about urban intensification.
Infrastructure in New Zealand has traditionally been funded through taxes, rates and user charges. That model has shown its limits. Fiscal headroom is constrained, council balance sheets are under pressure and competition for capital is intense. Recent volatility in global energy markets, including oil price spikes driven by events in the Middle East, will add further pressure to construction, transport and operating costs across the infrastructure system. And, as the cost of infrastructure rises, investment delays are compounding long-term affordability risks.
The February release of the National Infrastructure Plan by the New Zealand Infrastructure Commission, Te Waihanga, makes the cost of the status quo abundantly clear, highlighting near top of OECD spending
(around 5.8% of gross domestic product annually over the past 20 years), but bottom of OECD ‘bang for buck’ for our spend: fewer kilometres of road, rail or pipe per dollar than many other countries.2 “The current system isn’t working as it should,” as the report states.
The Plan highlights clearly that New Zealand doesn’t have a simple infrastructure spend problem but a value for money one. Improving how infrastructure is planned, prioritised, funded, maintained and recycled will be critical, not just absolute spending levels. With infrastructure funding likely to come under further pressure in the future as governments and households tighten their belts, the Commission notes the need to “get smarter” about how and where we direct those funds will be ever more important.3
In The Big Picture: Infrastructure Funding, we take a closer look at how infrastructure is funded in some key sectors, explore what might change and look at the future direction offered by the new Plan.
New Zealand Infrastructure Commission, Te Waihanga1
A National Infrastructure Plan
On 17 February the New Zealand Infrastructure Commission, Te Waihanga, released New Zealand’s first and much needed National Infrastructure Plan, setting out a 30-year system-wide view on how we can plan, fund, maintain and deliver infrastructure.
Rethinking the system
The Plan highlights certain weaknesses in the current framework. Central government invests almost half of all infrastructure investment every year and holds 45% of New Zealand’s total infrastructure stock. The Plan notes that half of all capital intensive agencies have self-reported that they don’t have comprehensive asset registers in place or have adequate plans for asset maintenance. Decisions can be shaped without sufficient assurance and half of all proposals for investment in the last three budget rounds did not have complete business cases.4 The system itself is fragmented and doesn’t have a sufficiently long-term focus.
Two-thirds of the NZ$275 billion of initiatives in the National Infrastructure Pipeline – NZ$193 billion of projects – are not yet fully funded.5
The Commission highlights the role prioritisation, sequencing, asset maintenance and demand management could play in funding our infrastructure needs. While the answers offered aren’t all new, the Plan comprehensively captures the systemic reform the Commission believes necessary to meet the challenges ahead. It does so through four themes and 16 recommendations for long-term systemic shifts.
A National Infrastructure Plan
Themes for change and system shifts6
Planning what New Zealand can afford
Looking after the assets New Zealand already has
Prioritising the right projects
Making it easier to build better
WHat are the next steps?
At the time of release, Infrastructure Minister Chris Bishop has said the Government will be studying the recommendations for long-term system shifts proposed, which include legislative change, and will publish its response to the Plan in June 2026. He also highlighted his intention to engage with other political parties on that response.7
1. Ensure capital allowances are based on need, informed both by the Commission’s independent assessment of long-term need and agencies’ asset management and investment plans.
2. Reform land transport funding and investment oversight to align investment with the revenue that will be available.
3. Introduce legislation requiring capital-intensive central government agencies to publish long-term investment and asset management plans aligned with fiscal strategy.
4. Extend the planning horizon to provide predictable funding signals from Government.
5. Adopt multi-year budgeting to reinforce high quality planning, delivery and asset management practices.
6. Legislate to require capital intensive agencies to report on asset information and asset management performance, as well as progress against investment and asset management plans.
7. Establish a consolidated assurance function to give ministers a system-wide overview across infrastructure planning, delivery, asset management performance and risk.
8. Establish an assurance function covering asset management and investment planning by capital-intensive central government agencies.
9. Apply an independent readiness assessment to major government-funded investment proposals.
10. Require infrastructure providers to keep project data current in the National Infrastructure Pipeline and strengthen data quality arrangements.
11. Commit to maintenance of a stable legislative framework for resource management to enable infrastructure development while managing environmental impacts.
12. Ensure spatial planning aligns infrastructure investment with land-use planning in the resource management system.
13. Set land use policy to enable optimal infrastructure use of both existing and new infrastructure.
14. Accelerate electricity infrastructure investment by establishing clear, coordinated policies supporting growth and emissions reduction.
15. Coordinate workforce planning and policy with infrastructure investment and asset management plans based on an independant review of long-term needs.
16. Take a consistent system-wide approach to leadership appointments, development and support in public-sector projects.
Traditional funding models: reaching the limits
WHy the status quo is under strain
There are a number of reasons why traditional funding approaches have failed to keep pace:
• General taxation, rates and grant funding are not always well matched to intergenerational assets with volatile or growing demand.
• Price signals are weak and user charging inconsistent. This means demand is harder to manage and assets are often used inefficiently (resulting in outcomes like congestion or premature capacity constraints).
• Stop/start funding cycles involving annual budgeting and shifting appropriations erode programme certainty, constrain supply-chain capacity and undermine whole-of-life optimisation.
• For projects funded by local government, a narrow revenue base and borrowing limits can delay growth-enabling projects even where there are strong economic factors in their favour.
• Concentrating delivery and performance risk on council balance sheets leaves fiscal positions exposed to cost escalation and schedule slippage.
Taken together, these settings make it difficult to bring investment forward at the pace required for growth and resilience as they struggle to capture the wider economic and social benefits created by infrastructure investment or manage demand risks.
Historically, New Zealanders have paid for infrastructure through central and local government revenues, primarily general taxation and rates and user charges.
That approach is increasingly under pressure as fiscal limits, debt settings and political trade-offs slow progress, both on the backlog of renewals and the new assets needed for growth.
At the same time, the societal benefits of many infrastructure assets exceed the private returns available for them. This limits the scope for market-led provision of funding.
The combined effect? A persistent funding gap that continues to place pressure on New Zealand’s communities and public finances.
A new approach to priorities and pricing
Priorities for the coming decade
The Plan lays out 10 priorities for the next 10 years, which it proposes should be progressed alongside the system-wide changes:10 1
INCREASE INVESTMENT IN HOSPITALS TO ADDRESS THE NEEDS OF AN AGING POPULATION.
Forward guidance released by the Commission indicates infrastructure spending will increase from just over NZ$20 billion a year to more than NZ$40 billion annually in the 2050’s, averaging about 6% of gross domestic product a year.8
Even accounting for slightly higher or lower spending, its analysis indicates that future spend will be within the bounds of what New Zealand has invested in infrastructure in the past.
However, the Plan proposes a more holistic approach towards how that money is spent in the future, based on a system-wide view. Factoring in anticipated demographic and economic changes suggests proportionately more spending for some areas –health and electricity – but less in others where demand will stabilise, such as roads and schools.9
2 3 4 5 6 7 8 9 10
Bell Gully
CATCH UP ON RENEWAL OF NATIONAL WATER INFRASTRUCTURE, RESTORE AFFORDABILITY (INCLUDING THROUGH DEMAND MANAGEMENT).
RING IN TIME- OF-USE CHARGING AND FLEETWIDE ROAD USER CHARGES TO GET MORE VALUE FROM EXISTING TRANSPORT NETWORKS.
PRIORITISE AND SEQUENCE MAJOR LAND TRANSPORT PROJECTS TO RESTORE AFFORDABILITY.
MANAGE ASSETS WHERE DEMAND WILL DECLINE.
PRIORITISE MAINTENANCE AND RENEWAL.
IDENTIFY COST-EFFECTIVE INFRASTRUCTURE TO MANAGE THE RISK OF FLOODING.
COMMIT TO AN ENDURING RESOURCE MANAGEMENT FRAMEWORK, WITH SPATIAL PLANNING AND NATIONAL STANDARDS THAT CAN EVOLVE INCREMENTALLY.
UPZONE AROUND KEY TRANSPORT CORRIDORS.
ADOPT A PREDICTABLE APPROACH TO ELECTRIFICATION WITH PREDICTABLE MARKET RULES AND POLICY SETTINGS.
Priorities and pricing – a new approach
Funding and pricing different types of infrastructure
While pricing and funding approaches currently vary across the sector, the Plan also sets out the Commission’s views on which approaches should apply for different types of infrastructure. It lays out a number of proposed best practice principles including:
• Matching funding to purpose: based on whether they are network, social or economic development assets.
• Network services: should largely be self-funded by users and direct beneficiaries (though targeted subsidies or transfers could be appropriate). In turn, prices should guide efficient investment and encourage appropriate use while efficiency gains should be shared with service improvements or lower prices benefiting users.
• Social infrastructure: essential public services should be funded from general taxes or rates to ensure equitable access. Different models for ownership, leasing or contracting should be chosen on value and cost efficiency.
• Place-based development: projects which target economic growth should pass a ‘market test’ and be able to demonstrate revenues from those who use or benefit from the projects.
WHat is changing?
Some of the shifts recommended in the Plan have already begun.
Recent guidance from the New Zealand Treasury and earlier advice from the Commission already emphasise disciplined investment management, including clearer problem definition, robust options analysis and a stronger focus on whole-of-life value. This is improving project selection and prioritisation, although it does not, by itself, expand fiscal headroom.
Work is progressing on diversifying revenue and delivery approaches to complement public funding while maintaining policy oversight. Policy options under consideration include targeted rates, congestion and road-user charges, value capture mechanisms and growth-linked levies, aiming to align costs with beneficiaries and manage demand.
At the same time, integrated, place-based arrangements such as City and Regional Deals, supported by multi-year funding frameworks seek to improve coordination and certainty. Balance sheet recycling – selling or repurposing mature assets to fund new investment – is being explored. So are partnership models that attract private capital alongside public funding (where appropriate and where value for money can be demonstrated). Water sector reform to strengthen governance, funding and delivery capability is underway.
We explore some of these developments in more depth in the following sections.
Change -
- is already
underway
Reforming road user charges in New Zealand
WHat the current model looks like
A range of transport revenue in New Zealand is funnelled into the National Land Transport Fund (NLTF), a dedicated fund for the construction and maintenance of roads, improvements, public transport investment and road safety initiatives.
Currently New Zealand operates a dual system:
• Road user charges (RUC) are paid by owners of diesel vehicles, heavy vehicles and electric vehicles as a pre-paid charge for every kilometre driven on a public road, with rates varying by vehicle weight.
• Fuel excise duty (FED) applies only to vehicles that use petrol and this cost is factored into the petrol pump price.
The exemption that allowed electric vehicles to avoid RUC ended in 2024. This followed the underlying policy objective behind the exemption being achieved, encouraging adoption of EVs until they represented about 2% of New Zealand’s light vehicle fleet.11
There have been considerable developments in the way New Zealand’s roads are funded in recent years, with more to come.
Reforming road user charges in New Zealand
Proposed reforms
TRANSITIONING THE PETROL FLEET FROM FED TO RUCS
Because RUCs are distance and weight-based, they link charges more directly to road use. While FED, unavoidable at the petrol pump, has been an efficient way to collect revenue in the past, differences in fuel economy mean that petrol vehicle users pay different amounts per kilometre travelled. This disparity has become more pronounced with the growth of fuel-efficient vehicles.
To address this and better align contributions with actual road use across vehicle types, the government intends to transition all light vehicles to the RUC system.
The reform will occur in stages. The first stage, modernisation of the current RUC system through legislative and regulatory reform, is currently underway through the Land Transport (Revenue) Amendment Bill (the land transport bill). This is intended to make the RUC system simpler and more manageable. Once it is in place, the government will look to transition the light petrol vehicle fleet from FED to RUC.
The land transport bill does not specify a date for this transition, reflecting the scale of change and reinforcing that the immediate focus is on improving the RUC system itself. The key changes proposed include:
• Removing requirements to display physical RUC labels.
• Enabling a competitive market for private RUC providers to issue licences and collect charges.
• Allowing a wider range of approved electronic distance recorders.
• Enabling RUC providers to offer more flexible payment options, such as monthly subscriptions or post-pay plans.
Privacy is a central consideration in the move towards an electronic road user charges system (eRUC), particularly around data collection methods (including any use of GPS) and the need for robust privacy safeguards.
The next steps
The land transport bill is currently at the select committee stage. Timing has yet to be confirmed. If enacted, RUC changes are expected to take effect approximately six months after Royal Assent is received.
TOLLING – SET TO EXPAND
Three toll roads are currently operating in New Zealand: Northern Gateway, Tauranga Eastern Link and Takitimu Drive. Annual toll revenue from these roads is about NZ$24 million, not enough to fully pay for their costs. They require additional funding support from the NLTF.12
Looking ahead, tolling is set to play a larger role and the government plans to develop a stronger and more flexible system to bring forward investment. Three additional toll roads have been approved and are under construction. Proposed reforms in the land transport bill allow corridor-wide tolling, indexing of tolls to inflation, maintaining a viable toll-free alternative and shifting liability for toll payment from the driver to a ‘registered person’ (generally the vehicle owner).
From a funding perspective, corridor pricing increases revenue potential, annual CPI adjustments aim to make tolling fairer and more predictable and shifting the liability to the registered vehicle owner is intended to improve collection efficiency.
Equity and fairness remain important considerations. Regular toll road users, such as freight operators, are likely to face substantial toll charges over time.
Funding renewal of water infrastructure
How the current system works
Under the Local Government (Water Services) Act 2025 (LGWSA), the final legislative step in the 'Local Water Done Well' initiative, councils retain ownership of water services. They can choose to deliver these services in-house, or through sole or joint council controlled organisations (CCOs) or through a consumer trust. The goal is to foster active collaboration between neighbouring councils, support smaller and rural councils, enable resource sharing, increase efficiency and lower costs for water users.
In December 2025, Local Government Minister Simon Watts said all council water service delivery plans had been assessed by the Department of Internal Affairs (DIA), and that ratepayers would benefit from financially sustainable, reliable water services. A service is considered financially sustainable if it generates enough revenue to fund long-term investment and meet regulatory
requirements. Of 67 territorial authorities, 44 councils have chosen the CCO model and 23 have opted for the in-house model, meaning 76% of New Zealand’s population have water delivered by a CCO.13
But the DIA determined that, over the next decade, councils will spend up to NZ$9 billion more on water infrastructure than they anticipate in their long-term plans. The capital investment needed to bring water infrastructure up to regulatory compliance totals NZ$47.9 billion.
To support intergenerational funding for renewals and growth, water organisations that are CCOs can access financing from the Local Government Funding Agency, subject to prudent criteria and parent support. This increased borrowing capacity reduces the pressure to fund investments through rates and other revenue.
Funding renewal of water infrastructure
The transition to volumentric user charges
Councils currently have discretion to charge for water in different ways, including fixed rates, connection fees, wastewater charges, and volumetric pricing. However, the LGWSA prescribes a five-year transition away from new water organisations using property values as a factor in setting water charges, towards mechanisms like water metering and volumetric charging.
Under the property value system, some properties pay a fixed annual amount each year through their rates, regardless of water consumption. This ‘uniform annual general charge’ is used in Christchurch, where most rates are based on property value and some charged as a fixed dollar amount to all properties.
Volumetric charging is sometimes considered controversial due to equity concerns, particularly where it may shift the burden from high-value properties towards higher-consumption households in lower-value homes. However, studies indicate volumetric charging leads to greater awareness of water consumption, and can reduce water use. This can deliver environmental benefits, offer the potential for deferral of growth-related capital expenditure, enable faster leak detection and help manage water losses.
Auckland has largely transitioned to a mostly volumetric system for water and wastewater already:
• Drinking water: Fully metered and billed volumetrically, with no fixed daily water charge.
• Wastewater: Metered, mostly volumetric, with a fixed annual charge.
Together, volumetric charging and the expansion of financing capacity create a more sustainable base for long-term renewals and growth of our water instructure.
Replacing development contributions with levies
The transitional reform from development contributions to development levies reshapes how the costs of that growth are recovered. As part of the 'Going for Housing Growth' programme, an exposure draft of the Local Government (Infrastructure Funding) Amendment Bill was released in November last year. It proposes replacing development contributions with development levies, to support a principle that ‘growth should pay for growth’ by equipping councils with increased flexibility to charge for the overall cost of growth infrastructure across an urban area. This has the effect of:
• Freeing up land for urban development.
• Improving infrastructure funding to support urban growth.
• Providing incentives for communities and councils to support growth.
THE CURRENT CONTRIBUTION SYSTEM
Under the Local Government Act 2002, councils can require development contributions at resource consent, building consent, certificate of acceptance or service connection stages. These charges fund capital expenditure on growth infrastructure, including water, wastewater, stormwater, reserves, community infrastructure and transport. Councils must estimate growth infrastructure costs and attribute them to areas planned for development, then recover these costs through one-off charges.
WHY REFORM?
The contribution approach was designed for a system where councils closely managed the release of urban land, which isn’t compatible with the fragmented development patterns seen. The first pillar of the ‘Going for Housing Growth’ programme supports freeing up land for urban development, which requires a flexible system rather than precise planning of where development will occur and what infrastructure will be required to support it.
THE RIGIDITY OF DEVELOPMENT CONTRIBUTIONS CAN CREATE ISSUES:
Councils cannot adequately adjust infrastructure plans in response to development
Councils under-recover from developers
Rate-payers cover the excess costs
The proposed levy system
The move to development levies means developers will be charged a proportion of the total cost of the capital spend needed to service long-term growth. Councils will continue to calculate levies using identified infrastructure projects but will be able to adapt plans to respond to growth, and use revenue from development levies to build the infrastructure required. Levies will be calculated based on the expected levels of growth and aggregate growth costs for each levy area. Instead of project by project specific charges tied to particular assets, councils will collectively charge for infrastructure across a whole area and most developers will pay the same base charge for each service.
Each service – water, stormwater, wastewater, transport, reserves and community infrastructure – will retain a separate levy. Councils will be able to charge a high-cost levy on top of a base levy for a service provided or areas with particularly high growth costs. Levies must be appropriate and will be subject to regulatory oversight.
WHAT DOES THIS CHANGE MEAN FOR THE DEVELOPMENT SECTOR?
High growth areas with high per-unit costs may see costs fall, as they are spread more widely. Well-serviced areas with lower development contributions may see costs rise.
The intention is to create a more flexible funding tool, with a more consistent standard for calculating charges across councils. Councils would be able to begin charging development levies from around 2028 with transitional phase in options to mitigate the impacts on local development.
Asset recycling for long-term sustainability
New Zealand’s infrastructure challenge is not only about the scale of investment needed, but about how capital is recycled and redeployed over time.
The Treasury’s latest investment statement, released in November 2025, shows public assets have grown by 30% (NZ$132 billion), while liabilities have risen by 35% (NZ$98 billion).14 Despite asset growth, the agency sees room for better asset management. Some assets are underperforming, and adopting a more formal capital recycling programme would support long-term sustainability.15
Asset recycling is a strategy that generally involves private investment in existing state-owned enterprises (SOEs) to fund new infrastructure. Different models can be considered when expanding the use of asset recycling in New Zealand. These include:
• The concession or leasing model, perhaps the most common structure, in which the private sector pays to secure the rights to a government-owned infrastructure asset for a set period.
• The joint venture model, in which the public owner and the private sector jointly manage the asset.
• Full privatisation, where the ownership interest is sold entirely and the proceeds reinvested in new infrastructure. This is useful for assets where ongoing government involvement is considered unnecessary or where the private sector is better placed to manage and operate the asset efficiently.
• The structured financing model, that leverages predictable revenue streams from existing public assets to secure private capital.
WHAT DOES ASSET RECYCLING LOOK LIKE?
A local example of successful asset recycling is Hawke’s Bay Regional Council’s sale of 45% of its stake in Napier Port funded a new wharf, completed in 2022 (ahead of schedule and within budget).16
Overseas models illustrate how to balance political interests with economic needs. The Restart NSW Fund in New South Wales has delivered over 817 local projects worth A$2.47 billion.17 The model determines funding through a benefit cost ratio analysis, with project recommendations subsequently submitted to the Treasurer of New South Wales for approval. Elsewhere, India’s National Monetisation Pipeline leases existing public infrastructure assets to private participants for a set period, generating funds to invest in greenfield infrastructure.
THE NEED FOR GUIDELINES
Public support for asset recycling solutions will remain front of mind for both Government and market participants. That support depends on dispelling fears that asset recycling equates to privatising (particularly in relation to essential services such as healthcare) and building public understanding of how it can improve such services. Regulatory considerations could provide this comfort. To support asset recycling, New Zealand needs three things.
• Strong asset management capability: a clear understanding of service outcomes, whole-of-life cost and community benefit.
• Public support in asset recycling: bolstered by legislative safeguards.
Capital recycling – M&A trends
M&A activity and transactions are a key mechanism by which privately held infrastructure and energy transition assets and business are recycled by existing owners. The drivers of M&A infrastructure transactions are as varied as the underlying assets themselves. They have included:
• Early stage developers who have taken their projects to a final investment decision or ready-to-build stage, selling those projects to larger more well-capitalised buyers who will take forward full development and commercial operation.
• Vendors of assets and businesses with stable (often regulated) underlying cash flows selling to long term infrastructure investors or funds.
• Existing asset owners selling out of assets to realise proceeds to fund new projects or simply seeking to sell to a more natural owner of the asset for a price premium.
Notable recent examples have been the sale of energy businesses with strong regulated cash flows (e.g., electricity distribution and gas business), transactions involving mobile tower and fibre businesses, the sale of mature PPP interests, and the sale of renewable energy projects (especially solar, BESS and wind) at various stages of development and operation. We expect a strong levels of M&A activity to continue in those sectors, as well as in other sectors such as social infrastructure, roads, ports, telecommunications/data centres, and quarries/mines.
Asset maintenance – looking after what we’ve got
The Plan highlights one fundamental shift in approach that may be vital. It suggests replacing and rebuilding New Zealand’s existing infrastructure will be the biggest driver of investment in the next 30 years, with up to 60 cents in each dollar18 spent on infrastructure funding in the future.
While information is often incomplete, the data suggests many central government assets are wearing out faster than they are being replaced. Maintenance and renewal programmes currently only represent about 30% of the total value of the National Infrastructure Pipeline. The Commission believes maintenance and renewal programmes are under-represented.19
That’s why asset maintenance is one of the Plan’s key themes.
Infrastructure funding and the IFF reform
The IFF Act enables an approved special purpose vehicle (SPV) to raise capital in order to fund infrastructure, with costs recovered over time through a statutory levy on beneficiaries in a defined levy district. Local authorities and urban development entities can sponsor proposals with central government approval.
The IFF Act was inspired by the innovative debt financing structure deployed in respect of the Milldale housing development. Milldale used an encumbrance model to reduce risk for lenders and combined Crown and private sector investments to accelerate and increase the provision of funds. Milldale demonstrated the model’s potential to bring forward network capacity while preserving council debt headroom, albeit with a complex, multi-party setup and long lead-times.
Tauranga City Council was then the first local authority to use the IFF Act allowing it to raise approx. NZ$175 million to reimburse Tauranga City Council's construction costs for up to thirteen selected transport projects across the region under the Western Bay of Plenty Transport System Plan (TSP). The TSP levy was intended to partially replace a targeted rate that Tauranga City Council was charging to fund its transport activity, thereby creating capacity for additional infrastructure investments.
Wellington City Council was the second local authority to raise funding utilising the IFF Act, raising NZ$400 million of funding to support the construction of a new wastewater sludge minimisation facility (SMF) at Moa Point. The levy applies differentially based on whether properties are connected to the SMF, with approximately 95% of the levy charged to connected properties and the remaining 5% to unconnected properties which still benefit from reduced waste and carbon emissions.
The Infrastructure Funding and Financing Act 2020 (IFF Act) is New Zealand’s bespoke ‘beneficiarypays’ framework, designed to deliver growth-enabling infrastructure without crowding council balance sheets.
IFF reform and the amendment bill
The Infrastructure Funding and Financing Amendment Bill (IFF amendment bill) targets the friction points observed since the IFF Act’s inception in 2020. In broad terms, it seeks to:
• Streamline proposal development and approval.
• Broaden practical scope.
• Improve levy certainty and recoverability .
The IFF amendment bill’s key policy themes include simplifying statutory steps and documentation, clarifying roles and risk allocation among sponsors, councils and SPVs, and strengthening the levy’s enforceability so financiers can price risk with greater confidence. It proposes to remove several discretions and mandatory considerations imposed on local authorities when approving infrastructure projects for funding under the IFF Act, requiring endorsement where legal requirements are met.
The bill is also aimed at making the IFF pathway more adaptable to a wider range of use cases beyond infrastructure for housing and urban development, broadening the scope to general purpose infrastructure and allowing entities such as NZTA, KiwiRail and water service organisations to access the regime. The direction of travel is towards clearer processes, more predictable levies, and fewer bespoke workarounds.
Emerging issues for market participants
For developers, IFF levies can sharpen feasibility by delivering bulk infrastructure earlier, but levy predictability across project stages remains critical.
For councils, integration with planning instruments and growth strategies is essential so that IFF-funded assets are sequenced and right-sized.
For financiers and sponsors, the durability of the statutory levy (its priority, collection mechanisms and default remedies) goes directly to credit appetite and pricing.
Participants will also be watching how the IFF amendment bill interacts with wider resource management and spatial planning reforms and the opportunities that this could create.
The opportunity
If enacted as proposed, the amendments should lower transaction costs and shorten lead-times, making IFF more viable for a wider range of projects and developers.
That could unlock housing acceleration even in locations where council balance sheets are constrained and enable greater private-sector participation in enabling works without the formality or complexity of full PPP structures.
TSP and SMF show the IFF model’s ability to mobilise capital at scale and on an aggregate project basis. The IFF amendment bill aims to make the next wave of IFF projects more routine and repeatable.
Our infrastructure practice
As the infrastructure sector undergoes fundamental reform, understanding and staying ahead of the fast-moving legislative and regulatory developments facing market participants is critical. Our deep and broad understanding of infrastructure, coupled with a pragmatic, commercial approach, has supported delivery of integrated, high-quality services to clients across sectors ranging from water and transport to energy and renewables. Our work has spanned social and digital infrastructure to PPPs.
Bell Gully’s multi-disciplinary infrastructure team has consistently been appointed to New Zealand’s most complex and transformative projects. We have acted for central government, local government, iwi and Māori organisations and private sector and investor clients on major projects throughout the country.
INDEPENDENT RECOGNITION
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We specialise in providing comprehensive advice across the entire lifecycle of infrastructure projects. From initial procurement, project structuring and financing to the construction, operation, maintenance, and asset disposal or acquisition, our team delivers expertise at every stage.
Our practice is consistently ranked by global legal directories as a market leader. Individually, all of the members of our infrastructure leadership group, including partners Angela Harford, Ian Becke, Natasha Garvan, David Coull and Sarah Anderson-Butler, are recognised as leaders in their fields by the same international legal directories.
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Our thanks to Bell Gully contributors Sam Lohrey, Jahko Tohaia, Hanna Kells and Abby Treloar for their support with this publication.
Sarah Anderson-Butler
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FUNDING AND FINANCING
Angela Harford
PARTNER
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STRUCTURING, FUNDING, CONTRACTING AND DELIVERY
Ian Becke
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STRUCTURING, FUNDING, CONTRACTING AND DELIVERY
Natasha Garvan
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David Coull
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Toni Forrest
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LOCAL GOVERNMENT, CITY AND REGIONAL DEALS
Endnotes
1. New Zealand Infrastructure Commission, Te Waihanga. (2026). National infrastructure plan 2026 (p. 5).
2. New Zealand Infrastructure Commission, Te Waihanga. (2026). National infrastructure plan 2026 (p. 25).
3. New Zealand Infrastructure Commission, Te Waihanga. (2026). National infrastructure plan 2026 (p. 29).
4. New Zealand Infrastructure Commission, Te Waihanga. (2026). National infrastructure plan 2026 (p. 24).
5. New Zealand Infrastructure Commission, Te Waihanga. (2026). National infrastructure plan 2026 (p. 35).
6. New Zealand Infrastructure Commission, Te Waihanga. (2026). National infrastructure plan 2026 (p. 15).
7. Beehive.govt.nz. (n.d.). National infrastructure plan delivered. https://www.beehive.govt.nz
8. New Zealand Infrastructure Commission, Te Waihanga. (2026). National infrastructure plan 2026 (p. 45). (In 2025 NZD terms.)
9. New Zealand Infrastructure Commission, Te Waihanga. (2026). National infrastructure plan 2026 (p. 41).
10. New Zealand Infrastructure Commission, Te Waihanga. (2026). National infrastructure plan 2026 (p. 14).
11. Electric vehicle owners to pay road user charges. (n.d.). Ministry of Transport. https://www.transport.govt.nz
12. Driving change: Road tolling and time-of-use charging in New Zealand. (n.d.). Ministry of Transport. https://www. transport.govt.nz
13. Watts, S. (2025, December 11). Local Water Done Well victory for ratepayers. Beehive.govt.nz. https://www.beehive. govt.nz/release/local-water-done-well-victory-ratepayers
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