The Government is set to announce one of the biggest infrastructure packages in New Zealand history with $12 billion worth of spending to be announced on week.

Finance Minister Grant Robertson will detail a list of projects up and down the country that will be funded, with a suite of roads, rail, and hospital upgrades expected to be on the list. 

The package is roughly three times the amount of infrastructure you'd see in an ordinary budget. With borrowing rates at record lows - the Government borrowed $250 million last Thursday, paying just 1.6 per cent in interest - the Government has decided the time is right to invest. 

But questions are already being asked about whether the money is being spent in the right areas. Roads look set to be the major beneficiary with $6.8 billion earmarked for transport projects. Some are saying the money should be spent on things like improving New Zealand's ailing water infrastructure.

"That's more investment into infrastructure in one go than most would have seen in a generation," Prime Minister Jacinda Ardern told her caucus last week, ahead of a closed-door briefing on the package.

Ahead of the budget, the Government was planning on spending $35.2 billion on infrastructure over the period from 2019-2023. That's now been revised up to $41 billion - the rest of the package will be spent after 2023/24.

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Part of the reason the Government wants to spend so much money in so little time is to stimulate the economy as international headwinds put pressure on growth. But that puts pressure on what sort of projects the Government can choose. It can't afford to waste time consenting new projects - the money is better spent on projects that are closer to construction.

The Government has spent months making the case for increased investment, noting that spending on infrastructure plummeted under the previous Government. 

The amount of new capital spending for each 1000 additional people living in New Zealand fell from from $142 million in 2011/12 to just $37m in 2016/17, according to an ANZ report. 

RESURRECTING THE RONS

National Transport spokesman Chris Bishop thinks several of his party's Roads of National Significance (RoNS) are likely to be included in the package.

"We obviously know they're looking at all of the roading projects that were 'reevaluated' after the change of government - we prefer to use [the term] 'cancelled' or 'delayed'", Bishop said.

He's betting the Government brings forward funding for roading projects like the Melling interchange in his Hutt South electorate, currently budgeted at $120 - $175 million, although the project isn't funded until at least 2029.

Bishop is also predicting that the full Tauranga Northern link will be resurrected, a four-lane expressway that heads north to Omokoroa. It's currently slated to be built as a two-lane project, with the option to go up to four lanes if necessary.

"That road was consented, funded and out for procurement when the Government changed," Bishop said.

Other likely projects include an extension of the Kāpiti expressway from Otaki to North of Levin, and extending the Waikato expressway along a section of road from Cambridge to Piarere.

In the South Island, the Woodend Bypass looks set to be funded too.

The roads were being progressed under the previous Government but were either effectively cancelled or paired back after the coalition took office.

The list of projects is likely to be spread around the country much like the $400 million of funding for improving school buildings the Government announced in November.

Nearly every state school gets a slice of the funding, meaning voters throughout the country see the benefits of the package.

GOING TO THE RIGHT PLACES?

Infometrics economist Brad Olsen believes the Government should be looking beyond headline-grabbing roads, to some often neglected projects.

He's pointed the finger at New Zealand's aging water infrastructure as an area that needed major, urgent investment. He warned that without it, cases like the burst 1930s-era pipe, which flooded Wellington harbour with effluent over the summer, would become much more common.

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"If we can't get any clean drinking water and stop getting dirty water flowing into our natural environment what's the point?" he said.

An analysis by Infometrics has found that council-led infrastructure in water is expected to be $17.2 billion over the next decade, split between $11.6 billion in waste and stormwater, and $5.6 billion for water supply.

Although it's almost $7 billion more than was spent on water infrastructure the previous decade, Olsen warns that it's barely enough to replace water assets at the end of their life. This leaves little money for new infrastructure needed to cope with a growing population and the demands of the Government's three waters review, aimed at improving the quality of drinking water, storm water and waste water.

More than half of the investment in waste and stormwater is to replace assets that are at the end of their working life, with only a quarter of the money earmarked for additions and improvements.

Water supply networks are where there is the greatest shortfall. According to a Beca report, these are expected to cost between $3 and $4.4 billion. Much of this funding is in addition to what is already budgeted. 

Upgrading wastewater treatment plants is also expected to cost between $2.5 and $3.8 billion.

But with water unlikely to deliver the political wins of roads, hospitals and schools, it looks like the councils will have to look somewhere else for increased funding. 

Other sure bets include upgrades to hospitals, with $300 million pencilled-in to fund upgrades to DHBs.

A 2018 report from Treasury estimated $14 billion would be needed to upgrade aging hospitals over the next decade. The Government put $750 million towards this in the 2018 budget, and topped this up in the 2019 budget with a further $1.7 billion.

DECARBONISATION

Another $200 million will be spent "decarbonising" public assets.

Green Minister Julie Anne Genter explained when the package was announced this would include projects like replacing carbon-intensive boilers in hospitals. 

"An example would be swapping-out a coal boiler for woody biomass," she said. 

Wherever the Government spends the money, it wants to make sure it gets it out the door quickly, stimulating the economy. 

The current plan is to spend $200 million of the package this year, rising to $1.4 billion in 2021. It will spend $2.1 billion in 2022 and then $2.2 billion in 2023 and 2024 with the remained of the package being spent after 2025.

Treasury believes the benefits of this will be seen in increased GDP growth, which is expected to lift by 1.4 per cent (or $3.9 billion) over the next four years thanks to the package. 

The Government will be hoping those forecasts are correct.