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A report highlighting major and widespread productivity challenges facing the construction sector has underlined the importance of the Government’s plan to make it easier and more affordable to build. Building and Construction Minister Chris Penk says, “The New Zealand Chinese Building Industry Association has released a report investigating the building and construction sector and outlining […]
A report highlighting major and widespread productivity challenges facing the construction sector has underlined the importance of the Government’s plan to make it easier and more affordable to build.
Building and Construction Minister Chris Penk says, “The New Zealand Chinese Building Industry Association has released a report investigating the building and construction sector and outlining the opportunities and challenges of one of New Zealand’s most important sectors.
“The construction sector is a crucial part of the economy, contributing $99 billion in sales in 2023 and indirectly supporting 20 percent of all jobs in New Zealand.
“However, the report paints a grim picture of the sector, finding that productivity levels have remained the same since 1985 – an extraordinary statistic considering how much technology has advanced since that time.”
“Another key challenge is the increasingly slow build process, with the time taken to build a home increasing by 50 percent since 2013, from 13 months to 19 months,” Chris Penk says.
“These factors combine to create an unaffordable housing market which forces Kiwi families to spend more and more of their income on housing. It is particularly confronting that renters now spend nearly 40 percent of their income on housing.
“This is reflected in the report, which asked New Zealanders to describe the construction sector with one word, with the most common response being ‘expensive’.
“The findings of the report are exactly why the Government is focused on streamlining the building consent system and removing unjustifiable red tape that is slowing down the build process.
“Lifting productivity in the sector will not happen overnight but it is vital to build more homes so more Kiwi families can benefit from living in a stable home and gain all the associated social and health benefits.”
Infrastructure New Zealand’s latest reports underscore that the country’s infrastructure challenges won’t be resolved by insular thinking. For too long, New Zealand has adopted a narrow approach to infrastructure development. It’s time to look outward and aspire to be a globally competitive nation.
Tackling productivity issues is essential to vying for international prestige and addressing the issues the building sector consistently faces. Planning right, investing in innovation, and forming robust regulations are key.
“Our peers abroad, in countries with similar democratic and legal systems, have tackled the same issues we face. Learning from their successes and mistakes is crucial,” says Infrastructure New Zealand Chief Executive Nick Leggett.
“Over the years, these delegations have successfully identified best practices, facilitated knowledge sharing, and sparked debates about their application in New Zealand,” Nick says.
“Post-COVID, the reinstatement of these study tours allowed us to learn from the infrastructure achievements of similar-sized economies and the UK’s approach to regional devolution and water services management.”
In Ireland and Denmark, strong national visions and collaborative political environments have produced robust legislative frameworks, innovative funding mechanisms, and integrated planning systems. These countries exemplify the benefits of cohesive transport systems and political consensus.
In the UK, long-term planning and political agreement have driven the success of devolution deals. City, Region and Town Deals have empowered local councils through significant devolution of authority and funding, fostering effective partnerships with central government. The involvement of the private sector, Iwi, and civil society is crucial in realising the potential of these deals in New Zealand.
Wales presented a profit reinvestment model for water infrastructure, potentially lowering borrowing costs and consumer charges—welcome news amid rising rates.
“It’s now up to us to redefine the infrastructure debate and aim for what others have achieved. We must shift from inward focus to a long-term vision that includes political maturity and systemic consistency,” says Nick Leggett.
“To be globally competitive, New Zealand needs to embrace international examples and be ambitious for its future.” Connecting with overseas building and manufacturing firms is one step in the right direction. What the Government’s agenda setting means in practice for industry, only time will tell.
Chris Penk says, “As part of our ambitious agenda to reform the building and construction sector, this year the government has already progressed a raft of changes to make it easier to build, including:
• Removing barriers for overseas building products to be used in New Zealand
• Progressing work to make remote inspections the default approach, which offers significant productivity gains over traditional methods of inspections
• Making it easier for minor changes to be made to a building consent to remove the need for an additional application to be lodged for small changes
• Putting the spotlight on building consent delays by requiring councils to publish processing times every quarter
• Reviewing the earthquake-prone building system to better balance safety with cost and risk.
“I thank the New Zealand Chinese Building Industry Association for this insightful report into the building and construction sector that underlines the importance of making it easier and more affordable to build so Kiwis can live in the quality affordable homes they deserve,” Chris Penk says.
