Budget 2023 is being criticised as one which lacks vision and does little to solve the myriad of problems New Zealand is facing
Prime Minister Chris Hipkins describes his first budget as one which “delivers the targeted and affordable investments New Zealand needs right now. It’s support for today and building for tomorrow.”
For infrastructure, that investment comes in the form of $6 billion for a National Resilience Plan to focus on building back better from recent weather events. This comes on top of an increased infrastructure investment of $71 billion over the next five years.
This has potential to deliver results, but the investment must come with more certainty around the work programme ahead and focus on the work at hand, Civil Contractors New Zealand Chief Executive Alan Pollard says.
“New Zealand has taken a beating from severe weather events, which has made our massive and well-documented infrastructure deficit even worse and will require sustained funding and focus to overcome.
“It’s great to see recognition of the role well-planned preventative works can play in mitigating the damage flooding and severe weather events can wreak on our infrastructure and communities, and licence given to Waka Kotahi to carry out much needed work.”
But more detail around the work is needed to give civil contractors the confidence they need to invest in new and emerging technologies, and to invest in hiring and training staff. Because of this, it is important they have confidence in a consistent a pipeline of work.
Pollard says it is all too common to see infrastructure budgets remain unspent due to holdups from changes to design, delivery, and administration. Funding is needed to finance tangible work on the ground, rather than growing the amount of government administration.
“As a country, we have a lot of catching up to do. A commitment for $71b in infrastructure investment over five years can enable a lot of good work. We need to make sure it leads to actual work on the ground and leads to productive outcomes.”
Infrastructure New Zealand was less optimistic, with Chief Executive Nick Leggett saying it does not get even close to addressing the country’s infrastructure deficit, which is in the hundreds of billions of dollars.
“More plans, more apparent pots of money, but the funding pool remains the same and the only source is from the back pocket of the taxpayer. New Zealand badly needs to access private capital to inject into a sustainable building plan for our infrastructure,” Leggett says.
“New Zealand continues to miss opportunities in its infrastructure delivery, efficiency and scale by solely relying on the Government to fund improvements to our roads, public transport, resilience and water infrastructure.
“As a country, New Zealand doesn’t lack for promises, plans or ambition. However, it often lacks action in getting infrastructure projects built. Budget 2023 doesn’t deal with that problem.”
Projects like a second Auckland harbour crossing and Get Wellington Moving require capital that the Government just doesn’t have, he says.
“Further focus on private financing of infrastructure would build New Zealand better, and faster.”
Infrastructure New Zealand is also concerned that this Budget is yet another announcement of ‘big money’, without a plan or practical understanding of how to get things built.
Leggett says, with some exceptions, this Budget does not solve the immediate and long-term challenges facing New Zealand’s poor public infrastructure.
“You can only hit the ball out to the future with big dollar promises for so long before people start feeling the reality of decades of underinvestment with a shallow funding pool and a workforce shortage. Our question to the Government is, how are you going to deliver this?”
He agrees with Pollard that there needed to be a pipeline of essential work guaranteed outside of election cycles and budgets, with funding locked in.
“That way the sector can prepare a workforce and have the kind of skills on hand to make these builds a reality.”
