Most of us would agree that New Zealand is experiencing many crises, especially in housing, health, education and infrastructure.

Here, I want to consider the infrastructure crisis, or maybe, more precisely, the public infrastructure crisis.

By public infrastructure I am talking about the things we all use such as roads, bridges, energy, healthcare and water services.

The NZ Infrastructure Commission has been increasingly vocal about what it refers to as an infrastructure deficit or gap where demand for infrastructure outstrips supply.

That imbalance is made worse if we allow the population to grow at a rate that exceeds our capacity to build infrastructure. That imbalance has been happening for some time and is worsening.

From about 2014, New Zealand’s population has been growing at about 2 percent a year, which is double the 1 percent annual growth prior to that period.

The growth in population of recent decades has been driven mostly by net migration. If the population grows at 2 percent a year, the time for population to double is 35 years, whereas if it grows at 1 percent, it is 70 years.

If the population is doubling every 35 years, it stands to reason that we also have to double infrastructure in that time. We obviously haven’t been able to do that, or we wouldn’t have a deficit.

Lately, I’ve been asking myself, when did the infrastructure deficit start, and why? So, I did what we all do nowadays and consulted an AI application. I used DeepSeek, which works well and is open source. And yes, I know AI results require a discerning eye.

I typed in “‘When did New Zea-land’s infrastructure deficit start?”. This is the output I got: See graph below:

DeepSeek goes into detail as to the when and why of the infrastructure deficit development, and I would say its answers are generally on the money.

Folk can try it for themselves and read the entire DeepSeek output.

For now, let me assert that the deficit grew in the 1980s or about the time of the neoliberal economic reforms. It was a time when we placed our unwavering faith in “the market” and privatisation. How misplaced that was is demonstrated starkly by the failure of our electricity market, which has generated prices that make some of our energy-hungry industries uncompetitive.

Some time ago, I investigated how the number of Local Authorities (LA) we had in the country had varied since 1900 and found that we, at one time, had as many as 757 LAs in New Zealand (borough and county councils, harbour boards, domain boards, catchment boards etc.). As shown in the figures, in the 1970s the number of LAs started to initially reduce slowly, and then more dramatically in 1989.

I do not consider it a coincidence that the shrinking of local government and loss of ability to build infrastructure occurred at the same time as the neoliberal reforms.

The Government seems hell-bent on fixing the infrastructure crisis through the application of more of the policies that caused the problem in the first place, ie,. more privatisation of public assets. Bam! Déjà vu. As I have alluded to, this is something that we have already tried in the mid-to-late 80s.

For those of us old enough to remember, the late 1980s was the era of deep neoliberal economic reforms introduced by the David Lange Labour Government known as “Rogernomics”, after the finance minister, Roger Douglas, who said: “Once the programme (of neoliberal reforms) begins to be implemented, don’t stop until you have completed it.

“The fire of opponents is much less accurate if they have to shoot at a moving target.”

And so it was that the great majority of New Zealanders got Rogered.

Although we gave the neoliberal reforms a Kiwi name, the reforms were nothing more than a copy of the economic policies of the Thatcher and Reagan eras. These ideologies and policies were likely driven by their neoliberal economic advisers, since neither Thatcher nor Reagan were economists.

Neoliberal economic ideology became the mainstream. The view that Government should be small and play a subordinate role in the economy became entrenched. The market will take care of everything. Never mind that the evidence for this view was weak.

In the late 1980s, the privatisation agenda moved into high gear. Central Government amalgamated local government and brainwashed us into believing that too much local government was no good.

We were told amalgamation would give scale and efficiencies. Hey, presto, we got public infrastructure and other crises. We are being told the same today about water services and health care. And, of course, our housing market is one of the most inflated in the world.

The Air NZ debacle provides a classic example of how privatisation is not better. Our leaders first privatised Air NZ in 1989 and sold what was a public asset (one we all paid for) to a consortium of private interests including Brierley Investments (65 percent), a New Zealand-based corporate investor), Qantas (19.9 percent), American Airlines (7.5 percent), and Japan Airlines (7.5 percent). Corporate raider Ron Brierley of course went belly up. Well done, New Zealand government.

In 2001, after the near collapse of Air NZ, the government (on behalf of the people) had to step in and buy back 82 percent of the entity. The Government has since gradually reduced its stake to 51 percent. What a balls-up.

That begs the question, if private is so great, then why did we, the people, have to buy the airline back? The answer is obvious.

Privatisation didn’t work for the airline industry, did it? Or for rail, for that matter. And it won’t work in health either, which seems to be heading in the same direction, driven by the same failed ideology that holds that private is always better and more efficient than the public sector.

The methodology here is also obvious. Run down the public system and starve it of money, then claim that public doesn’t work and then claim that private will rescue the situation.

Incidentally, when I asked the Ministry of Health many years ago for evidence that private was more economically efficient and better for patient outcomes, they couldn’t provide any. Decisions made without evidence.

A few years ago, the morally courageous Nobel Prize-winning economist, Joseph Stiglitz, pronounced neoliberalism dead and emphasised the importance of the role of government in providing public infrastructure. And yet, here we are continuing to beat the same drum that private is better.

I should point out that our current health minister, Simeon Brown, was born only in 1991. He has never known a New Zealand without crises although I doubt, he would feel them in his bubble.

From his vantage point, I can understand how he would believe that private is better, and that the invisible hand of the free market is a cure-all.

But this was not how Japan rose to become the second largest economy in the world after World War II or how China has ascended to become the biggest economy measured in terms of purchasing power in parity terms.

In those countries, it was the firm hand of the Government acting on behalf of all the people, rather than the invisible hand of the market that vanquished or greatly reduced poverty and brought general prosperity.

Neoliberal ideology prioritises private profit over the public interest. Risks are socialised and profit is privatised. The Public-Private Partnerships that this government is fond of promoting as one solution are a classic example.

Consider the Transmission Gully fiasco. The private component of the partnership wants to reduce risk that has to be borne by the public component.

When it comes to water services, the pressure to form multi-council CCOs (Council Controlled Organisatons) coming from Government is clear. Multi-council CCOs are claimed to be better than a stand-alone water unit within councils.

Arguments include the efficiencies of scale and that CCOs will be run by professional boards. A professional board doesn’t guarantee anything. Brierley Investments was run by a professional board, and so was Equity Corp and many other public companies that have gone belly up and evaporated from the NZ Stock Exchange.

In relation to Local Water Done Well, we have to put some faith in the reform’s economic regulation by the Commerce Commission, establishment of the Water Services Commissioner and mandatory disclosure of performance.

Folk have until 5pm on Sunday to have their say on the future of Whakatāne District Council’s water services. Find information about the future delivery model for water services and how to submit on the website.

Whether we go stand-alone or multi-council CCO, there are pros and cons. A stand-alone setup gives us more autonomy but at slightly greater cost compared to a multi-CCO model.

One thing is for sure, however, and that is that costs to water users will increase to bridge the infrastructure gap that has been allowed to develop.

What we need to do is work smarter and think outside the box, so we can keep costs to ratepayers down. That is why I set up an entity called the Mayor’s Taskforce for Water.

The group comprises highly trained engineers from our community who are generously giving up their precious time and putting their heads together with council staff to find creative solutions to achieve bang for the buck.

I suspect that a multi-CCO model will only be as effective as the councils that we partner with, which comes down to people working together for mutual benefit.

We didn’t always have an infrastructure deficit. I think that even when this country had half the population it has today, we were quite good at developing public infrastructure. Maybe we need to take some lessons from our past.

Or we could simply pretend that everything is great. As Supertramp put it “Crisis, what crisis?”