New Zealand faces an estimated $210 billion infrastructure deficit, driven by congested roads, ageing water systems, and inadequate healthcare facilities. Yet, the country also owns an extensive portfolio of public assets.
On paper, New Zealand is asset-rich, with holdings that include hospitals, roads, schools, and various other government-owned enterprises. However, many of these assets are underperforming and not delivering optimal value to taxpayers. This “hodgepodge” of government-owned businesses is the result of decades of shifting policies.
The NZ Initiative cites TVNZ as a prime example. Once valued at NZ$1 billion, the state-owned broadcaster’s worth has plummeted to just NZ$208 million. Had it been sold a decade ago, the government could have reinvested the proceeds in higher-priority projects.
Prime Minister Christopher Luxon has recently signaled openness to asset recycling as a means to fund essential infrastructure without saddling future generations with unsustainable debt.
What is Asset Recycling?
Asset Recycling is essentially the sale of assets to enable investment in other assets. It aims to release cash “tied up” in assets that are not aligned with government strategies, performing poorly, or where the government has over-invested.
Lessons from New South Wales
New South Wales offers a clear example of how recycling assets can benefit the public. Since 2012, selling unnecessary government assets and investing the proceeds in essential infrastructure has generated A$53 billion.
The implementation of asset recycling has led to positive outcomes, such as:
- The Sydney Metro Northwest rail line has reduced commuters’ travel times by an average of 60 minutes per day.
- The WestConnex motorways have cut journey times by up to 40 minutes. – Hospitals in Blacktown, Northern Beaches, and Westmead now provide world-class healthcare.
- Regional communities have received upgraded water infrastructure.
- Schools across the state have gained modern facilities.
The New South Wales (NSW) state government ensures the effectiveness of asset recycling and builds public trust, especially among skeptics, by ringfencing the proceeds from asset sales.
This means the funds are protected from being diverted into general government spending. Additionally, all projects undergo a strict cost-benefit analysis before any investments are made.
The Situation in New Zealand
While New Zealand already practices asset recycling at both local and central government levels, such as selling underutilized land to fund new assets, these transactions often lack a cohesive and transparent approach, especially regarding the reinvestment of funds. Sometimes, the proceeds are held in accounts that are used for various purposes, including those unrelated to infrastructure.
A report from Infrastructure New Zealand, published in November 2024, examines the concept of asset recycling and the potential for partnering with the private sector to leverage existing public assets. This approach aims to “recycle” funds back into the system to support the development of vital infrastructure that New Zealand needs.
The report highlights past examples of asset recycling, such as the sale of a minority share in Napier Port on the NZX, which financed the construction of a new wharf in 2019.
It also discusses Australia’s Restart NSW fund, which finances high-priority infrastructure projects, and a partnership between Christchurch City Council and Ngāi Tahu, which transformed an old NZ Post building into what is now the Christchurch Civic Building.
Additionally, the report shares lessons learned from local experiences and international practices in asset recycling and provides recommendations for effective implementation, including guidance on national policy direction.
Unlocking Value for the Future
Asset recycling could play a crucial role in addressing New Zealand’s infrastructure funding and financing challenges. Government-owned assets and shareholdings represent opportunities that are often overlooked.
With increasing pressure on public debt and a high-cost infrastructure delivery pipeline, the country can explore its balance sheets for underutilized or underperforming assets that can be leveraged to unlock their full value.
Source:
Patridge, R. (2025, April 19). NZ’s Infrastructure Crisis: Unlocking Crown Assets for Renewal. The New Zealand Initiative. Retrieved from https://www.nzinitiative.org.nz/reports-and-media/opinion/nzs-infrastructure-crisis-unlocking-crown-assets-for-renewal/
Unlocking Value: Recycling Our Infrastructure Assets To Grow New Zealand. (2025, November 5). Aurecon. Retrieved from https://infrastructure.org.nz/wp-content/uploads/2024/11/21157-Infrastructure-NZ-Unlocking-Value-Report_DIGITAL.pdf
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