Government could co-invest in gas projects, says Shane Jones
Thursday, 13 March 2025
Regional Development Minister Shane Jones said the Government should look at co-investing with foreign companies in developing natural gas projects.
At the Infrastructure Investment Summit in Auckland this morning Jones spoke of New Zealand’s need to find ways to ensure the security of its gas supply, or risk every prospect of the “crippling of our economy”.
“I was frightened by what we went through last winter,” Jones said, referencing electricity price rises that led some manufacturers to close.
Jones said he had asked officials to look into a possible regime under which the New Zealand government would be a co-investor in gas extraction projects as a means of de-risking them.
Concerns have been raised that international investors were put off investing in some sectors in New Zealand for fear future governments would pull the plug on the projects.
He said New Zealand First had no ideological concerns over using the Crown’s balance sheet for such purposes.
“What New Zealand doesn’t need is a new winter of discontent when New Zealand has the highest energy prices in the world,” he said.
It would be a nationally significant asset as the only dry dock in the country large enough to service Royal Navy ships and commercial vessels like Cook Strait Ferries, he said.
Earlier in the day, Prime Minister Christopher Luxon opened the summit, declaring that “New Zealand can’t do it alone” and that growth will require “breaking perceptions about the New Zealand economy.”
At the summit, the Government is laying out its plans to close New Zealand’s multi-billion dollar infrastructure deficit to dozens of international infrastructure development companies.
Jones’ suggestion came among some concrete announcements from Government ministers including Finance Minister Nicola Willis, and Infrastructure Minister Chris Bishop.
Jones announced the opening of a tender process for investors in a dry dock and surrounding marine maintenance facilities at Northland’s Marsden Point.
It would be a nationally significant asset as the only dry dock in the country large enough to service Royal Navy ships and commercial vessels like Cook Strait Ferries, he said.
Finance Minister Nicola Willis announced there would be money for a public private partnership (PPP) infrastructure development scheme in the next Budget.
However, she would not confirm it would be the Northern Expressway, saying: “I like to keep a few surprises for my budget.”
Willis also said it was her hope that there would be money for a new PPP in each Budget she delivered.
Ministers outlined a future in which “user pays” models, such as toll roads, would feature heavily.
Bishop said in the first instance, New Zealand would seek user or beneficiary pays to fund new infrastructure projects rather than defaulting to taxpayer money.
Trying to fund infrastructure using taxpayer money had failed the country, and would lead to a growing infrastructure deficit, he said.
“By 2050, If we keep doing things how we are now, New Zealand is expected to have an infrastructure deficit of around $210 billion,” he said.
“I expect proposals from sectors such as transport, water, energy, housing, and adaptation to demonstrate how user or beneficiary pays can contribute towards funding requirements. Greater utilisation of user-pays will provide greater opportunities for the private sector to participate in Crown’s investments.”
“Over the next two days, you will hear more about our plan to unleash growth and ensure New Zealand reaches its full potential,” he said in a speech to a crowd of about 170 investors, builders, lawyers and politicians at Auckland’s Park Hyatt Hotel.
“We want you to join us on that journey, and we will have several opportunities on display.
“That will include the opportunity to deliver infrastructure in partnership with the Crown – both in the form of immediate opportunities and the pipeline of projects going forward.”
Luxon used the speech to reiterate the Government’s reform programme across energy, resource management, and foreign investment.
While very familiar to a New Zealand audience - and to the room of nearly 50% New Zealand based firms - Luxon made the pitch for the Government plans and positioned New Zealand as a stable investment partner in a sea of global instability.
“New Zealand has been and will continue to be a poster child for social and political stability in a more volatile and challenging world.
“That reputation is long-standing, but in challenging times, it has come into sharper focus.
“We consistently advocate for a rules-based international order that allows small countries like New Zealand to thrive. Free trade isn’t just an idea in New Zealand; it’s the bedrock of our prosperity,” he said.
He also pitched the Coalition Government as being willing and ready to partner with businesses both on and offshore.
The summit comes at a time when there’s a growing recognition of New Zealand’s constrained ability to pay for the infrastructure it needs.
The bankers who spoke to KPMG’s John Kensington prior to the publication of its survey of banks on Wednesday were in no doubt of the need to find investors from overseas to invest in building infrastructure here.
Kensington reported they told him: “The infrastructure within New Zealand is in urgent need of upgrading and modernisation, and the level of investment required, far beyond what we can fund locally from our own wealth.
“As such, New Zealand needs to be an attractive place for other parties to bring their capital. It needs to utilise that capital effectively and be seen as a progressive and welcoming place to do business.”
They were, however, concerned about flip-flopping bi-partisan politics which risked incoming governments reversing the policies of their successors.
“Many expressed a real fear that fringe elements in coalition Governments together with chopping and changing regulation runs a real risk of New Zealand going nowhere and none of these not significant problems being solved,” Kensington said.
“If we want our country to thrive, we need to work even harder to compete on the world stage – and, in particular, to unlock the commercial partnerships that will supercharge the next generation of growth in the New Zealand economy.
“That means the Government will work more with Industry to deliver much of the infrastructure and projects that will be showcased over the next two days.”
The day will feature a number of sessions with ministers spruiking the Government’s policy programme as well as opportunities or areas for investment.
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Infrastructure minister Chris Bishop told the audience, in the first instance, New Zealand would seek user or beneficiary pays to fund new infrastructure projects rather than defaulting to taxpayer money. Trying to fund infrastructure using taxpayer money had failed the country, and would lead to a growing infrastructure deficit, he said. “I expect proposals from sectors such as transport, water, energy, housing, and adaptation to demonstrate how user or beneficiary pays can contribute towards funding requirements. Greater utilisation of user-pays will provide greater opportunities for the private sector to participate in Crown’s investments.”
Finance Minister Nicola Willis spoke of her concerns that New Zealand be a place that young people decide to remain in. “I’m a mother of four children aged 9, 12, 13 and 15. In a world of abundant choices I want them, and all young Kiwis, to see this as a country of aspiration, a place they will choose to make their home,” she told delegates to the Government’s infrastructure summit. Figures from Stats NZ show she is right to be concerned. In 2024, 128,700 people decided to leave the country, which was a record number. That included a net 47,100 New Zealand citizens deciding to leave.
Prime Minister Christopher Luxon sees the centre of world economic power moving to New Zealand’s doorstep. “We’re living in an age when New Zealand has never been closer to the action - right in the middle of the booming Indo-Pacific with direct connections to Asia and North America,” Luxon told delegates to the Auckland infrastructure summit.
“With the weight of global economic activity shifting from the Atlantic to the Pacific and digital connections breaking down barriers, New Zealand has never been closer to the world.”
The shift in ocean trade has been marked as Asia has risen in the global economic order, according to authors of a paper in 2022 entitled Port Economics, Management and Policy.
“As the international trade taking place over the Pacific Ocean increased, the Atlantic Ocean experienced a relative decline in its share. While the Atlantic accounted for 49% of global trade activity in 1980, this share decreased by more than half to 20% in 2020. The share of the Indian Ocean doubled to 12%.”
German multinational financial services company Allianz SE says the world’s economic centre of gravity has shifted eastwards.
“By 2030, we forecast the world’s economic centre of gravity could be located around the confluence of China, India and Pakistan. In comparison, it was located in the Atlantic Ocean until 2007.”