The Ministry of Works undertook substantial construction work for the government from 1876 until it was disestablished in 1988 as part of state sector reforms. When the Ministry operated, it constructed most of New Zealand’s roading, rail and energy infrastructure. When the Ministry was disestablished, several of its functions were transferred to other government departments, while other operational aspects were subsequently privatised.
Specific details have not been provided on what a future government agency or Ministry tasked with coordinating and executing government infrastructure would look like. While it seems unlikely there will be a return to the Ministry of Works, the growth and method of delivery for government infrastructure projects will be critical. We will watch this space with interest.
Fast-tracking of consents
The Minister for the Environment has supported the passage of the COVID-19 Recovery (Fast-track Consenting) Act 2020, designed to speed up the consent process for specific infrastructure and construction projects so that work can commence expeditiously during the COVID -19 recovery phase. This is intended to compliment the efforts outlined above to provide a pipeline of work in the COVID -19 recovery and to provide certainty to investors and developers. Under the new law, the Minister for the Environment has the power to determine both public and private-led projects to be fast-tracked through the consenting process. Full details of the fast-tracked consenting process can be found on the Ministry for the Environment website.
Budget 2020
Several small-scale initiatives announced in the May 2020 budget also show the government’s strong emphasis on construction. Kāinga Ora has been loaned $5B to build approximately 8,000 community houses and $1.2B has been provided to improve rail infrastructure. In terms of training, $412M has been allocated to incentivise employers to retain apprentices and $1.6B for free trades and apprenticeship training which commenced on 1 July.
These initiatives and indications outlined by the government signal that construction and infrastructure will form a key component of the COVID-19 economic recovery; however, the role and extent of private sector involvement is unclear.
Construction will form a vital part of New Zealand’s Covid-19 economic recovery. We expect further announcements from the government and other political parties over the coming months on their plans to reduce the economic impact of COVID-19 on companies operating in the construction sector, and to ensure existing projects are able to continue, and new projects to commence.
If you require advice on any of the government initiatives above, or construction concerns relating to COVID-19, please contact one of our team. End Notes 1 https://www.constructionaccord.nz/news/news-stories/covid-19-response-plan-for-the-construction-sector/ 2 https://www.crowninfrastructure.govt.nz/wp-content/uploads/1.-Shovel-Ready-Project-Information-Guidelines.pdf 3 https://www.beehive.govt.nz/release/infrastructure-investment-create-jobs-kick-start-covid-rebuild 4 https://www.newsroom.co.nz/2020/04/01/1109751/a-ministry-of-works-for-post-covid-nz