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Source: New Zealand Parliament – Hansard

WEDNESDAY, 22 JULY 2020

The Speaker took the Chair at 2 p.m.

Prayers.

ORAL QUESTIONS

QUESTIONS TO MINISTERS

Question No. 1—Finance

1. Hon JUDITH COLLINS (Leader—National) to the Prime Minister: Does she stand by her statement that “when we’re talking about infrastructure, it’s not just about the projects we in the Government are responsible for, we also have the opportunity to partner with communities, with iwi and local government. That’s what the $2.6 billion worth of shovel-ready projects we announced earlier this week were all about”?

Rt Hon JACINDA ARDERN (Prime Minister): Yes. I also went on to say “Things like Home Ground, a project by the Auckland City Mission that will provide 80 apartments with wrap around support and care, or the Poverty Bay Rugby Park Grandstand … right through to the Invercargill inner city development. Collectively these projects are estimated to create over 20,000 jobs in the next 5 years.” These projects demonstrate our commitment to infrastructure that creates jobs, contributes to our communities, and achieves more than roading projects alone. I am very proud to be of the Government of infrastructure.

Hon Judith Collins: Why is the Government not releasing the full list of projects and starting work when it has been reported that 45 percent of engineering consulting firms are now considering cutting staff?

Rt Hon JACINDA ARDERN: First of all, it would be wrong to assume that the sum of the Government’s infrastructure announcements are the COVID response and recovery infrastructure projects. In fact, the New Zealand upgrade, announced in February, is $12 billion worth of infrastructure, which, in education alone, $249 million worth of projects have already been approved for 2,400 projects. Secondly, when the COVID pandemic hit, we moved straight away to generate jobs through infrastructure. On 1 April, we created the Infrastructure Reference Group. On 17 May, we received over 1,900 potential projects; that was then provided to Ministers. We worked through a shortlist of 800. On 29 June, very quickly, they were signed off, and on 1 July they started to be rolled out. We’ve already had hundreds of millions of dollars’ worth announced. Some we continue with due diligence, but we are moving as swiftly as we can.

Hon Judith Collins: Does the Prime Minister acknowledge that there are 200,000 construction workers in receipt of the wage subsidy and there is a crying need to get shovel-ready projects underway faster than she says her Government is capable of?

Rt Hon JACINDA ARDERN: One of the issues with making sure we have shovel-ready projects is that we had an infrastructure deficit left by the last Government. In health alone, we had projects that we have had to wind up as a Government because DHBs did nothing to prepare for their capital works because they were provided with no support from the last Government to do it. That is why we’ve had a deficit of shovel-ready projects. Though, to come directly to the answer to the member’s question: again, it is wrong to say that, solely, we are reliant on the COVID response projects to provide a pipeline of work. In fact, we are the Government that established the Infrastructure Commission to determine that pipeline as well. We already have $750 million worth of projects announced. We are moving quickly, but we are ensuring due diligence as well.

Hon Judith Collins: Can she explain why her Government’s programme has resulted in industry leaders stating “The current situation is incredibly frustrating. We know the work is out there, but unless we know where, what and most importantly when projects will start, contractors are left totally in the dark. They will have no choice but to put workers off or face the risk of companies going under.”?

Rt Hon JACINDA ARDERN: Again, as the Government of infrastructure, this is the investment of this Government in infrastructure, and can I point out that this is actually the generous graph—this is the one that includes the Future Investment Fund, where the last Government sold assets in order to put a paltry amount into infrastructure. This Government is a Government that has acknowledged that we had a deficit, but not only in projects but in skills, and that is why we have invested over $1 billion to make sure that we overcome that deficit and the legacy of that member’s Government as well.

Hon Judith Collins: Is it true that her Government’s processes have led to industry leaders stating, “The problem now was that no one could see six to 12 months ahead, so they were taking risks [even] retaining staff on assumptions that work would appear or [else they have to cut back the] hours.”?

Rt Hon JACINDA ARDERN: I have read the full context of that exact article the member quotes from, and I’d like to, again, point out, actually, another part of that article. It says, “We’ve seen this happen before. [In] the early 90s, thousands of jobs were shed, creating a capability crisis lasting a decade,”—[Interruption]

SPEAKER: Order! Order! Turn the volume down.

Rt Hon JACINDA ARDERN: —”whose ripples remain today. The loss of skill and capacity in engineering and construction meant under-investment”. We are still having to repair from the under-investment—significant under-investment—of the last Government. We are doing that: $1 billion into skills, $12 billion into the New Zealand Upgrade Programme, and, in the last Budget alone, $45 billion in infrastructure and an infrastructure commission to create the pipeline of work that that member’s last Government did not.

Hon Judith Collins: Is she concerned that projects are being rolled out over coming weeks by ministerial visits—as confirmed by Shane Jones, who said, when asked, he “wouldn’t want to break a habit”—when there are so many jobs dependent on those projects being announced and they could be announced now, not waiting on a ministerial visit?

Rt Hon JACINDA ARDERN: No.

Hon Judith Collins: What is her response to Infrastructure New Zealand chief executive, Paul Blair, who has said companies are running out of time: “It’s very stressful, it’s increasing costs and it’s completely avoidable. The full list and timing of shovel ready projects”—

SPEAKER: Order! Order! I am going to interrupt the member. The quotes that the member is using are getting unreasonably long. We were relatively liberal with the first quote from the Prime Minister, but I think the member does know she’s got to summarise.

Hon Judith Collins: Could I do it again?

SPEAKER: Yes, the member can start again.

Hon Judith Collins: Thank you very much—thank you. What is her response to Infrastructure New Zealand chief executive Paul Blair, who has said companies are running out of time: “It’s very stressful, it’s increasing costs and it’s completely avoidable.”?

Rt Hon JACINDA ARDERN: Again, I would correct the member and say that it is incorrect to assume that the bulk of infrastructure investment coming from this Government is solely the $2.6 billion from the Infrastructure Reference Group. In fact, the vast majority, of course, has been announced and has started rolling out prior to now. Finally, though, we are moving simultaneously. We had over 1,900 projects that we have whittled down as quickly as possible. We are simultaneously working through the final details and contract negotiations whilst announcing them as quickly as we can. It would be wrong for us to announce projects without having done due diligence; the member would be the first to point that out if that was the case.

Hon Judith Collins: Then why are 200,000 construction workers on wage subsidies, which are due to expire very soon?

Rt Hon JACINDA ARDERN: I think you’ll find that in the global financial crisis, we saw a downturn as well. We are not going to let that happen on our watch. We are working as quickly as we can to make sure that we do not have an environment where, right when we need these projects, we see people backing away. But the member is oversimplifying. Many developers, for instance, are experiencing tighter criteria and loaning requirements from their banks. There are a range of factors at play. We are trying to counteract that with our investments.

Hon Judith Collins: When will the Prime Minister release the full list of shovel-ready projects to give certainty to the construction workers relying on her Government?

Rt Hon JACINDA ARDERN: Again, for the $2.6 billion which sits within the over $40 billion or more announced from Budget 2020, $750 million has already been announced, and we are moving as quickly as we can to finalise any contractual issues and notify successful applicants as quickly as we can.

MIL OSI