Learn » Blog » How KiwiSaver could fund essential NZ infrastructure

How KiwiSaver could fund essential NZ infrastructure

Published on 27/03/2023

Topics: 

kiwisaver

media

Infrastructure blog

Cyclone Gabrielle is another stark reminder of just how short New Zealand is of critical infrastructure. The Infrastructure Commission calculates that 8.9% of GDP is required to be invested in infrastructure each year, for the next 30 years. That’s $33 billion a year, before inflation. Our current spend is well below that.

But there is a silver lining.

Fortunately, at the same time as we need huge amounts spent on infrastructure, the pool of long-term KiwiSaver savings is growing rapidly. Already over $86b, the Treasury predicts KiwiSaver could grow to $200b by 2030 and $400b by 2050. Yet over 60% of KiwiSaver savings is invested overseas, with the amount going offshore growing daily. Why? Because of a lack of local investment opportunities.

So why is there so much money around yet little invested in our infrastructure?

In Sam Stubbs' latest opinion piece for Stuff, he discusses the significant opportunity to develop a large, listed Kiwi Infrastructure Fund - which could provide KiwiSaver investors the means to fund quality, long-term projects that can also generate stable returns. It's very likely to be good for NZ's economic growth, too (we love a good win-win).

You can read more via the Stuff article here.

 

--

This information provided and opinions expressed in this post are intended for general guidance only and not personalised to you. These materials do not take into account your particular financial situation or goals, and are not financial advice or a recommendation. This post is not intended to convey any guarantees as to the future performance of any investment products, asset classes, or capital markets mentioned. Past performance is no guarantee of future performance. Information is current at the time of posting, and subject to change without notice. Simplicity NZ Ltd is the issuer of the Simplicity KiwiSaver Scheme and Investment Funds. For Product Disclosure Statements please visit our website simplicity.kiwi.