The Government is pumping billions into transport and infrastructure in Budget 2025, with a focus on fixing cyclone-damaged roads, improving rail networks, and giving certainty to major capital projects.
Infrastructure and Transport Minister Chris Bishop says the $6.8 billion capital spend in this year’s Budget will help grow the economy, boost productivity and deliver long overdue upgrades across the country.
“Our infrastructure investments will grow our economy, create opportunities and raise living standards for Kiwi families,” he says.
“This Budget builds on our existing pipeline of infrastructure projects, including by providing funding for some of the projects highlighted at this year’s Infrastructure Investment Summit.”
The capital allowance has been set at $4b —higher than the $3.6b previously signalled—backed by identified savings.
Among the biggest transport-related investments is a $464 million capital injection and $141 million in operating funding for rail maintenance, with the aim of lifting service reliability for both commuters and freight in Auckland and Wellington.
The money will also replace ageing bridges, culverts and other critical assets.
“This work ensures goods can get to and from our farms, manufacturers and ports,” Bishop says.
Another $219 million in operating funding will go towards local road recovery in regions battered by Cyclone Gabrielle and the 2023 Auckland floods. The funding is targeted at councils in Hawke’s Bay and Tairāwhiti, who will share the money over a three-year period starting in 2026/27.
“Last year’s Budget invested nearly $1 billion into recovery and resilience projects in regions hit by Cyclone Gabrielle and the Auckland Anniversary weekend floods,” Bishop says.
“The Government remains committed to the communities working to rebuild lives and neighbourhoods.”
The five councils in line to receive support are:
- Central Hawke’s Bay District Council
- Gisborne District Council
- Hastings District Council
- Napier City Council
- Wairoa District Council
“This initiative provides certainty for councils that the Crown has made funding available to complete recovery works that allow them to budget appropriately for 2026/27 onwards,” Bishop says.
“A resilient transport network in the East Coast and Hawke’s Bay regions will help deliver the infrastructure communities need to grow their businesses, get their kids to school, and ensure goods get from A to B efficiently.”
Other major investments in Budget 2025 include:
- $1 billion for hospital upgrades including Nelson Hospital and Wellington Regional Hospital’s Emergency Department
- $712 million capital and $234 million operating for school property and maintenance, delivering around 10,000 new student places
- $50 million for improved mental health facility infrastructure
- $167 million capital and $43.7 million operating for Defence infrastructure upgrades
- Funding to deliver 240 high-security beds and a new health unit at Christchurch Men’s Prison through a public-private partnership
The Government says these investments form part of a wider plan to overhaul the country’s aging infrastructure network and deliver long-term certainty for planners and investors.
“Data from the [Infrastructure Commission’s] pipeline shows that across central government, local government and the private sector there are around $46.7 billion of projects under construction, and over $13.6 billion more of projects which are either in procurement now or are expected to be within the next twelve months,” Bishop says.
He says reforms were underway to speed up delivery, including a new 30-year National Infrastructure Plan, Resource Management Act replacement, and the use of public-private partnerships.
“Budget 2025 builds on the coalition Government’s commitment of fixing New Zealand’s infrastructure system, addressing our massive infrastructure deficit, and ensuring we have high quality infrastructure for New Zealanders now and for years to come,” he adds.
Prime Minister Christopher Luxon says the Government’s wider economic strategy was supporting this investment while keeping inflation and interest rates in check.
“The Government’s economic plan is working. By stopping wasteful spending, inflation is down from 7.3% to 2.5% and mortgage interest rates are falling.
“But we cannot take an economic recovery for granted. It requires careful management. That’s why Budget 2025 is firmly focused on growing the economy to help Kiwis get ahead,” Luxon says.
He pointed to initiatives such as a new “Investment Boost” for tradies and small businesses, infrastructure spending, and targeted cost-of-living relief as key pillars of the plan.
“This is a responsible Budget that secures New Zealand’s future,” he adds.
