BECOME A MEMBER
Connecting New Zealand

Budget clarity welcome, infrastructure construction needs urgency

31 May 2024


Civil Contractors New Zealand welcomes the clarity of the government’s future infrastructure funding plans provided by Budget 2024, but warns projects and work programmes may be too far in the future, with immediate stimulus is needed to sustain the industry. 

Civil Contractors New Zealand Chief Executive Alan Pollard said while the budget provided much-needed clarity about the future work programme, and the government should be congratulated for its focus on delivering infrastructure, urgency was needed to bring work to restore confidence to the market, so infrastructure constructors could be ready to go when projects – both large and small - came online.

“It has been hard for contractors to wait over the past few months. A significant gap in central and local government work has meant contractors have been holding on for more clarity on how, when and where the infrastructure work programme will be delivered.

“Budget 2024 at least gives some clarity, but we must work with urgency to resolve the current market downturn, so we aren’t laying off staff when we should be building capacity, and so we can get back to work constructing and maintaining the vital transport, water and other infrastructure networks NZ relies on.”

Mr Pollard said contractors were resilient, but many companies were struggling and downsizing because of a lack of work, uncertainty around future projects and spiralling expenses caused by the rising costs of regulation and procurement.

The going was particularly tough in the Auckland region which had seen a ‘perfect storm’ of projects deferred, cancelled and re-thought. While the agreement with Watercare provided some welcome relief in that region, other regions such as Canterbury had considerable construction capacity and capability, but very little forward work on their books.

He said the delay from project announcements to construction was sometimes lengthy. Government re-alignment and improvement of infrastructure investment planning and policy during this term of office was important, but urgent attention was needed to fill the immediate workflow gap so a strong and stable civil construction industry was ‘ready to go’ when projects hit the market.

It did not make sense to hold off and for businesses to scale down, at a time when infrastructure investment was sorely needed, he said.

“While the prospects for infrastructure investment under the coalition government look very positive in the medium to long term, work in the short term has dried up as clients (central and local government) cancel or defer projects.

“The largest proportion of business failures this year is in the construction sector, while other businesses are downsizing to ensure survival. That creates a significant risk for the delivery of the medium to long term infrastructure programme, as scaling up again will require confidence to return to the industry.”

Mr Pollard said it was great to see funds for cyclone recovery. But longer term adaptation works such as seawalls and stopbanks to protect communities from severe weather events needed specific attention. While considerable cyclone recovery work was planned for in Hawke’s Bay and other impacted regions, much was still in the design phase rather than under construction, and a more coherent package of adaptation work was sorely needed.

“The latest Investment Statement from Treasury put our combined infrastructure gap at a whopping $210 billion. To make headway and create a thriving New Zealand for future generations we need a lasting commitment, from all political parties, to build and maintain the transport, water, energy, and communications infrastructure that’s desperately needed.

Lack of workers and specific, targeted mental health support for under-pressure workers in construction were other key challenges faced by the industry, both during the gap in work and later, as industry scaled up to deliver on government’s vision for infrastructure, he said. 

“It has been disappointing to see the lack of recognition for the skills of civil construction workers, who operate high-risk machinery at a large scale, over several decades. 

“We need the education and immigration systems to better recognise the targeted skills that construction workers have and need – not just engineers and planners, but also skilled civil tradespeople who will construct the physical works we need.”

 

 

RELATED




Principal Business Partner
Core Associates
Major Associates
OneStaff Limited
Portacom New Zealand Limited
Hynds Pipe Systems
Turners Group Ltd: Head Office/Auckland
Connexis
Central Group
The Drug Detection Agency
Hydraulink Fluid Connecters Ltd
Infrastructure New Zealand
AON New Zealand
Holcim New Zealand Ltd
MBP (NZ) Ltd
Marley NZ Ltd
TotalEnergies NZ Ltd
RobLawMax Recruitment
SAMI Bitumen Technologies Pty Ltd
First Gas
AECOM New Zealand Limited
MATES In Construction
New Zealand Transport Agency
Wirtgen NZ Ltd
ENZED
Winstone Aggregates
Manage Company
Porter Group Limited
AWF
Prime Fluid Management
Assignar
Advice Financial
Aptella
Plan A
Enviro NZ Services Ltd
AB Equipment Ltd
MIMICO NZ Ltd
UDC Finance
Franklin Smith Group
Infrastructure Sustainability Council
Terra Cat
n3
Remarkable People Ltd
Terra Infrastructure Pty Ltd
TR Group
Trade Me Jobs
Greenlight Insurance Brokers
Global Survey - Auckland
Coninnova Limited
Over and Out Communications
Iplex Pipelines NZ
beforeUdig
Youngman Richardson
Crediflex New Zealand Limited
Vertical Horizonz NZ Ltd
Kobelco New Zealand
Reliance Reinforcing Limited
TRIG Instruments
Firth Certified Concrete
Westpac NZ Ltd
Nulca NZ
TDX Ltd
Bridon Cookes
Geofabrics New Zealand Ltd
Liebherr New Zealand
Rimkus
CivilShare
Mico New Zealand Ltd
BNZ Partners
Fluiconnecto Ryco New Zealand Ltd
Commercial Hire NZ Ltd
Brandt Tractor Limited
Geosynthetic Partners International Ltd
Solo
Komatsu New Zealand Ltd
Doug the Digger
H.J. Asmuss & Co. Ltd
Site App Pro
Norwood
Absolute Immigration NZ
GHD Limited
SITECH NZ
Northpine Ltd
RB Recruitment
Humes Pipeline Systems
ERoad Ltd
Teletrac Navman
AEL
Commercial Vehicle Holdings

Log in





Forgot password?
Create an Account