Just coming back to that New Zealand diagram, we’ve looked at that right at the start of the talk during the big recession that “Last one out turn off the lights” recession back in the late 1980s, we had the situation where our consumption of fixed capital infrastructure was higher than our expenditure.
You could see the big dip off in terms in that diagram at the start of that period and we caught up again about 1995, 1996, which coincidentally was when infrastructure asset management was introduced by law into New Zealand, right at the end of that recession and the effects of it.
And you can see from there that we recovered and our capital expenditure was well ahead of consumption.
And in the 2007 recession, while it has led to a drop, nowhere near getting close to the consumption of infrastructure level. And that’s around sustained investment and the intermediary period and around good asset management.
The other thing in the report, the same report that has come out – called Water and Roads in November 2014 by the New Zealand Office of the Auditor General was Infrastructure Waves.
New Zealand has had pretty constant highway or transportation expenditure over the period from about 1955, had some big waves of utility building 1950s through to mid-1970s, and then now you can see that big tip-off of the recession in 1987 and then be taking off again, and that’s all been treatment upgrades, pretty much and some pipe utility but mainly treatment upgrades from about 1995 onwards.
Now the interesting thing from New Zealand’s point of view is a lot of 1960s pipe is going to come up for replacement or renewal about at the same time as the treatment upgrades are – let’s say about 2030- 2040.
We’ve got a lot of work to do between now and then to work out – where and how, and to optimize expenditure, and get it to a point where it’s affordable for our society. That’s going to keep us busy.
PHOTO CREDIT: Bernard Spragg.NZ via Flickr Creative Commons License