Budget 2025 Commits $6.8B to Transform New Zealand Infrastructure

In a bold step toward revitalising New Zealand’s infrastructure landscape, the Government has announced major capital investments in Budget 2025, focusing on healthcare, education, mental health, transport, and defence. Infrastructure Minister Chris Bishop unveiled the expansive infrastructure agenda, which is set to accelerate economic growth, uplift community standards, and address longstanding deficits in public facilities.

Budget 2025 Capital Spend Reaches $6.8 Billion

The total capital expenditure outlined in Budget 2025 stands at an impressive $6.8 billion. With a capital allowance of $4 billion—slightly above the previously projected $3.6 billion—the Government aims to ensure consistent and strategic funding across critical infrastructure projects. According to Minister Bishop, these investments are designed to “grow our economy, create opportunities, and raise living standards for Kiwi families.”

The investments build on the existing pipeline of projects and draw on priorities highlighted at the 2025 Infrastructure Investment Summit. This marks a strategic continuation of New Zealand’s long-term infrastructure goals, coordinated through the New Zealand Infrastructure Commission.

Key Investment Areas

Healthcare Modernisation – $1 Billion A central highlight of Budget 2025 is the $1 billion allocated to modernising hospitals across the country. This includes the redevelopment of Nelson Hospital and a major refurbishment of the Emergency Department at Wellington Regional Hospital. These initiatives reflect the Government’s commitment to delivering high-quality, modern healthcare services to all New Zealanders.

Education Infrastructure – $712 Million Capital and $234 Million Operating The education sector receives a substantial boost with funding for new classrooms and essential school property maintenance. Approximately 10,000 new student places will be created, aiming to reduce overcrowding and modernise learning environments across the country.

Mental Health Facility Upgrades – $50 Million Mental health infrastructure is also receiving attention with a $50 million investment aimed at improving therapeutic environments and ensuring safer care settings. These upgrades are vital for enhancing mental health outcomes and supporting vulnerable populations.

Rail and Transport Enhancements – $464 Million Capital and $141 Million Operating To improve the reliability of commuter and freight services, especially in Auckland and Wellington, the Government is committing $464 million in capital and $141 million in operational funding to rail maintenance. The funding will be used to replace outdated bridges, culverts, and other rail assets, ensuring the efficiency of supply chains and public transport systems.

Corrections Infrastructure – Christchurch Men’s Prison Expansion A total of 240 high-security beds, along with a new Health Centre and Intervention and Support Unit (52 beds), will be developed at Christchurch Men’s Prison. Phase 1 of this redevelopment will be delivered through a public-private partnership (PPP), designed, built, financed, and maintained over 25 years. The Department of Corrections will maintain operational and custodial responsibilities.

Defence Sector Support – $167 Million Capital and $43.7 Million Operating The Defence Force will benefit from $167 million in capital expenditure and $43.7 million in operational funding, supplementing the previously announced $2 billion-plus to replace New Zealand’s ageing maritime helicopter fleet. These upgrades will bolster national security capabilities and modernise defence infrastructure.

Road Recovery Works – $219 Million To address the lingering impact of the 2023 North Island weather events, the Government has earmarked $219 million in operating funding for recovery and repair of local roads. This aims to enhance resilience in the transport network and restore mobility to affected regions.

A Robust Infrastructure Pipeline

Minister Bishop also highlighted that approximately $46.7 billion worth of infrastructure projects are currently under construction, with a further $13.6 billion in procurement or expected to be tendered within the next 12 months. These projects span both public and private sectors and are tracked through the Infrastructure Commission’s capital pipeline database.

A 30-Year Vision and New Tools

The Government is taking a long-term view through the development of a 30-Year National Infrastructure Plan. This initiative is coupled with a legislative overhaul—replacing the Resource Management Act (RMA)—to reduce regulatory burdens and streamline project approvals.

In addition to PPPs, the Government is also introducing new funding mechanisms, including tolling and value capture models, to finance high-quality infrastructure with fiscal sustainability. These tools are designed to ensure projects are not only delivered efficiently but also backed by dependable financial structures.

A Turning Point for New Zealand’s Infrastructure

With Budget 2025, the coalition Government has signalled a robust commitment to rectifying New Zealand’s “massive infrastructure deficit” and preparing the nation for future growth. Minister Bishop underscored that this year’s budget ensures “plenty of room” in the fiscal plan for emerging infrastructure needs.

“This is not just about concrete and steel,” Bishop concluded, “it’s about improving lives, strengthening communities, and ensuring that New Zealand is ready for the challenges and opportunities of the future.”