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IPW: Australia and New Zealand’s workforce reviews, and South Africa’s energy outlook

Date
17 January 2024

In this week’s Infrastructure Policy Watch, Australia and New Zealand look to improve construction capacity, and South Africa’s energy conundrum.

IPW: Australia and New Zealand’s workforce reviews, and South Africa’s energy outlook
The volume of construction activity remains very high in Australia. Image credit: Shutterstock

Australia and New Zealand review infrastructure workforce capacity

Infrastructure Australia (IA) published its third annual Infrastructure Market Capacity report in December.

The report identifies challenges in the construction sector which are putting Australia’s strategic infrastructure goals at risk.

Limited supply of local construction materials, a shortfall of 229,000 public infrastructure workers and weak productivity are of particular concern.

One result is price uncertainties in the supply chain making delays and cost overruns worse.

Infrastructure demand has flattened over the past year in Australia, but the volume of construction activity remains very high.

Despite the government recently cancelling 50 projects, the public infrastructure pipeline still stands at AUD$230 billion over five years.

IA makes 14 recommendations to the government to manage demand and improve outcomes, including:

  • Issuing whole-of-government guidance to ensure cross-sector market capacity is considered in infrastructure decision-making.
  • Developing a national infrastructure workforce strategy.
  • Launching a productivity study and agreeing metrics and a baseline to raise performance.

New Zealand workforce analysis

The New Zealand Infrastructure Commission / Te Waihanga has published its first baseline analysis of the country’s infrastructure workforce.

Like Australia, demand in New Zealand has risen, driven by a large infrastructure deficit and recent extreme weather events.

Te Waihanga aims to anticipate future capacity pressures and strengthen preparedness.

Actions could include better sequencing of projects, training and recruitment practices.

The report looks at the workforce across design, construction and asset management.

It estimates there were 108,000 full-time equivalent workers in 2018. This is around 4.7% of the overall New Zealand workforce.

The commission says increasing gender and ethnic diversity is a key opportunity for improving New Zealand’s capacity to build infrastructure.

The ICE’s view

Australia and New Zealand aren’t alone in their construction challenges – most other advanced economies face similar difficulties.

In all societies, infrastructure is key to meeting long-term economic, social and environmental goals.

But governments can only achieve them if they have the workforce to do so.

That’s why studies such as these are so important – providing the data and evidence-based recommendations to guide decision makers.

For Australia’s government, improving productivity is key for it to meet its strategic objectives in areas such as housing and decarbonisation.

This is why the ICE has launched a programme looking at what measures can be taken to improve Australia's productivity in infrastructure delivery.

South Africa consults on new energy plan

South Africa’s government is consulting on a revised energy plan.

Frequent power cuts continue to impact the lives of South Africans and constrain growth.

The updated Integrated Resource Plan analyses the government’s options for fixing the country’s energy crisis.

Its conclusions include:

  • The short term (up to 2030) electricity supply deficit remains ‘concerning’, and existing initiatives won’t meet demand.
  • The government intends to delay shutting down coal fired power plants where technically feasible.
  • From 2031 to 2050 the system will require a ‘massive’ new build programme. This must begin quickly due to significant capacity needs in just over a decade.
  • Energy pathways using only renewable and clean energy technologies won’t provide a secure supply by 2050 and will carry the highest cost to deliver.

The government must balance meeting the immediate electricity shortfall while achieving its longer-term climate objectives and managing costs.

It says a mix of clean coal and gas power alongside new nuclear and renewable capacity can do this.

But at best it will still take several years to meet demand while pushing back the timeframe for South Africa’s clean energy transition.

The ICE’s view

Potential delays to South Africa’s energy transition are concerning, particularly in the context of a global shortfall in progress towards sustainable energy targets.

South Africa’s energy crisis is part of a wider infrastructure delivery challenge that is undermining public services.

All governments face difficult challenges and trade-offs when tackling long-term challenges.

These include managing public opinion, building investor confidence and controlling public spending in difficult economic times.

Putting in place robust long-term strategies is key to supporting decision-makers.

The ICE’s Enabling Better Infrastructure programme aims to assist the strategic planning and prioritisation of infrastructure.

This can help ensure the public gets the infrastructure that they need, in alignment with the Sustainable Development Goals (SDGs).

In case you missed it:

Check back in the new year for the next edition of the ICE's Infrastructure Policy Watch.

You can also sign up to ICE Informs to get a monthly digest of the latest policy activities from ICE, including calls for evidence to support our ongoing advice to policymakers.

  • David McNaught, policy manager at ICE