Back to school as the Government looks to help struggling construction industry

The Government is funnelling new money to build classrooms, as it looks for immediate fixes to stem back-to-back reports of a declining construction sector.

Construction’s deep decline was made clear in last week’s official economic report from Stats NZ. The construction industry fell even 1.8% for the quarter, which brought it to an annual decline of 9.4%.

The Government is now looking at what projects it can quickly get off the drawing board. Education Minister Erica Stanford says her ministry will be able to fast track the existing school infrastructure pipeline.

She said accelerating the plan would see “every school” benefit from repairs or construction before the start of the 2026 school year.

“We're not only fixing classrooms faster, we're creating jobs in every community with tradies working in every school this summer,” Stanford promised, on Monday.

Alongside Prime Minister Christopher Luxon, Stanford said the Government would boost school infrastructure funding with a $58 million one-off top and $175 million of brought-forward funding.

She said that would mean every school was getting a 50% boost to its maintenance funding.

The funding would be added to a pool which included $180 million of pre-allocated funds for school buildings.

Stanford said that would mean work on an extra 45 school-led projects waiting in the “pipeline” would start by the end of this year. Construction has been one of the worst-hit industries. Since the start of 2024, it has lost almost 20,000 workers as jobs have dried up and investment has slowed.

Labour education spokesperson Willow-Jean Prime said the Government was to blame for some of those job losses, and described Monday’s announcement as “damage control”.

“Today’s announcement will be positive for those school communities who’ve been waiting for clarity on their projects. But let’s be clear: Christopher Luxon is desperately trying to make up for his disastrous decision to freeze $2 billion worth of school builds,” Prime said.

Last year, Stanford paused work on 20 building projects as she launched a ministerial inquiry into how the Ministry of Education prioritised and commissioned construction projects. She said that was the right decision. “Under the previous regime, they weren't properly prioritising projects,” Stanford said. She announced changes to focus on, in most instances, buying factory-built classrooms to make it cheaper to build and maintain schools. “We can get classrooms delivered very quickly, rather than having to wait five years and then realising that, ‘oh, the population's shifted’, and actually another school is now a higher priority,” she said.

This money wouldn’t fix every problem by the start of the new school year, Stanford admitted, but she did say it would mean issues would be fixed sooner. Small isolated schools would benefit the most, she added, through targeted funding to 934 regional schools that had been announced in previous budgets.

The Government planned to have this work under way over the summer holidays.