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Infrastructure Spending Welcome but Relies on a Step Change

“We’re delighted with today’s announcement of $12 billion in new capital investment by the Government,” says Infrastructure New Zealand CEO Paul Blair.

“The next critical step is to give the industry certainty, execute effectively, and procure in partnership with iwi, councils, and the private sector in alignment with the Construction Sector Accord principles.

“It is encouraging to see the Government using its recent surplus to invest in productive infrastructure to deliver environmental, social, cultural, and economic outcomes.

“Transport, health and regional investment, as well as earlier announced spending on schools, comprise the majority of the allocations.

“A long awaited $6.8 billion investment in roads and rail is the highlight of the package and represents by far the largest transport commitment from the consolidated fund by any Government in over a generation.

“The $300 million allocated to regional investment could generate significant benefits in the provinces, particularly if leveraged to attract local and private investment.

“Stepped increases in capital spending over the next few years will see net new Government capital investment peak at close to $12 billion in 2021, up from just $1 billion five years ago.

“Project reprioritisation has impacted both government and industry’s ability to get projects delivered in recent years, affecting business confidence and economic performance.

“A significant barrier to execution is the Resource Management Act, which is why we’re delighted to see the Randerson-led review underway.

“In the interim, the most effective way to expedite resource management approvals would be to partner with councils to make sure that communities, iwi, and businesses are adequately engaged on projects.

“Two of our poorer performing infrastructure portfolios, housing and water, do not feature heavily in today’s announcement.

“However, it is pleasing to see critical legislation around a new drinking water regulator, new powers for Kāinga Ora, and new infrastructure funding and financing tools being addressed with urgency.

“For urban development to be effective, urban water, transport and housing need to be planned and delivered in an integrated fashion.

“If the Government can deliver its ambitious programme, this is a great start to build momentum and address our long-standing infrastructure issues, but we are not there yet,” says Blair.


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