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New Zealand Infrastructure – Ready For Lift-off?

Pressure on all forms of infrastructure in New Zealand remains high with little evidence of physical progress in recent years. But, we may now be about to obtain lift-off, according to law firm Chapman Tripp in a publication released today.

“This is mainly due to the huge infrastructure spend the Government has embarked on as part of its response to the economic impact of COVID-19 but there has also been significant policy action to address the pinch-points we identified in our 2018 analysis”, says Chapman Tripp finance partner and infrastructure team co-lead, Mark Reese.

Examples included the creation of Te Waihanga: Infrastructure Commission and Kāinga Ora, the National Policy Statement on Urban Development requiring all councils to provide sufficient land and infrastructure to meet expected population demand, and the fast track process for shovel-ready projects.

Paula Brosnahan, co-lead of the firm’s infrastructure team and environmental, planning and resource management partner said that, as many of these reforms were relatively recent, they had yet to translate into much physical activity.

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“But they will. And there are more changes on the way, most obviously, and most significantly, the repeal and replacement of the Resource Management Act.”

Climate change would also create a spur for investment, both through its weather effects and increasingly, through the incentives created by the Zero Carbon Act and the Emissions Trading Scheme.

But the size of the job was huge, especially in the electricity sector where Transpower estimates a 55% increase in generation capacity is needed to achieve New Zealand’s Paris Agreement commitment to net carbon neutrality by 2050. The firm thinks that meeting this challenge is going to require a paradigm shift.

The border restrictions were also exacerbating New Zealand’s persistent skills shortages at a time when many businesses were already in retrenchment mode.

So, while there were many reasons to believe that New Zealand’s decades-long pattern of under-investment in infrastructure may be about to end, delivery to the levels required to spark a meaningful improvement in productivity, social wellbeing or emissions reduction is still far from guaranteed.

The firm’s publication, New Zealand Infrastructure – trends & insights is available on their website.

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