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Government infrastructure spending is good news

Government infrastructure spending is good news

The Government’s recently announced plans to boost spending in infrastructure is welcome news to an industry that needs certainty.

The Government’s plans to invest $11 billion in new capital infrastructure over the next four years, including $4 billion in this year’s budget alone, should be commended.

We will be watching with interest the delivery of Finance Minister Steven Joyce’s budget, and how exactly the funding will be invested.

As a growing modern economy, the Government’s commitment to building infrastructure such as roads, schools, hospitals and housing infrastructure is critical.

The construction sector will be integral in making the Government’s vision a reality, and it is a welcome boost to construction in New Zealand.

The strain on our housing and public infrastructure are among the biggest issues facing New Zealand. To support growth, both these demands need to be addressed. We do not see investment in infrastructure as mutually exclusive from investment in construction.

 

Lesson learned in providing early info

One of the lessons the Government has learned from the Christchurch rebuild is the need to provide as much information as it can, as early as it can.

This capital commitment is a step in the right direction to providing the industry better certainty. It provides companies more confidence to invest in people, technology and their own infrastructure.

Construction companies and building firms of all sizes struggle with their forward planning when Government itself does not have a clear long-term plan for its capital expenditure.

The latest announcement should help the sector operate on a more predictable and manageable trajectory — hopefully it will take the edge off the chronic boom and bust cycle that is synonymous with the industry.

This certainty around procurement and funding is something we will continue to work on with the Government.

The Government is the biggest customer, and influences what private enterprise investors will also do.

The Government’s announcement of greater use of public-private partnerships, and joint ventures between central and local government and private investors, is pleasing.

At the inaugural all-of-sector Constructive forum held in Christchurch in September last year, the then Deputy Prime Minister Bill English said the Government would focus on becoming a better customer to the sector.

It is encouraging to see his Government act on this promise, and we look forward to building upon this.

 

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