The 2024 Budget and progressing City and Regional Deals

Establishing City and Regional deals is essential for achieving growth for all New Zealanders.

The 2024 Budget provided a significant step towards achieving a national pipeline of infrastructure initiatives. Two main factors that enable this pipeline are City and Regional deals (“Deals”) and a 30-year National Infrastructure Plan. There is not much information on these yet, but the Department of Internal Affairs are working on a delivery framework and the Infrastructure Commission are in the process of establishing a National Infrastructure Plan.

This Government is rightfully concerned with economic growth, job creation and increasing productivity. These will be critical outcomes for shaping up the Deals. We believe that Deals will likely consist of enablers for affordable housing, transport, water and social infrastructure that directly delivers measurable outcomes for communities throughout New Zealand.

Leadership for these Deals will be devolved from the centre to local or regional groups who will be required to collaborate with iwi stakeholders, local authorities, private sector, and not-profit organisations, (e.g. community housing providers). Given our size, we suspect the preference will be for regional deals over city deals, because there are 16 regions compared to 78 local bodies ranging from city and district councils to unitary authorities and regional councils.

Central government seed funding for the inception of a Deal will accelerate engagement as Government will be assured of the appropriate level of resourcing. Obviously, this funding will be timebound and have specific deliverables which we expect will be outlined in the DIA framework for delivering Deals. Without a targeted mechanism, there is a substantial risk that a Deal is limited to solely a public sector conversation between central and local government and valuable Iwi, private sector and not-for-profit sectors and community group inputs are not leveraged or sufficiently considered. Furthermore, several parties will struggle to prioritise and invest an appropriate level of funding given their existing fiscal constraints.

The announcement of the National Infrastructure Agency, to provide the shopfront for private investors and co-ordination and governance of infrastructure funds, and its funding in the Budget is positive. However, there is an expectation that the National Infrastructure Agency and Central Government will need to do more than just provide an interface for regional deals. While local and regional government may be expected to bring together key stakeholders, the initial funding and who will be responsible for oversight remain as open questions looking for an answer.