By Michelle McCormick, Policy Director, Infrastructure New Zealand
The recent opening of Te Ahu a Turanga – Manawatū Tararua Highway marks a major milestone for regional connectivity, resilience and productivity in the lower North Island.
Te Ahu a Turanga – Manawatū Tararua Highwayis a transformational piece of infrastructure that restores a vital fit-for-purpose link between the east and west sides of the island, crossing the intersection of the Tararua and Ruahine ranges.
The original Manawatū Gorge highway had been affected by frequent slips and rockfalls, which had resulted in closures lasting more than 12 months, with costs incurred since 2011 being over $21 million.
It has been eight years since the Manawatū Gorge route was closed following a significant landslide. Since then, communities, including our eighth-largest city (Palmerston North), and freight operators have been forced to use windy, narrow, and time-consuming local roads. The new highway is a project that is therefore rightly celebrated. It also demonstrates a model for future major projects, with iwi involved for the first time as full alliance partners alongside government and design, engineering, and construction firms.
But even as we recognise these achievements, we must also reflect on a lost opportunity, one that speaks to the broader challenge of how New Zealand funds and manages its infrastructure assets into the future.
The government’s pronouncement not to toll the Manawatū Tararua Highway after initially considering it was a disappointing decision that prioritised local politics over the internationally proven principles of road pricing and user pays.
The fact is, new infrastructure, particularly transport infrastructure, comes with significant construction, as well as life cycle and management costs that all need to be funded. We cannot afford to keep shifting the entire burden of those costs onto the taxpayer or general road user when fairer and more direct funding mechanisms are also available.
Tolling is one of the few tools we have that directly links infrastructure use with its funding. It helps ensure that the people who benefit most from a road also contribute to its construction, maintenance and operational costs. It is not about penalising local communities, but actually ensuring that they will have a modern, fit-for-purpose asset that is well maintained long into the future.
The government ultimately walked away from tolling the Manawatū Tararua Highway due to local opposition. Infrastructure New Zealand fully understands the sensitivity to such political considerations, but if New Zealand is to address our infrastructure and productivity deficits we need to make decisions with long-term national benefit in mind. Modern infrastructure needs modern funding tools. Doing things the same old way we have done them before will inevitably lead to the same sub-optimal results – and rob our future transport investment choices, too.
To put it into a context beyond transport, it’s helpful to look at another recent announcement – Transpower’s proposal to invest $1.4 billion in replacing and upgrading the Cook Strait electricity cables. This is a vital piece of energy infrastructure connecting our islands, enabling energy security and supporting the transition to a more electrified economy.
How is it to be paid for? Not through one-off government grants or general taxation. Instead, the cost will be spread across electricity users via increased transmission charges, phased over the expected 40-year life of the asset. It’s a user‑pays model reflecting the benefits of the asset to its users, but spread over the time of the asset’s use.
You may say that undersea power cables and state highways bare no relationship, but as critical nation-building infrastructure supporting the connectivity, and economic and social ambitions of communities, they are more alike than they initially appear.
The Cook Strait cables proposal is an example of the sensible use of long-term infrastructure funding principles and provides somewhat of a blueprint for other areas of infrastructure, including transport and water services.
Infrastructure New Zealand is not alone in advocating for greater user-pays as a means of funding the infrastructure we need. The NZ Infrastructure Commission has highlighted user charging as one of the few viable long-term options to address New Zealand’s growing infrastructure funding gap. Internationally, it is commonplace, although I note the Trump Administration’s efforts to overturn congestion charging in New York, despite its successful operation.
So, where does the decision to not push ahead with tolling leave the Manawatū Tararua Highway? It certainly doesn’t eliminate the cost of maintenance, renewals and operations, but it buries it within the National Land Transport Fund, imposing a further burden on that already overstretched funding mechanism and hiding the direct costs within it. If we are to confront the infrastructure deficit that’s helping to suppress New Zealand’s economic productivity, we need funding models that reflect the full life cycle of our assets and provide New Zealanders with greater transparency around where their money is going.
The opening of the Manawatū Tararua Highway should have marked not just a win for the lower North Island and its communities, but also a turning point in how we address our future infrastructure funding needs. Instead, it has reinforced how far we still have to go.
New NPS can embed infrastructure in future planning
Infrastructure New Zealand warmly welcomed the government’s recent announcement of a proposed National Policy Statement (NPS) for Infrastructure under the Resource Management Act as a step towards a more coherent national planning system. We also see this as positive for local councils, which, until now, have struggled under the dual expectation of having to design and implement their own planning frameworks.
For decades, infrastructure has been undervalued in New Zealand’s planning system – treated as secondary to other considerations. This has resulted in fragmented decision‑making, costly delays and, at times, poor outcomes for communities.
The proposed NPS would, for the first time, embed infrastructure as a central consideration in environmental and land-use decision-making. It provides much-needed national consistency, enabling councils to better integrate infrastructure into their planning processes, and giving infrastructure providers greater clarity and confidence.
New Zealand is not doing anything new here. We are merely aligning our planning system with established international best practice. The United Kingdom, Singapore, Australia and the European Union all apply forms of national direction to how they consider infrastructure. Until now, we have been the outlier.
Infrastructure New Zealand also supports the introduction of a new NPS for Natural Hazards. In the face of a changing climate, it is critical that risk identification, assessment and information collection are approached in a consistent manner. Currently, councils operate under divergent standards and are often hamstrung by having limited data. A nationally consistent approach will help councils to make investments decisions with greater confidence when it comes to resilience.
This more prescriptive central government direction in infrastructure and natural hazards planning signals a shift towards greater national leadership in support of local delivery, and more accurately reflects the needs of Aotearoa New Zealand in the 21st century.