budget 2025, civil contractors new zealand, infrastructure new zealand, new zealand,
The 2025 New Zealand Budget has landed with few surprises for the infrastructure sector focusing on upgrades and maintenance over new, ambitious projects.
While it includes a notable $6.8 billion in capital investment, much of this funding is directed toward maintaining and upgrading existing assets rather than launching new, large-scale projects. Key allocations include over $1 billion for hospital upgrades, $700 million for school infrastructure, and $464 million for rail network maintenance.
Despite these investments, industry voices express concern over the lack of transformative infrastructure initiatives. Civil Contractors New Zealand (CCNZ) acknowledges the government’s commitment but warns that without immediate action to reduce delays between project announcements and actual construction, the benefits may remain limited.
The government’s approach emphasizes fiscal restraint, aiming to balance economic growth with sustainable financial management. This cautious strategy, while maintaining existing infrastructure, falls short of delivering the “nation-building” projects that many in the sector believe are necessary to boost productivity and meet the country’s long-term needs.
In summary, Budget 2025 maintains the status quo in infrastructure investment. While this approach ensures continuity, it leaves questions about how New Zealand will address its growing infrastructure demands in the future.
Infrastructure New Zealand Response
The 2025 Budget further incentivises private sector investment but doesn’t deliver the nationbuilding infrastructure that can lift New Zealand’s productivity and deliver the public services New Zealanders need.
“This is a cautious Budget in tight fiscal times. There’s no big bang for infrastructure, instead it signals further moves to support private sector capital investment and promises that need to be backed by future investment,” says Infrastructure New Zealand’s Michelle McCormick.
“The Investment Boost tax incentive, providing businesses with an immediate 20% tax deduction on new asset purchases, will be welcomed by the infrastructure industry and enable it to invest in the plant and machinery necessary to deliver future assets.”
“Another useful tweak is the change to capitalisation rules that will allow foreign owned companies to fund a higher proportion of their investment in New Zealand through debt. Again, this sends a signal that New Zealand is a good place to invest in infrastructure.”
“We also welcome the funding allocated to establish Invest NZ as the shop front for foreign investment in infrastructure projects.”
The headline infrastructure funding commitment is a $1 billion allocation to health facility upgrades and maintenance, including the Nelson Hospital redevelopment and Wellington Regional Hospital Emergency Department refurbishment.
“Asset management and renewal in our health system is overdue, but we know that our health infrastructure requires a lot more investment over the long-term,” says McCormick.
“Today’s allocation is a good start but with no contingency funding allocated to these projects there is a lack of transparency as to where the money will go.”
Infrastructure New Zealand also welcomes the following initiatives:
• The $219 million for the recovery of local roads in regions affected by Cyclone Gabrielle.
• The upgrades for Wellington and Auckland commuter rail and the investment in our rail freight network.
• The small allocation of funding to push along regional deals that could be a game changer in how local infrastructure is delivered.
“Budget 2025 confirms the Government is prioritising fiscal restraint and bringing the Government’s books back under control. But New Zealanders want to see shovels in the ground and progress towards delivery of the projects that will help grow our economy and enhance their communities.”
Source: Infrastructure New Zealand Media Release
Civil Contractors New Zealand Response
“Civil Contractors New Zealand has welcomed the Government’s 2025 Budget announcement to invest in infrastructure, but warns the benefits will be limited unless immediate action is taken to reduce the delays between project announcements and shovels in the ground.
The association said the current infrastructure pipeline was promising in principle, but noted many businesses were downsizing or exiting the market due to infrastructure announcements taking too long to reach the construction stage.
“Our members are responsible for delivering the roads, water infrastructure, and energy networks New Zealanders depend on. They are ready and willing to get shovels in the ground, but projects remain stalled in planning or bogged down in consenting processes,” said CCNZ Chief Executive Alan Pollard.
“While the Government has ensured room in its fiscal plan for emerging infrastructure needs, we need physical works coming online now so we can retain the industry experience our nation needs to address the infrastructure deficit the government has committed to fixing.”
He said projects recently announced by the Government such as Riverlink, Tauriko West and Mill Road were positive, and the industry looked forward to getting to starting work on these important infrastructure works, in addition to proposed smaller works packages.
“It would be a major missed opportunity if the infrastructure pipeline investment of $6.8 billion in capital infrastructure projects in Budget 2025 becomes a pipe dream because the country has been left with a skeleton workforce,” Mr Pollard said.
“Without a steady stream of projects, we risk not only losing skilled workers and businesses, but also the capacity to train the next generation. Many contractors are already being forced to consider scaling down or seeking opportunities overseas.”
The government’s investment in the tertiary system, including a boost in funding rates for engineering and trades was also welcome news, Mr Pollard said.
“We’re pleased to see Government acknowledge construction, engineering, and trades as priority investment areas. We know on-the-job training is the most effective way to develop a highly skilled domestic workforce, however that can’t happen if jobs aren’t available.”
Improving pathways for skilled overseas workers will help to train and bolster our domestic workforce, retaining and developing our domestic workforce is crucial to ensuring long-term capacity, he said.
“We support efforts to bring in skilled workers from offshore, but we’re pleased to see the government has not lost sight of the urgent need to retain and grow our local workforce”.
Source: Civil Contractors New Zealand
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