Major roading projects could be used to help stimulate an economy damaged in fighting coronavirus.
Major infrastructure projects could get an $800 million boost from the Government in an effort to boost the economy once the country moves into recovery mode after the coronavirus crisis.
Ministers have unveiled plans to press ahead with key projects around the country that are ready to start as soon as the construction industry returns to normal in an effort to put a brake on the impact of the pandemic.
Infrastructure Minister Shane Jones told Stuff up to $800 million would be diverted from the provincial growth fund – the multi-billion-dollar investment programme for regional New Zealand – to support infrastructure projects around the country.
The money would be used for projects that will “enhance the productivity and the ability for our backbone industries to expand”, he said.
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But it will not take away from projects under way using money already allocated under the provincial growth fund.
“Obviously we’re not going to be capricious and stuff people’s projects up that are half way through towards completion,” Jones said.
Announcing the plans on Wednesday, Jones and Economic Development Minister Phil Twyford said the new projects would be in addition to the Government’s $12 billion New Zealand Upgrade Programme and existing provincial growth fund infrastructure investments.
A crack group of infrastructure experts has been formed to put forward projects that earmarked as being key to helping rebuild the economy.
The Infrastructure Industry Reference Group will be headed by Crown Infrastructure Partners chairman Mark Binns, and will include former Reserve Bank governor Alan Bollard, who helped steer New Zealand through the global financial crisis.
The group will put forward projects to ministers from the private and public sector that are “shovel-ready” or likely to be within six months.
It is not the first time big building projects have be used by government in an attempt to boost the economy.
In the early 1980s, the then National government’s “Think Big” projects, including the Clyde Dam and the Motunui synthetic petrol plant, were developed to help recovery from the Oil Crisis.
“We are focused on the health and wellbeing of New Zealanders first and foremost, and we need to get through the lockdown and out the other side of this pandemic,” Twyford said.
Regional Economic Development Minister Shane Jones says locals are still getting jobs through the Provincial Growth Fund even if that data isn’t kept.
“However, the Government is also planning ahead for when that time comes.
“That’s why we are now developing a pipeline of infrastructure projects from across the country that would be ready to begin as soon as we are able to move around freely and go back to work.”
The types of projects the Government would consider included water, transport, clean energy and building projects.
To get funding they must have a public or regional benefit, create jobs and be able to get under way in short order, Twyford said.
Other members of the Infrastructure Industry Reference Group would be New Zealand Transport Agency chairman Sir Brian Roche, and KiwiRail chief executive Greg Miller.
A member of the Construction Industry Accord would also join the group.
The Accord is a membership organisation of private construction groups including Fletcher Building and Downer, and organisations like councils and Fonterra with an interest in the construction industry.
“While the economic effect of Covid-19 is yet to be fully understood, we know that we have an opportunity to move our country into action mode and the Government does not wish to see red tape stymie our eventual recovery,” Jones said.
“The reference group will be seeking out larger projects, those with a value of over $10 million, which would have an immediate stimulatory effect on the construction industry, its workforce and the economy,” Jones said.
“Smaller projects will be considered if they demonstrate a direct and immediate benefit to the regional economies and communities in which they are based.
“In the meantime, the Provincial Development Unit will continue to work with local councils to identify regional roading projects, particularly in the identified surge regions, to provide employment and boost local economies.”