New Zealand has a small population, a large geographical area and some dynamics that mean that, when it comes to core infrastructure, there’s lots to do. Whether you’re talking roads, hospitals, water, telecommunications or electricity, there are almost innumerable problems to solve.
If we then add to that fact the nature of politics and the short electoral cycle we have, it becomes obvious that simply sitting back and waiting for governments to come up with and execute upon the solutions is probably a sub-optimal strategy.
What we really need is some systems thinking, an approach that looks at the bigger picture, brings together some of the disconnected, siloed and self-interested parts, and drives synergies, efficiencies and a longer-term perspective on our infrastructure deficit.
Across the boards on which I serve, be they in the health sector, the electricity industry, the communications space or three waters, a similar gap, and a similar frustration about an inability to move the needle on the bigger picture exists.
I was sitting in yet another meeting not that long ago, one of those sessions where everyone around the table is earnest, well-meaning and just a little bit tired. The sort of meeting where you can almost predict the outcome before it starts. Lots of nodding, a few good ideas, a sprinkling of jargon and then, ultimately, very little actual progress. It struck me, not for the first time, that we have no shortage of smart people or even good intentions. What we lack is a mechanism to align those people and intentions towards something enduring.
Which is why I’m quite intrigued by what Sam Stubbs, founder of Simplicity, is up to with InfraKiwi. Now Sam has certainly been accused of many things, including a tendency towards wokeness. I suspect he wouldn’t bristle too much at that. If anything, he seems comfortable being characterised as someone practising a form of conscious capitalism. He wants to make money, but he also wants that money to do something useful for society.
And yes, he does have a tendency to lecture. In that, to be fair, he is joined by many, your correspondent included, who have strong opinions and perhaps an overdeveloped sense that those opinions should be shared. But he generally lectures for the right reasons, which probably counts for something.
InfraKiwi, at its core, is an attempt to rethink how we fund and manage infrastructure in this country. Rather than relying solely on government balance sheets or hoping that overseas capital will ride to the rescue, it proposes a model where New Zealanders invest in New Zealand infrastructure for the long term. It sounds almost quaint in its simplicity, which perhaps explains why it feels slightly radical.
The idea is to create large-scale, locally owned infrastructure assets. Think renewable energy projects, transport links, maybe even elements of water infrastructure. These would be funded by KiwiSaver funds and other domestic investors, meaning that ordinary New Zealanders would, indirectly at least, own a slice of the assets that underpin our economy.
There are a few key principles that make the model interesting. The first is the notion of fair but not excessive returns. This isn’t about squeezing every last dollar out of an asset. Instead, it’s about generating steady, reliable returns over decades. In a world where short-term gains often trump long-term value, that feels almost countercultural.
The second is long-term ownership. Infrastructure, by its very nature, is a long game. Roads, power networks and water systems aren’t things you flip after five years for a tidy profit. They require ongoing investment, maintenance and stewardship. By anchoring ownership locally and aligning it with long-term investment horizons like KiwiSaver, InfraKiwi is trying to match the nature of the asset with the expectations of its owners.
Then there’s the idea of a golden share. This is a mechanism that allows a degree of public interest oversight, even if the asset is not directly owned by the government. It’s a way of ensuring that certain decisions, particularly those that might not align with national interests, can be influenced or constrained. It’s not a silver bullet, but it does acknowledge that infrastructure isn’t just another asset class. It has social and strategic dimensions that matter.
Perhaps the most appealing aspect, at least to me, is the emphasis on Kiwi ownership. For a small, relatively isolated country, there’s something compelling about the idea that we should own more of the things that matter. Not in a jingoistic or exclusionary way, but in a pragmatic sense. Keeping ownership local can mean that decisions are made with a better understanding of local needs and priorities, and that the economic benefits are retained within the country.
Of course, none of this is without challenges. Raising sufficient capital domestically is not trivial. Aligning the interests of different investors, regulators and stakeholders is complex. And there’s always the risk that good intentions get diluted as reality bites. I’ve sat in enough of those meetings to know how easily that can happen.
There’s also a broader question about whether models like InfraKiwi can genuinely overcome the structural issues in our system. Short political cycles, fragmented governance and competing interests aren’t going away anytime soon. A clever investment vehicle, no matter how well designed, can only do so much.
But perhaps that’s missing the point. Maybe the value of InfraKiwi isn’t just in the projects it might fund, but in the conversation it forces us to have. It challenges the assumption that the status quo is the only option. It nudges us towards thinking more holistically about infrastructure, ownership and value.
As I think back to that meeting, and the many like it, I can’t help but feel a cautious sense of optimism. Not because I think InfraKiwi will magically solve all our infrastructure woes, but because it represents a different way of approaching the problem. It’s an attempt to join some of those disconnected dots, to bring a bit of systems thinking into a space that desperately needs it.
And if nothing else, it might mean that the next time I find myself in one of those earnest, slightly weary meetings, there’s at least a chance that the conversation will edge a little closer to something resembling real progress. Which, in the grand scheme of things, would be no small achievement.
