Media Release – For Immediate Release
4 May 2005

Contractors prepare for the worst with carbon tax

The New Zealand Contractors’ Federation is calling on the Government and other infrastructure funders to “get real” about infrastructure project costs on the back of rising fuel taxes and today’s announcement on carbon tax levels.

Federation chief executive Richard Michael said with recent fuel price hikes, the carbon tax, a skills shortage and funders trying to squeeze the contracting industry further around infrastructure costs, there was a real concern about the viability of future infrastructure projects.

The civil contracting industry provides and maintains the country's infrastructure of public services including energy, transport and telecommunications.

“The civil contracting industry is a vital part of building the infrastructure that we need for future economic growth,” Mr Michael said.

“The Government is signaling it wants to spend billions on infrastructure projects over the next few years to make sure we have the foundations for future economic growth. But to meet that demand, the civil contracting industry will have to spend about $200 million for every $1billion to be able to deliver on those projects,” Mr Michael said.

“This kind of investment, on top of rising fuel taxes and the carbon tax, is a huge burden for the industry to absorb without recognition and flexibility by funders,” Mr Michael said.

“If the Government and other funders choose to ignore these factors, there is the potential to perpetuate the boom and bust cycles that have plagued the industry over previous decades. New Zealand, now more than ever, needs a functioning civil contracting industry.

“Funders have got to get real about what it is paying for,” Mr Michael said.

ENDS

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