21 May 2020

'We've got to get going' - Union leader calls for faster start on infrastructure projects

11:13 am on 21 May 2020

A union leader is calling on the government to speed up major infrastructure projects to offset job losses in the construction sector.

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Photo: 123RF

Fletcher Building, New Zealand's largest construction company, yesterday announced it was cutting 1000 jobs in New Zealand and 500 in Australia, reducing its workforce by 10 percent.

It is the latest company to undertake significant cost-saving measures in the wake of Covid-19.

The Fletcher Building announcement came less than a week after the government laid out a recovery plan in the Budget that leans heavily on the construction of major infrastructure projects.

Amalgamated Workers Union national secretary Maurice Davis said the Fletcher layoffs looked to be affecting salaried staff, such as managers, rather than waged staff at present.

"But if there's a reduction they're going to have to go further into cutbacks within the staff and that's when I think we will see it hit our people."

Davis said Fletchers should take the extended wage subsidy, which the government announced would continue for another eight weeks for eligible companies.

"It beggars belief from my point of view. The whole point of the subsidy was trying to give the companies breathing space before they crack on." Fletcher has said it did not qualify for the second round.

Davis said residential and commercial building will be cut back and the government needs to "crack on" with the shovel-ready infrastructure.

"There were a few projects that were deferred when the government came in ... I think they should seriously look at fast-tracking those ones.

"Fletchers is our largest construction company and we need it to be vibrant, we need it to be working.

"Between saying we've got a project that's going to kick off to actually getting the first break of ground could be between nine to 18 months dependent on the complexity of the job.

"So what I'm saying to the government is come on, we've got to get going."

"There's plenty of people looking for work - we've got to get the training going. We've got to retrain people from fallen industries like aviation and tourism.

"I would have thought that Fletchers would have been the flagship of leading that charge but it looks like they're retrenching back into their shell.

"As much as I don't like it, I can understand that with the economic metrics they're giving out they've got to position themselves to come out, but they should be leading the way as New Zealand's largest company."

The Budget committed another [https://www.rnz.co.nz/news/budget-2020/416633/budget-2020-50bn-rescue-fund-in-once-in-a-generation-budget $3bn to fund 'shovel-ready' infrastructure projects, in addition to the $12bn spend-up announced earlier this year.

Finance Minister Grant Robertson is confident there will be new jobs in the building sector.

"Sadly it is not possible with a one-in-100 year economic shock to save every job and unfortunately Fletchers have taken this decision.

"I still think the construction sector will be one where we see job growth and recovery but obviously Fletchers feel that there position is such that they can't sustain their current workforce."

The Budget also set out $1.6 billion for a trades and apprenticeships training package, $400m for a tourism sector relief package and targeted sector support totalling $41.4m across three years for the construction, digital and agritech sectors.

Fletcher Building chief executive Ross Taylor said yesterday the company had reduced spending to prepare for tough times.

It was expecting Covid-19 would lead to a sharp downturn in the 2021 financial year and potentially beyond.

Taylor said while the government's commitment to back infrastructure projects was good news, growth would take time to ramp up.

He said staff would be retained under the obligations of the wage subsidy scheme, for which the company got $67.6 million, and that staff would be paid their full redundancy entitlements.