Source: New Zealand Labour Party
National Infrastructure agency
Like Chris Hipkins said earlier, we welcome the creation of the National Infrastructure Agency. The introduction of the 30-year plan is a positive step towards addressing our significant infrastructure deficit.
A truly non-political process must be entrenched within the NIA, Treasury, and the Infrastructure Commission to give this plan the credibility it needs. Safeguards against political interference and the risk of flip-flopping to appease party donors and vested interests are essential for the long-term success of this initiative.”
We need the NIA to engage in an inclusive consultation process with local communities, Iwi, and other stakeholders to ensure that the infrastructure projects it oversees are aligned with community needs and aspirations.
Short-termism and the infrastructure deficit
In government, Labour worked to tackle the infrastructure deficit head on by increasing investment levels significantly after years of underfunding.
Since the election we have seen many major projects stopped or paused, paralysing parts of the infrastructure sector.
The problems with this approach are well known by those of you in this room who have had to absorb losses, cut staff, and wait to know what is going to happen next.
Uncertainty like this hurts communities and puts unnecessary financial strain on many who are doing it tough right now.
But this flip-flopping has downstream effects on businesses. The head contractors have to stop their work, which flows through to the myriads of sub-contractors supporting the project.
These are subbies who may have turned down a project having expected other work, perhaps companies hired an extra worker to help with the construction or made the investment into a new piece of machinery.
These are the people that do not get paid. These are the people who have let go of staff or as we are seeing increasingly liquidate.
We have seen how flip-flopping decisions contribute to the erosion of your sector’s capability and capacity, where skilled workers are leaving New Zealand for Australia. There are 8000 fewer jobs in the construction industry since this government came into power.
Every skilled worker we lose is not just a loss for today but a hurdle for tomorrow.
When the time comes to ramp up infrastructure investment again, we will face the challenge of having to rebuild this capacity.
If we are serious about overcoming this deficit, we must recognize that preserving and growing your sector’s capability is as important as the investments themselves.
We need to be smarter about the way we plan and deliver.
The Infrastructure Commission made light of this point recently when it noted that our spending is comparable to other advanced economies as a percentage of GDP, but that this spend is incredibly inefficient. Wayne Brown also made the point, but is other words.
We have significant challenges to tackle – how to address historic underfunding, how to streamline our planning and business case processes, and how to improve our workforce capability and capacity – but if we cannot get past the short-termism, we are going to struggle to face them.
It is not necessarily the funding or financing that is holding us back.
We need to be better in how we procure and ensuring we have the capability and capital in New Zealand to build and maintain what is needed.
Let me be clear—This problem will not be fixed through a sole focus on infrastructure. We must also ensure our settings are right in immigration, tax, and education systems to improve the capability and capacity of the infrastructure workforce.
Recognising the shortcomings of short-term thinking in infrastructure, I want to work with all of you to fix them.
Bipartisanship
Everyone in this room knows how crucial a stable pipeline of projects is for solving New Zealand’s infrastructure challenges.
The last Labour government established the Infrastructure Commission to help address this and we remain supportive of its work to develop long-term infrastructure plans and the Infrastructure Priority List.
I am encouraged to hear much talk about long-term planning and bipartisanship. This was the intent when establishing the Infrastructure Commission.
But while it is easy to talk about bipartisanship now, actions speak louder than words. The current government has made decisions that undermine this principle by cutting critical infrastructure projects initiated by Labour—projects that were essential for the long-term development of our nation.
If we are to genuinely pursue bipartisanship, it cannot be selective or convenient.
It must be a commitment to consistent, long-term planning that transcends political cycles. And to repeat what Chippie said earlier, bipartisanship means working together, toward a shared and common goal. It does not mean being informed of the plan, through a speech, without any opportunity to be involved.
National needs to practice what they now preach—real bipartisanship means supporting essential infrastructure projects regardless of which party initiated them because that is what is best for New Zealand.
When politicians agree, the sector has shown what it can achieve for the country – the Waterview Tunnel and City Rail Link are two examples of this.
Other countries like Ireland, Australia and Denmark have developed models for fostering bipartisanship – meaningful roles for opposition parties in developing long-term infrastructure plans, special select committees to identify areas of consensus across the pipeline, and formal bipartisan agreements to give certainty to the sector, to name just three.
These approaches are all worth exploring for New Zealand.
As we consider them, it will also be important to include the voices of local communities and mana whenua, both of whom have significant roles to play in delivering pipeline certainty.
Although the Minister of Infrastructure made a point about sending us letter in speech yesterday, he failed mention that I asked for this in June and I wrote to him last week about working together to develop this enduring infrastructure pipeline.
If the Minister will not respond to me, I know he will to you. So if you believe in bipartisanship is important, please continue to challenge him.
I am a realist – we will not always agree, but for the sake of the country, we must all work together and we must do better. And that also means we will stand by each other when the heat is on politically, as opposed to what we saw with the NPS Urban Development.
Procurement (PPPs)
One area in particular that we must improve in is procurement.
At present, discussions about procurement are mainly focused on Public-Private Partnerships (PPPs).
PPPs are one way of procuring infrastructure though, as Sir Michael Cullen recognised, they are not the answer to all the infrastructure challenges that we face.
While PPPs can bring valuable capital and expertise to our infrastructure projects, they must be approached with caution to ensure that public accountability and equity are not compromised.
The National Infrastructure Agencies’ role in facilitating private sector investment is welcome, particularly as new funding models like tolling, value capture, and levies are explored.
The NIA must operate with transparency and maintain a strong focus on serving the public good, ensuring that the benefits of infrastructure development are felt by all New Zealanders.
Funding appropriate levels of infrastructure investment, streamlining the planning system, reducing the complexity of business cases, and improving the capabilities of key workforces will all have a greater impact on solving our infrastructure deficit than any contractual model ever could.
But I want to be clear: Labour is open to supporting PPPs where they make commercial sense and where they align with our values of fairness, co-operation, and some form of public ownership/control of critical infrastructure.
To make commercial sense, the relative benefits of traditional procurement approaches must be clearly understood before proceeding with a PPP.
Equally, it is critical that PPP risk sharing arrangements work for both the public and private sectors.
We have seen how rushed PPP deals with poorly developed affordability thresholds and unrealistic risk allocations can create major challenges for the Crown and other parties. Variances are not our friends.
Any future PPP model must learn from these experiences.
To align with Labour’s values, PPPs must also not undermine public sector capability, particularly when it comes to operating public services in sectors like health and education.
Where PPPs improve public sector capability and help us procure international expertise to build particularly complex projects, Labour is open to considering them.
An updated PPP model should also look to leverage the growing willingness of iwi to participate in significant infrastructure projects.
I look forward to engaging with the sector about PPPs and procurement policy more broadly.
Climate
As well as working together more constructively and improving our procurement practices, I want to stress Labour’s commitment to developing climate resilient infrastructure.
The extreme weather events of 2023 laid bare the need to futureproof our network infrastructure and how fundamental it is to the wellbeing of communities.
As we embark on this 30-year journey, it is essential that our infrastructure planning is not just about building for today, but about preparing for the challenges of tomorrow.
The NIA must prioritise climate resilience and sustainability in every project it undertakes, ensuring that our infrastructure is capable of withstanding the impacts of climate change and supporting future generations.
Although Chris Hipkins has already spoken about climate and infrastructure, I want to mention one challenge that affects us all in particular – insurance.
Many of you have seen and experienced the huge increase in insurance premiums in recent years. Having spent some of my working time in the insurance industry, I also know how important it is to financial stability.
As we experience more frequent extreme weather events and there is a greater transition to risk-based pricing for insurance, we should expect premiums to rise especially for exposed communities. If insurers won’t provide cover, then a moral hazard occurs and governments may be required to act.
Insurers did not anticipate the losses from a flood in Auckland, they never expected a cyclone of the level that we saw in the Hawke’s Bay region. These types of events were not in their modelling, but now they are.
Insurers and reinsurers look at what governments are doing to help adapt to climate risks and quite frankly they are not seeing a lot from this Government.
As a country, we need to show that not only do we believe in climate change, but that we are taking climate adaptation seriously by understanding and mitigating natural hazard risks.
Earlier in the year, Suncorp called for enhanced central coordination on climate adaptation.
But what has this Government done? Cancelled the National Resilience Plan and the Climate Emergency Response Fund, both of which were helping communities adapt to the changing climate and investing in resilient, low-emissions infrastructure. The ACT Party submitted a Bill that would stop regional councils from factoring in the negative effects of climate change in consenting decisions.
These are not the actions of a government committed to building resilient infrastructure over the long-term.
As a nation, we must integrate resilience and climate change considerations into every aspect of our infrastructure planning and decision-making processes.
Part of this planning process is resource management.
Everyone agrees that the RMA takes too long, costs too much and does not deliver the environmental protections expected of it.
That is why we developed and passed the Natural and Built Environment Act and Spatial Planning Act – to move decisions away from individual consent processes to regionally made plans and to do the long term planning for areas to grow and to stay away from because of climate issues such as sea level rise.
Most parties agree that this spatial planning is needed to inform decisions about where infrastructure is needed and so we encourage the Government to revisit these Acts.
The challenges posed by climate change are not theoretical—they are real, immediate, and require decisive action.
How we choose to address these challenges will define our ability to protect and sustain our communities for generations to come.
I am keen to hear your views on how we can better achieve this integration and ensure that our infrastructure is not only strong but also resilient in the face of future challenges.
The Labour Party stands ready to work constructively with you and the Government on improving how we plan and deliver infrastructure in New Zealand.
We must work together to rebuild confidence and develop a more enduring and stable infrastructure pipeline that reflects the needs of communities.
We must take a sensible approach to procurement that uses the right tool for the right problem rather than trying a one-size-fits-all approach.
And we must acknowledge the far-reaching impacts of climate change for our infrastructure.
Finally, we must recognize that our infrastructure planning and delivery systems are deeply interconnected with our broader social and economic environment.
The infrastructure we build is a direct response to the needs of our people and our economy, and it must be designed to support long-term growth, equity, and sustainability.
Infrastructure does not happen in a vacuum; it is part of a wider social and economic context. Every project we undertake must be seen through this lens, ensuring that the infrastructure we build today will serve the needs of future generations.
I am here today to listen, and I welcome the opportunity to engage with you all further.