insight

Big Build

16 December 2020

Big Build is our quarterly publication tracking legislative and regulatory reform and other developments affecting the construction and infrastructure sector. 

2021 promises a wall of work as the Government looks to the construction sector to ease the economy through the recession and to reduce the housing shortfall. But the border restrictions are exacerbating skills shortages, there is competition for labour and consenting for projects can create delays. So while there is opportunity, there will also be obstacles to delivery.

We hope you find our insights within this publication useful. Please get in touch with one of our experts if you would like to discuss any topic in more detail. We offer market-leading expertise and a seamless service for all your project needs – from financing, planning and consent through to all stages and facets of the construction process.

Construction

Government and regulatory

A carbon neutral public sector by 2025

The Government has committed to achieving carbon neutrality within the public sector by 2025. Elements include:

  • a $200m fund to replace coal boilers
  • a requirement that public agencies buy electric vehicles or, where this is not practicable, hybrids, and reduce the size of their fleets
  • a requirement that any new buildings over 2,000 square metres, have a five star green rating and that any new leases have four star ratings, and
  • a requirement to measure and publicly report on their emissions, off-setting any that cannot be cut by the 2025 deadline.

For more information, read the Government's statement.

2021 – requiem for the RMA

Environment Minister David Parker is planning to make quick work of implementing the Randerson Report, telling a recent conference: “There is a clear mandate for reform and we will now implement the reform package, which we expect to land within this three year parliamentary term”. 

Consistent with this timeframe, the Government has committed in the Speech from the Throne to have an exposure draft of the “first bill” out in the first half of next year. The Government is expected to pick up most of the recommendations of the Randerson Panel, including the creation of three new pieces of legislation:

  • a Natural and Built Environments Act
  • a Strategic Planning Act, and
  • a Managed Retreat and Climate Change Adaptation Act.

Read Parker's speech here.

houses in blenheim

New Building Code requirements

The Building Code has been strengthened in relation to surface water drainage and waterproofing in bathrooms, kitchens and laundries as part of a move to support high density housing. The changes will come into effect on 4 November 2021.

To learn more, read the announcement.

10 days sick leave Bill introduced

The Government has introduced the Holidays (Increasing Sick Leave) Amendment Bill which will double sick leave entitlement from five days a year to 10, but will keep the current maximum entitlement for carrying over any unused sick leave at 20 days. 

The Bill is expected to pass mid-2021, with the changes coming into force two months after Royal Assent.

Read the Government's statement.

1. Construction

Industry

road cones

National landslide database

EQC is developing a National Landslide Database which will capture information held by local and regional councils, Crown entities (GNS Science, EQC, KiwiRail, Waka Kotahi NZ Transport Agency), and geotechnical consultants.

Landslides cost the country an average of $250m to $300m a year.

To learn more, read EQC's statement.

Apprentice numbers up sharply

Close to 14,000 new apprenticeships have been started since the free apprenticeship policy was introduced on 1 July this year – almost double the number from the same period last year. And more than 17,000 learners have enrolled in Targeted Training and Apprenticeship Fund programmes in industries critical to the recovery, up from 12,800 enrolments in 2019.

Education Minister Chris Hipkins said the increases, plus research by the Tertiary Education Commission, indicated that public attitudes toward vocational education and training were shifting. 

To learn more, read the full statement.

BDO survey counts COVID costs

The BDO survey for 2020 shows that the greatest impact of COVID-19 in the construction sector is uncertainty of future work with 69% of those surveyed reporting that contracts had been delayed or cancelled due to the pandemic. 

The Number Two concern was falling margins, with 22% planning to reduce staff numbers and BDO identifying that there may be a “race to the bottom” mentality setting in.

To read more, view the survey.

Christchurch City Council cries foul over urban development NPS

Christchurch City Council and its Mayor, former Labour MP Lianne Dalziel, have come out strongly against the National Policy Statement (NPS) on Urban Development, describing it as an attempt to impose “Auckland rules” across the rest of the country.

The NPS requires the five growth councils – Auckland, Hamilton, Tauranga, Wellington and Christchurch – to accept building heights up to six storeys in central areas and along transport corridors.  Councils have until August 2022 to change their planning documents to reflect the NPS.

To learn more, read the article.

Huge demand for construction workers in Otago

A feasibility study prepared by BCITO, Infometrics and Martin Jenkins estimates that the Otago region will require more than 1,000 more construction industry workers a year for each of the next 10 years.

To learn more, view the study.

Infrastructure

Quick returns on fast track consent process

The Matawii water storage reservoir in Kaitaia was signed off on 23 October 2020, becoming the first project to be consented under the new fast track process. 

In addition to the projects listed in the legislation, a further eight (as at 8 December 2020) had been referred by Parker for the fast track treatment. They cut across a range of sectors from residential and retirement developments to commercial and industrial.

They will now go to an expert panel for consideration with decisions expected early in 2021.

To learn more, read the statement or the MfE information.

auckland city harbour

Congestion charging for Auckland

A report commissioned by Treasury, the Ministry of Transport, Auckland Council and Waka Kotahi NZ Transport Agency is recommending a congestion charge per trip within the isthmus of $3.50 at peak hours, either $1.50 or $2.50 at other times, and free between 7pm and 5.59 am.

The work programme was initiated by Simon Bridges as then Minister of Transport in 2016 and the Government is planning to progress it through a select committee inquiry to maximise the chances of getting a cross-party consensus.

Estimates on the economic costs of Auckland’s congested transport network vary, but one estimate puts it at $1.2b a year.

To learn more, view the report.

New Zealand Infrastructure – ready for lift-off? 

A central theme in our Infrastructure – Trends & Insights publication, released in early November, is that New Zealand might be about to obtain lift-off. COVID-19 has opened the Government’s wallet, and there has been significant policy action over the last two years to address some of the pinch-points that have frustrated progress in the past.

Many of these reforms are relatively recent (e.g., the fast track consents process and the NPS on Urban Development) so have not borne much fruit yet – but they will. And, as discussed above, we have a complete rewrite of our resource management law in prospect.

But the size of the job is huge, with Transpower estimating that achievement of New Zealand’s Paris Agreement commitments will require the construction of 55 new grid-scale renewable power stations and battery storage schemes within the next 15 years. And the border restrictions under COVID-19 have aggravated the construction sector’s already acute skills shortages.

So there are still question marks over how much concrete progress will be achieved.

To learn more, read our Infrastructure – Trends & Insights publication.

Speak to our experts

  Hamish Bolland, Partner

 Greg Wise, Partner

 Fiona Bennett, Partner

Related insights

See all insights