Grant Robertson in row with National MP Andrew Bayly after shovel-ready project scheme 'fails to launch'

Only 49 out of 170 of the Government's shovel-ready projects have begun construction, but Infrastructure Minister Grant Robertson says it should be celebrated. 

The Government set aside $3 billion last year to finance around 170 "shovel-ready" infrastructure projects across New Zealand in a bid to stimulate the economy after COVID-19. 

But almost a year since the Government announced it was on the hunt for shovel-ready projects, 121 of the ones that were approved have not yet begun construction.

National's infrastructure spokesperson says the shovel-ready scheme has "failed to launch", and described it as the next "failure to deliver" after the KiwiBuild housing scheme. 

"Why, 12 months after the shovel-ready programme was announced, are there still shovel-ready projects - 121 - with no shovels in the ground despite there being over 200,000 people on the jobseeker benefit?" Bayly asked in Parliament. 

Robertson said the Government has done its best to save the construction sector, after COVID-19 threatened to bring it to the ground, with bleak unemployment projections last year. 

"When we called for projects for the Infrastructure Reference Group in April last year, and announced those projects in July last year, economists were expecting mass unemployment and a potential collapse of the construction sector," he said. 

"Thankfully, that scenario has not eventuated and in many parts of the country the construction sector is in fact at capacity."

Stats NZ revealed this week that construction sales reached $19.6 billion in the December quarter, up $897 million or 4.8 percent on the same time in December 2019. 

Stats NZ also revealed last month that the unemployment rate fell from 5.3 percent to 4.9 percent, defying Treasury's half-year economic forecast last year of 6 percent.

But Bayly is also questioning Robertson's revelation that 15 of the approved shovel-ready projects are being "re-scoped" and "potentially may not go ahead", but he believes many of them will be. 

Bayly said the shovel-ready projects were supposed to be projects that would be up and running in six to 12 months to help offset job losses elsewhere in the economy, and asked why it's taking so long for them to get off the ground. 

"It's interesting that Mr Bayly would be so cavalier with taxpayer money as to not want due diligence to be done on all the projects that we fund," Robertson said. "This is 15 projects out of over 200 projects which have been contracted."

Robertson said Bayly should "celebrate the success of New Zealand's construction sector", given that in April last year Treasury had projections of unemployment up towards 20 percent.

"That did not occur. We now have extra workers in the construction workforce; we have a pipeline of work," Roberson said. "Many of these projects are likely to go ahead but are the subject of due diligence at this time."

But Bayly is also questioning why the Government spent $100 million on a feasibility study into a pumped hydro scheme that won't have shovels in the ground until 2023 at the earliest. 

Labour committed $70 million to accelerate progress on a pumped hydro scheme at Lake Onslow which has been identified by experts as the renewable project that could address New Zealand's dry year needs. 

It's predicted Lake Onslow, a man-made lake in Otago, could be capable of storing the same amount of all of New Zealand's existing hydro schemes combined, which could help to create power grid stability in dry seasons. 

The Government already committed $30 million into a business case for pumped hydro at Lake Onslow and other smaller schemes in the North Island. Labour announced during the election campaign a further $70 million in design and engineering work based on the findings. 

"That project and the member's attitude to it exemplifies exactly what is wrong with the approach the Opposition is taking. This is a scheme that can revolutionise the way in which we deliver sustainable energy in New Zealand," Robertson said. 

"Their reaction to it tells you all you need to know. You stay in the 19th century Mr Bayly, it's fine."