Finance Freedom: Rediscovering how New Zealand built itself

New Zealand spends more on infrastructure than almost any developed country, yet still cannot build the pipes and roads new housing needs. Why? Oliver Hartwich and Benno Blaschke trace an idea the Initiative has followed for over a decade. It began in 2013 with a proposal drawn from how other countries fund the infrastructure needed to connect new suburbs to cities: let the people who move in pay for it, rather than loading the upfront cost onto existing ratepayers. At the time it seemed radical. Then the Initiative discovered New Zealand had done exactly this for most of the twentieth century. Communities could raise their own debt and build what they needed, without asking central government for money or permission, and funded more than half the country's local infrastructure that way, before the system was dismantled in the 1990s. The Infrastructure Funding and Financing Act 2020 began rebuilding it, but the government still sits at the centre, and six years on only three projects have used it. Benno sets out a ten to fifteen year pathway to developing institutions robust enough that communities can choose to fund their own growth, carry the risk themselves, and build without waiting on councils or central government for permission. When communities can stand on their own feet, the government can step back. The result would take the burden off ratepayers and taxpayers, and give a more responsive planning system the infrastructure it needs to make housing affordable.

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