Finance Minister Grant Robertson wants to change budget rules to allocate capital spending over several years, but has stopped short of announcing an increase in overall capital spending.
The announcement was made at a speech given to the KangaNews New Zealand Debt Capital Markets Summit in Auckland this morning, where Robertson addressed business concerns in the wake of the collapse of Ebert Construction last week.
The construction industry has raised concern that there was not sufficient security in the pipeline for future projects. Newsroom reported that an MBIE report found the non-residential building pipeline would begin to taper off towards the end of the decade.
Robertson said he had instructed Treasury to report on whether the Government “can move to more certainty on capital funding across budgets”.
“Being able to signal forward several years not only the pipeline of work, but also the scale of Government investment, will help the construction industry plan ahead, including in terms of which skill sets they will require,” Robertson said.
He noted that there would be further announcements from ministers about the clarity of the long-term pipeline in the next few weeks.
Robertson told reporters after the speech that the current settings for allocating capital spending meant any decision about a capital purchase had to be accounted for in the year in which the decision was made, rather than the year in which the funding was spent.
“I think that skews the way in which we’re putting together our capital spending.”
He said that the change, plus a planned announcement about the infrastructure pipeline next week, would give much greater certainty about the Government’s “investment pathway”.
But he stopped short of saying the Government would look to increase its own spending on infrastructure.