The policy debate: Is policy enabling or hindering progress across the Construction and Infrastructure sector?

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    22 March 2023

The policy debate: Is policy enabling or hindering progress across the Construction and Infrastructure sector? Desktop Image The policy debate: Is policy enabling or hindering progress across the Construction and Infrastructure sector? Mobile Image

On Tuesday, 21 March 2023, MinterEllisonRuddWatts hosted its inaugural Construction and Infrastructure conference Building Together | [Re]set for the future for industry governors and senior executive managers actively involved in the sector. 

Co-lead of the firm’s Infrastructure and Construction division, Partner Janine Stewart, together with Dr Troy Coyle, Chief Executive Officer, HERA and Dean Kimpton, Director, Tuhura Consulting, examined the principles driving the creation of legislation and policy for the Construction and Infrastructure sector. 

Facilitated by Craig Hobbs, the panel explored the weight given to sustaining our current industry participants and framework, versus the shape we want the industry to take to service our future generations. 

At the outset, the panel identified the areas of policymaking relevant to this discussion as including statute, regulation, standards, industry policies and business.  

The three key areas
Liability settings and policy 

With particular focus on territorial authorities, the panel discussed whether New Zealand’s liability settings are right for now and for the future. 

Central to this discussion was the advantages and disadvantages of joint and several liability (the current position in New Zealand) vs proportionate liability (applicable abroad, including Australia) as canvassed by the Law Commission. 

With no indication of change in New Zealand, the panel discussed the resulting implications (including territorial authorities remaining the primary target for defects, their resulting risk aversion in processing consents, and inconsistent liability approaches for trans-Tasman businesses) and whether alternative options to altering the liability settings were available (including insurance schemes, guarantee schemes, and levies). 

Sustainability and resilience

With carbon zero objectives currently at the forefront of global policy, the panel contemplated what the New Zealand construction and infrastructure sector is wanting to achieve and where it should invest (and why). Relevant to this discussion was the true cost of resilience, including examining where the trade-offs lie when developing good policy, including the cost burden, outcomes, technology, and how the sector gets there. 

The panel debated balancing the need to serve the industry now, against taking a hard line with mandating, and against taking a softer approach allowing the industry to become more sophisticated. Ultimately, the panel considered that a ‘stick and carrot’ approach was required to ensure we meet current and future needs. 

Further discussion necessarily resulted from the latest natural disasters, which the panellists agreed spoke not only to the need to meet climate change head on but also building with more resilience, and ensuring policy considerations are in place to achieve this (such as where to build housing, roading, and other infrastructure).

Technology and efficiency

Finally, the panel considered the pace at which technology should be introduced into the construction sector – noting it is one of the slowest industries to take up technology. Some technology (e.g., BIM) has been available for some time, yet uptake remains low. Similarly, some technology – such as the virtual building inspections used during COVID lockdowns – have ceased to be used, reverting to more manual systems reliant on Council inspectors. The requirements necessary for such uptake were discussed, including again mandates vs an incentivised approach. The panellists agreed that a big hurdle was educating young people to innovate, implement new technology, and be trained and adapt as new tools arrive. Consideration was given to New Zealand’s inherently conservative culture, and the need to take a proactive approach to ensure the opportunities and benefits of utilising technology are realised. 

With this is mind, the questions remain:

How should we be making policy and what should we be putting first? 

Should the sector utilise its own power, will and purpose to achieve the desired objectives itself – or, take a collaborative approach with Government mandating priority objectives where appropriate?