Taxpayer dollars made more efficient through private sector partnerships.
The New Zealand Government has introduced strategic leasing guidance to agencies, aiming to optimize the use of taxpayer funds by partnering with the private sector for infrastructure projects. According to Infrastructure Under-Secretary Simon Court, this approach offers a flexible alternative to traditional government ownership.
Strategic leasing involves exclusive leases from asset owners in exchange for regular payments. The new guidance will enable agencies to tailor leasing arrangements for various assets, including technical buildings and accommodation after natural disasters. This approach recognizes that the Government doesn't need to own every asset it uses, providing a balance between having what's needed when and where it is needed, and flexibility as needs change.
Court notes that strategic leasing shares similarities with Public-Private Partnerships (PPPs), in terms of driving strong asset delivery and performance incentives. The guidance identifies key characteristics for using strategic leasing effectively, including short-term or unpredictable service needs, less complex assets, and similar assets being used by the private sector.
The initiative is part of the Government's infrastructure funding and financing work program, which also includes the Funding and Financing Framework, Market-Led Proposals guidelines, and a refreshed PPP Framework. The new National Infrastructure Funding and Financing Limited (NIFFCo) will support agencies in determining whether strategic leasing is suitable for infrastructure proposals.