Measures announced to provide relief to construction sector amid COVID-19 crisis

Advance payments to transport construction workers and seeking new infrastructure projects post COVID-19 lockdown are part of the measures announced by the government


With the construction industry grinding to a halt during the four-week lockdown in New Zealand, measures are being announced to encourage the sector to not let go for sub-contractors and other workers.

In an announcement made on 1 April 2020, transport minister Phil Twyford said transport construction industry contractors will receive advance payments during the COVID-19 lockdown to retain the workforce and ensure it’s ready to quickly gear up to build projects that would be vital to New Zealand’s post-pandemic economy recovery.

"The decision to bring payments forward will provide financial relief through the four-week lockdown period to enable suppliers to retain their workforces, ensuring they can quickly restart work and be in a strong position to respond to any future government infrastructure packages," the minister said.

He added that as part of the planning for the post-lockdown economy, the government is making sure they can build more critical infrastructure as soon as possible to help stimulate the economy.

"The Transport Agency is also continuing planning and design work so that more projects are ready to move to construction as soon as works can resume," the minister said.

New post-pandemic infrastructure group has been formed

The government has also tasked a group of industry leaders to seek out infrastructure projects that are ready to start as soon as the construction industry returns to normal to reduce the economic impact of the pandemic on New Zealand, economic development minister Phil Twyford and infrastructure minister Shane Jones said.

The Infrastructure Industry Reference Group, which will be headed by Crown Infrastructure Partners chairman Mark Binns, will put forward to ministers projects from the private and public sector that are ‘shovel-ready’ or likely to be within six months.

The type of projects to be considered will include water, transport, clean energy, and buildings. They would also have a public or regional benefit, create jobs, and be able to get underway in short order.

The government will decide which projects could be funded, contracted, and ready to go.

"We are focused on the health and wellbeing of New Zealanders first and foremost, and we need to get through the lockdown and out the other side of this pandemic. However, the government is also planning ahead for when that time comes," Twyford said.

"That’s why we’re now developing a pipeline of infrastructure projects from across the country that would be ready to begin as soon as we are able to move around freely and go back to work."

The group will include NZTA chairman Sir Brian Roche, KiwiRail chief executive Greg Miller, and Infrastructure Commission chairman Alan Bollard as initial members and will work alongside the Provincial Development Unit (PDU).

A member of the Construction Industry Accord will join the group and the recently established Infrastructure Commission will also provide advice and expertise. However, the ministers will make the final decisions.

"While the economic effect of COVID-19 is yet to be fully understood, we know that we have an opportunity to move our country into action mode and the government does not wish to see red tape stymie our eventual recovery," Jones said.

"The reference group will be seeking out larger projects, those with a value of over $10 million, which would have an immediate stimulatory effect on the construction industry, its workforce, and the economy.

"Smaller projects will be considered if they demonstrate a direct and immediate benefit to the regional economies and communities in which they are based. In the meantime, the Provincial Development Unit will continue to work with local councils to identify regional roading projects, particularly in the identified surge regions, to provide employment and boost local economies.

"These projects will help address the country’s infrastructure deficit as well as create jobs and buoy the economy."

Ministry of Works not ruled out

When asked whether the Ministry of Works would be revived at the end of the COVID-19 recovery, Phil said he "wouldn’t want to rule out that more hands-on approach." Jones added that he was strongly in favour of it.

"We're receiving a great deal of advice. And I have to say quite a lot of senior identities in the infrastructure community have already put forward the notion of something akin to the Ministry of Works," Jones was quoted as saying by Newsroom.

"The term Ministry of Works I realise might lead to allergic reactions. I'm far more allergic to the prospect of 15% of my fellow New Zealanders being consigned to joblessness.

"I don't want to be engaged in ideological tussles with people who have a hang-up about the term 'Ministry of Works'. I'm saying show the hang-ups you've got for the 15% of Kiwis that are likely to be in the ranks of the jobless."

Find machinery for sale in NZ

Keep up to date in the industry by signing up to Deals on Wheels' free newsletter or liking us on Facebook