Our helmet law may be putting people off cycling. This blog post is worth a read, especially the suggestion of a "compulsory for kids" law.
When it comes to other ways to encourage cycling, we should be following sensible cities like New York. Look at this for a safe cycle lane, with a buffer between it and the cars. In Christchurch, cars treat cyclists in lanes like slalom poles; go as close as you can without actually hitting them.
Copenhagen sets a high standard.
Amsterdam is also super cycle-friendly.