The industry has been through six years of tough going, with plenty of lows and not many highs. It’s been brutal. The mandate for Government is clear: we need certainty.
Obviously, global certainty is not possible. But local certainty? Yes please. Budget 2026 needs to deliver a consistent pipeline of public infrastructure work. We need functioning, well-maintained infrastructure that keeps up with the needs of the population. Instead, it’s broken, and it will never be fixed when we flip-flop every three years as the Government changes.
Three priorities for the Budget: Pipeline, consenting, procurement
These are the three biggest problem areas I’m regularly hearing about from the market. So, here are three big asks for this year’s Budget.
1. A reliable long-term pipeline of work
An increasing number of projects are being deferred, descoped or put on hold. Without a credible, committed multi-year pipeline of public infrastructure work, construction businesses can’t plan and invest accordingly.
This calls for a national infrastructure plan, with agreed-upon projects and maintenance timelines. The plan needs to be adhered to whether it’s red or blue in charge. It should set out detailed planning for the next three to five years, with high-level plans for the following 10 or 20 years.
New Zealand has a woeful track record on infrastructure: we are in the top 10% per capita for spending and in the bottom 10% for delivery, according to the OECD. Right now, New Zealand is not an appealing destination for project specialists. They look at the cost of mobilising people and equipment to the other side of the world, combined with the risk of projects being delayed, reprioritised or cancelled within political cycles, and often decide it’s not worth it. This matters, not because we should rely on overseas players, but because it limits the flow of global expertise, competition and capability into the market.
More importantly, it highlights the need to build stronger, more resilient local construction businesses. A more stable and predictable pipeline of work would give domestic firms the confidence to invest in people, technology and scale, reducing reliance on offshore capability over time.
As one leader told me, “A steady pipeline of housing and infrastructure projects would help stabilise prices, stop lumpy demand and enable us to forward plan resourcing much more effectively”. Another noted the cost of maintaining and upgrading ageing infrastructure will only rise, “We’re leaving it all to future generations who are going to be left with a hefty bill to pay for poor infrastructure”.
2. A consistent nationwide consenting process
Consent authorities’ decision-making processes are problematic and a major constraint in the sector. They also create inconsistencies between regions.
Budget 2026 should deliver more funding toward a national consenting system. Reform is currently underway, but it seems to be stuck at the investigation stage.
There are currently 67 building consent authorities across the motu that oversee building consent applications, inspections and code compliance, with no consistent interpretation of building regulations.
By contrast, many international systems apply national building rules through more standardised processes, reducing variability between regions and improving certainty for developers.
Slow decision-making and lack of consistency significantly increases development costs and puts investors off. Making consenting reliable and predictable, even if the timelines were still long, would make a huge difference.
3. Procurement should align risk with reward
We need to see the Government do a better job with procurement. As one construction leader put it, the public sector is, “driving a race to the bottom on price – it risks putting many private consultancies, construction partners and suppliers close to the brink”.
Several leaders echoed this concern. When procurement overly prioritises lowest cost, contractors are often forced to bid at unsustainably low margins just to secure work. This creates a range of downstream issues, including increased exposure to unforeseen costs, heightened sensitivity to delays, and reduced capacity to absorb complexity as projects evolve. In practice, this can lead to corners being cut, disputes over scope, or contractors attempting to recover margin through variations and claims, all of which ultimately increase project risk and cost rather than reducing it.
This is incredibly problematic in an industry already operating with tight margins and high levels of financial and delivery risk. It also discourages investment in capability, innovation, and long-term capacity building across the sector.
The public sector has a clear opportunity to shift this dynamic. Procurement settings could move away from a primary focus on lowest upfront price toward selecting for sustainable delivery. This means placing greater weight on whole-of-life value, contractor capability, track record, and more balanced allocation of risk between parties.
Getting this balance right would not only improve project outcomes but also create a healthier and more resilient construction sector.
These changes will help improve the entire economy
Each of these factors reinforces the others, and they all stem from a weak pipeline. Delayed and cancelled projects mean businesses cannot invest in capability. When risk is poorly defined, projects fail to progress. When consenting is unpredictable, timelines and budgets blow out and investor confidence disappears. When the sector is struggling, the talent heads offshore or into another industry.
The Government is the construction sector’s largest client by far and a major contributor to the role the industry plays in our economy. The decisions it makes shifts the entire market, and the Budget gives them the opportunity to swing that huge spending power in a positive direction.
According to Stats NZ, the construction sector is one of New Zealand’s largest employers, comprising over 81,000 businesses with more than 10% of the country’s total workforce. But right now, it’s a frustrating industry to operate in, with companies merely surviving rather than growing and investing. Every three years, a political flip-flop means cancelled projects, new priorities, and delays causing chaos for those involved. At an individual level, people are sick of it; businesses have been closed, people have moved to Australia.
Nobody wants it to be this way – including both of New Zealand’s major political parties. One frustrated construction business owner raised a great point about how both major political parties agree it would hugely benefit the country by delivering more certainty over supply and demand which in turn would solve many more of the sector’s major challenges. But neither appears willing to find common ground about what to fund, and not to do a 180 degree turn once they get into office.
