National Infrastructure Plan: Hospital spending should double
Tuesday, 17 February 2026
The Infrastructure Commission is recommending the Government double its spending in health infrastructure across the next three decades to meet the needs of an ageing population and replace old hospitals.
The commission, which has the job of creating a multi-decade bipartisan plan, released a report on Tuesday, calling for the Government to invest 0.4% GDP across the next 30 years, doubling the average investment of 0.2% between 2010 to 2022.
New Zealand is lagging behind comparable countries when it came to investment in hospitals, medical equipment and hospital beds, investing 25% less than Australia, Denmark, Iceland, Norway, Sweden and the United Kingdom.
Meanwhile, waiting times for elective surgeries are higher, as well as the average age of hospitals compared with the UK.
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The plan proposed more than $20 billion in investments for the health sector across the next decade.
The recommendations mirror warnings from Treasury Secretary Iain Rennie, who told 1News New Zealand's hospitals need major investment within the next decade and the Government should be prepared to borrow more to fund it.
The report said the country’s deteriorating quality of health assets was likely to be a result of low levels of investment in the 1990s and since the mid-2010s, and had created a backlog of renewals and maintenance.
In a nationally representative survey undertaken by the commission, 65% of surveyed New Zealanders reported hospital services somewhat or consistently failed to meet their needs.
The report showed New Zealand is falling short on both the scale and standard of its health infrastructure - 10% behind equivalent nations in quantity and 13% behind in quality.
While hospital building were mostly in average to good condition, the report noted sitewide infrastructure was in poorer condition than other countries.
Wider changes would likely be needed to slow demand, including concentrating services to fewer hospitals, shifting services into the community, better integrating primary and secondary care to minimise hospital stay times and treat health needs earlier, and greater investment in prevention and population health services.
Investment in hospital infrastructure as a share of GDP peaked between 1960 and 1980, likely in response to population growth.
Over time expenditure shifted towards improving existing facilitates likely in response to medical innovations and higher community expectations, the report stated.
New Zealand ranked fourth to last in the OECD at asset management overall, with leaky hospitals, mouldy army barracks and deferred maintenance across the public sector symptoms of a wider system failure, it said.
To address this, it recommended government agencies to plan how to maintain existing assets and invest in new ones based on funding and demand.
Every region is expected to have growing demand in hospitals, with regions such as Nelson and Tasman driven by an ageing population while Auckland, the Waikato, and Canterbury also needed health facilities for a general growing population.
Hospitals and other health services are also seen as crucial in addressing health inequities between Māori and non-Māori, with Māori facing higher rates of chronic disease, injury and lower life expectancy.
Health Minister Simeon Brown said there was a real need to invest in health infrastructure, with $7.5b invested in projects underway or in the pipeline.
Dunedin Hospital was now under construction, while major upgrades to Palmerston North Hospital, Hawkes Bay Hospital and Tauranga Hospital was in the planning stages.
The Government borrowed $1b to invest into Nelson Hospital, Wellington Hospital and rapid wards, where 130 hospital beds were being delivered this year, he said.
“The focus I have is not only on making sure we have a clear plan, but actually making sure our health New Zealand delivers the infrastructure that New Zealanders desperately need.”