It hasn’t taken long for the machinery of government to crank up again after the summer break. The Government’s first 100 days milestone looms large in early March, and we are expecting it to be a busy year on the policy and advocacy front with a large focus on infrastructure.

Prior to Christmas the Government’s Mini-Budget and Half-Year Economic and Fiscal Update (HEYFU) was released, which laid out the financial challenges that we are facing. It also formally spelled the end of some significant infrastructure projects like Auckland Light Rail, Let’s Get Wellington Moving, and signalled some organisation and system changes like the disestablishment of Te Pūkenga and abandonment of Industry Transformation Plans. Parliament also went into urgency as it repealed the previous Labour Government’s Natural and Built Environment Act and the Spatial Planning Act. The Resource Management Act 1991 is back filling the void in the interim, along with the continuation of the Covid-19 recovery fast-track consenting legislation.

New fast-track legislation is expected to be introduced on 7 March. There has been a minimal amount of consultation with industry with one online session to outline the key concepts and seek some feedback that we have been involved in within a relatively short period of time.

Infrastructure New Zealand supports the continuation of a fast-track consent pathway for significant infrastructure development. It is important that lessons are learnt and applied from the covid recovery legislation and that there is sufficient resourcing available for the administration of the system. Statutory timeframes for processing of applications is critical to ensuring the efficiency of the system and enabling development to proceed in a timely manner. This would seem an excellent opportunity to also utilise the Infrastructure Pipeline and priority list work that has been undertaken by the New Zealand Infrastructure Commission / Te Waihanga as a mechanism to identify projects that could be considered for fast-tracking. Infrastructure New Zealand is keen to hear from members on their views as we prepare our submission on the proposed legislation.

The pace continued with the Water Services Acts Repeal Bill introduced and passed under urgency in mid-February. This legislation largely unwinds Labour’s Affordable Water legislation, but leaves the new water quality regulator, Taumata Arowai, in place.

The hard work really starts now with the translation of National’s Local Water Done Well into legislation, with the plan to pass this second bill by the middle of the year. This legislation will establish the framework and transitional arrangements for the new system, including provisions for delivery plans, transitional economic regulations, streamline requirements for establishing council-controlled organisations and assist Auckland Council to devise a workable model for Watercare.

The final bill in this suite of work is expected to be introduced in December and passed by mid-2025 and will provide for the long-term replacement of the water services regime. Importantly, this legislation will set out provisions for ensuring long-term financial sustainability; provide for economic regulation; and a range of structural and financing tools.

Given the timing of these various pieces of legislation, Councils will still be challenged as they prepare and consult on their long-term plans which need to be in place by 30 June 2024. Recent news that S&P Global Ratings have revised the outlook for 15 councils from “stable” to “negative” highlights the financial pressures that councils are under as they face up to the reality of funding long term water assets again.

Prior to Christmas, Infrastructure New Zealand sent Hon Chris Bishop and his infrastructure and regional development portfolio colleagues a copy of our Briefing to the Incoming Minister (BIM) for Infrastructure. We also released this to our members. The BIM outlines on behalf of the sector, our priorities for this Parliamentary term and beyond, drawing largely on our published policy positions. Subsequently, we have met with Hon Chris Bishop and Hon Simeon Brown to discuss these priorities and to hear how the government’s plans might address the issues raised.

In January, we also released two more policy positions papers focused on the delivery of mega projects and water infrastructure and services. These received significant media coverage, including Martina Moroney, INZ Advocacy and Strategy Lead, being interview by 1News and on Morning Report for RNZ. There was also good coverage of the policy recommendations by print media as well as other INZ media releases and opinion pieces including the following articles:

Our Chief Executive, Nick Leggett, has also presented on the following topics to various conferences and sector groups in February, alongside his media interviews.

  • Infrastructure: Unclogging the Arteries
  • Infrastructure Priorities for 2024
  • Wellington Infrastructure Issues
  • New Zealand’s Infrastructure Challenges and Opportunities

Policy Investigations and Case Studies

The reinstatement of SH25A in the Coromandel before Christmas, including the construction of the new Taparahi Bridge across a massive hillside slip, is a good news story for the sector.  We thank the project team McConnell Dowell/ Fulton Hogan Joint Venture, and designers BECA and Tonkin + Taylor for their input, as well as RCP for their work in helping to pull together a case study on the lessons learnt from this project.

Infrastructure New Zealand’s Funding and Financing Working Group has continued its work drawing on our members’ expertise to learn more about different procurement and financing arrangements that could be suitable for mega projects and also form smaller community and economic partnership projects or programmes of work.

Utilisation of third-party financing for long term assets which are paid off through a revenue stream makes good sense where the risks are correctly allocated. Given the fiscal constraints that the Government is under, combined with aspirations of addressing our infrastructure deficit, alternative funding and financing models are going to be looked to increasingly. 

There is an opportunity to learn more at the upcoming Infrastructure Funding and Financing Conference at Te Papa on 26 March, with two masterclasses also available the following day on risk allocation in contracting and place-based agreements for local government professionals.