- Hon Chris Bishop
The Government has released its second Quarterly Investment Report (QIR) which shows substantial work still to be done by agencies to improve investment reporting and meet the Government's expectations, Infrastructure and Acting Finance Minister Chris Bishop says.
"New Zealand has significant infrastructure and investment needs. The Government is determined to get the foundations of our infrastructure system right, to drive improved value for money, a more consistent pipeline of investments, and deliver on-time and on-budget projects," Mr Bishop says.
"The Investment Management System (IMS) and the Quarterly Investment Reporting (QIR) are key mechanisms for Cabinet to hold agencies to account for investment performance, and to pre-emptively intervene to ensure projects are on track to deliver.
"In August we published the first Quarterly Investment Report for the first three months of the year. This latest QIR is for the period April to June 2024.
"The latest QIR shows that there is significant investment activity across the pipeline, with 198 investments in various stages of delivery with a combined budget of around $85.7 billion, and a further 176 investments worth an estimated $79.4 billion being planned. Of these investments in delivery, agencies are reporting $2.1 billion worth of cost pressures, and almost half of the delivery portfolio is experiencing delays.
"However, there remain significant issues with the quality and completeness of data reported. We expect agencies to meet Cabinet's reporting expectations. Good data is critical for robust decision-making.
"We also expect agencies to lift their game in terms of long-term planning to enable proper sequencing of investment decisions and effective prioritisation, particularly in light of market capacity and the constrained fiscal environment.
"The work we are doing on the Kāinga Ora turnaround plan, the development of a Defence Capability Plan, changes to school property, and the Health Infrastructure Plan are crucial. It is clear that a lot of further work is required."
"The June '24 QIR also includes annual reporting on agency investment intentions, benefits realisation, and Chief Executive attestations. A clear theme is that asset management is a key area needing improved performance. There are large gaps in our understanding of the state of the Crown's assets, as well as a lack of comprehensive planning to maintain, renew, replace or dispose of assets.
"The Infrastructure Commission's latest report, "Taking care of tomorrow today: Asset management state of play" also highlighted this as a real issue. Ministers are considering the recommendations in that report. We are determined to do better.
"On delivery, the QIR found that 83 per cent of investments are currently tracking to agreed delivery budgets, although there are cost escalations across the portfolio of around $2.1 billion - mainly from local road recovery after the North Island Weather Events, Defence Estate Regeneration projects, and Ministry of Education Cyber Security projects. Treasury is analysing whether agencies are accurately estimating costs in planning through to delivery.
"Worryingly, only 54 per cent of investments are reported as tracking to original timeframes. 58 investments with a combined delivery budget of $3.2 billion are looking at delays of 20 per cent or greater over the original timeframe
"The latest QIR also includes a list of the investments in the Government portfolio that are of a significantly high value or carry significant levels of risk. The five investments are:
- New Dunedin Hospital (Health NZ)
- Our Place in Antarctica (MFAT)
- Te Pae Tawhiti (MSD)
- Public Safety Network- Next Generation Critical Communications (NGCC) Programme (Police)
- SH1 Additional Waitemata Harbour Connections (WHC) (NZTA)
"We will continue publishing these reports quarterly to provide the public with much better visibility of the government's investment portfolio, to improve investment discipline, and drive better performance from agencies."
The next Quarterly Investment Report covering the July to September 2024 quarter will be released early in 2025.
Note to Editors:
- Link to the June 2024 Quarterly Investment Report
- Quarterly Investment Reports are published to ensure that the status of investments is open and transparent. They are developed based on investment information that government agencies submit to the Treasury following the end of a quarter.
- Agencies are responsible for the accuracy and completeness of investment information they submit to the Treasury. The Treasury does not edit or update agency information, save for correcting minor data formatting issues. The Treasury has previously published these reports as part of the respective year's Budget Proactive Release but will now do so on a quarterly basis.
- Previous Quarterly Investment Reports can be accessed through The Treasury's website.
