24th CEO Survey

Infrastructure remains a crucial issue for New Zealand

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Infrastructure remains an important driver of employment and growth. And, because of this there was a lot of talk about an ‘infrastructure-led’ economic recovery last year. There is no clear sign of the sector driving recovery yet but that’s because there weren’t a lot of well-planned projects that could get underway quickly and create jobs.

This might not matter too much right now because unemployment is low. It will matter over time though as the economy has not fully recovered and we may still need the sector to drive growth.

One of the key issues the sector is facing is the lack of human capital. The border restrictions are impacting the ability to source and retain the highly skilled and specialised workforce we need to support the sector. Simply put, we don’t have enough people with the right skills in New Zealand and need to be able to bring people in. Training takes time, so tackling this problem now will be key to getting more projects off the ground.

Some elements of infrastructure are delivered inefficiently across the country however there are moves underway to rectify this in some areas. A good example is the Three Waters Reform Programme which was announced last year. The Government should be applauded for this initiative – it will greatly improve drinking, wastewater and stormwater infrastructure. The reforms will be fundamental to delivering more efficient water infrastructure across New Zealand while ensuring water is safe to drink and managed in an environmentally sustainable way.

There are other examples of inefficiency; road, rail and water could all benefit from better pricing. Getting the correct pricing signals is an important part of delivering the right infrastructure and this mechanism needs to be used to better effect. Pricing helps people who are using infrastructure to understand when and how they are going to use it. Knowing what you need is crucial, particularly for planners and people developing projects. Understanding these issues will help drive overall productivity in the economy which leads to growth and better outcomes for New Zealand.

The Climate Change Commission’s draft report identifies transport as a key sector where emissions can be reduced. Developing pricing signals in the transport area is a key first plank to lowering emissions. Those signals, as outlined above, have the added benefit of helping work out what Infrastructure we need.

%
of New Zealand CEOs are concerned about inadequate basic infrastructure
%
say adequate physical and digital infrastructure should be a priority for government
%
say reducing climate change and environmental damage should be a priority for government

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Wilson Chow

Carl Blanchard

Property, Infrastructure and Capital Lead Partner

tel:+64 21 744 722

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