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Guidelines for no-regrets infrastructure stimulus

Infrastructure NZ CEO Paul Blair says post-budget the Government must accelerate discussions on the long-term vision, principles and larger investments required to transform the country into the new New Zealand.

“There are three horizons for the government’s response to COVID-19: the first horizon emergency measures to maintain the economy and jobs is nearing an end as we come out of lockdown.

“The second horizon is about short-term stimulus to restart the economy.

“The third horizon of work offers a once-in-a-generation chance to transform New Zealand and steer our country’s direction for decades to come.

Infrastructure New Zealand offers several guidelines for the selection of horizon two, shovel-worthy projects:

  • Maintain and upgrade – maintenance contracts tend to be more labour intensive, less complex, and more easily apportioned into smaller pieces so companies of all sizes can participate;
  • Invest in no-regrets sectors – some long-term needs won’t change in a post-COVID-19 future (e.g., clean water, healthy homes, safe hospitals);
  • Roll projects quickly into programmes – dozens of disconnected projects could unhelpfully compete for labour and supplies. Coherent programmes of work will be more efficient and achieve better value-for-money and outcomes;
  • Choose proven delivery models and partners – collaborative techniques (e.g., alliances, early contractor involvement) between trusted partners are ideal for managing risk while moving fast;
  • Embrace social procurement – supporting local businesses, apprenticeships, and all parts of our communities can ensure our investments generate wider benefits, even in the short-term;
  • Leverage local government – every $1 of extra revenue that the Crown gives to a council can be matched with $2.50 of borrowing, putting $3.50 to work in the economy. Local government should be a key partner to the Crown in fiscal stimulus, but Crown must provide funding to enable the Urban Growth Partnerships promised in its Urban Growth Agenda.

Paul Blair says these guidelines will ensure that our shovel-ready work is appropriate and does not hinder our future long-term investments.