Annual SurveyCCNZ updateContractor

Finding out what matters in an election year

Photo: Night shift installation of tactile warning pavers at Springs Rd bridge splitter island in Christchurch. Works by Artisan Paving NZ and photo by Ezra from Artisan for the EPIC photo competition Round Four.

By Alan Pollard, CEO, CCNZ
I don’t like election years. Billboards create eyesores around our communities. Policy promises are withheld or made for the very things we should expect our government to deliver as a matter of course.

Fiscal prudence gives way to election bribery from parties desperate to hold onto power or those desperate to gain power. And 2023 is shaping up to be no different.

So, what should we expect from an incoming government? Honesty and transparency would be a good start (if those terms aren’t mutually exclusive when it comes to government). But how about what members have told us?

We have just published the results of the Construction Industry Survey, which is an annual partnership between Civil Contractors New Zealand and Teletrac Navman that captures the mood of the civil construction industry.

We have conducted this survey since 2017 and, this year, the top five things that respondents expect from any incoming government are: increased funding for infrastructure capital and maintenance; increased investment in training and apprenticeships; a clearer pipeline of infrastructure work; better support for businesses working in the civil construction sector; and changes to immigration settings.

None of these are new. All of them have been repeatedly put to the current Government during this past term, and all of them are critical if our infrastructure construction needs are to be addressed.

To delve into these issues more deeply.

We know we have a massive infrastructure deficit (about $210 billion according to Infrastructure Commission estimates), and we also know a massive investment is needed in cyclone recovery and rebuild.

The Government committed $71 billion to infrastructure investment over the next five years in the May 2023 budget, and about $6b for cyclone recovery and resilience. And we are seeing ever-bigger announcements and debates about large projects that will potentially be built many years from now – or not.

But what we still aren’t seeing is the talk about infrastructure investment turning into actual committed and funded projects, whether that is new capital works, maintenance, or renewals. Or, proposals to provide ongoing long-term funding in a way that fixes the gap between the ever-diminishing Land Transport Fund and the National Land Transport Programme.

In our survey, 84 percent of respondents said a clearer pipeline of work would have the most positive impact on the sector, but only 28 percent were confident there would be a well-defined future pipeline of work, only 18 percent had confidence in the Government commitment to infrastructure, and only nine percent were confident adequate funding would be made available for infrastructure capital and maintenance projects.

Without confidence in the projects ahead, the industry cannot carry the risk of continuing to invest in the training and new technology needed to deliver those projects to close the deficit. We need to shift to a system that better recognises whole-of-life value in construction, better funds whole-of-life maintenance, and better enables us to respond if, and when, disaster strikes.

Businesses are already stressed trying to meet project commitments while dealing with a skilled labour shortage, cost and wage inflation, and the burden of ever-increasing compliance.

What is often overlooked by policy makers, especially for small to medium contractor businesses, is the burden of training and pastoral care falls on the people who are also delivering the projects and generating revenue for their business. Any distraction from this will often have significant delivery and financial consequences.

There needs to be a fundamental rethink of our education system, which has failed and continues to fail trades-based sectors, and also provide better support for, and the promotion of, trades training and apprenticeships.

I acknowledge the Apprenticeship Boost scheme has helped employers keep and take on new apprentices. However, in August 2022 the subsidy reduced from $1000 a month per first year apprentice, to $500 a month for all apprentices, regardless of whether they are in their first or second year of training.

Many businesses are struggling, and those in the civil construction sector are no different. It is disingenuous to blame this all on global economic trends. It was the Government’s own decision to artificially ramp up the minimum wage, while setting employer and employee against one another through a new dispute system for collective ‘fair’ pay agreements.

Government spending has focussed on inflating the public service and creating new inefficiencies, often with little productive benefit to show for it, has pushed up prices, including business finance costs, putting huge pressure on businesses across the economy. And, unnecessary compliance requirements across just about everything we do is pushing up costs for the end user, delaying delivery and, in some cases, causing businesses to exit.

Excessive compliance stifles innovation and progress, and as I see it, New Zealand is currently sinking under a mass of regulation and compliance obligations. An incoming government, left, right, or centre, must tackle this issue if we are to have any hope of being a modern, progressive, and competitive economy.

Changes to immigration settings was identified by 69 percent of survey respondents as more likely to positively impact civil construction businesses in 2023. With skill shortages still featuring highly, and a limited domestic labour pool – which will become even more limited now our Government has reached an agreement with its Australian counterparts to make it easier for New Zealanders to obtain Australian residency.

Much more needs to be done to ensure an immigration pathway that provides for the import of the skills that we need, via an immigration system that is welcoming for the skilled workers we need, rather than acting as a deterrent.

While some civil roles were added to the Green List pre-Xmas, the Accredited Employer Work Visa has criteria that is highly restrictive and doesn’t support how a modern project focussed business operates in practice.

This has led to an immigration process that is slow and cumbersome, and very expensive. Other visa categories, such as the low skilled visa, available under our sector agreement, have no or few civil construction roles included.

It is not good enough to simply talk about constructing our infrastructure, and to continue with failed policies that hinder rather than support a high performing and vibrant civil construction sector.

Now is the time to actually do something about it.

We will watch with interest as the election campaign unfolds and will press all parties to put forward policies that will make a difference rather than policies that may appeal to party faithful.

And, remember, on polling day, 14 October 2023, around 60,000 people employed in the civil construction sector will get to make their own judgement by exercising their democratic right to vote. I’ll be glad when it’s all over.


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