Why is infrastructure so expensive in NZ? - Wed 2 Sep

0:00Right, it is time for business thanks to our partners Fawceney Far. Let's go to Katy Bradford who joins us live this morning. Katy, good morning. Good morning. I'm still in shock from that story. I know, right. And there's someone who watches a lot of True Crime documentaries and podcasts. You know that's coming to the podcast. So there is, that's the business we should be in. It's those True Crime podcasts. You're right, Katy. There'll be a Netflix documentary about that. Oh, absolutely. I just finished watching Interwell. What about stuff in the UK? Very similar to that. Anyway, I'm pleased you didn't point at me when we were talking about lazy co-workers, though. No, don't worry. They're over there. Hey, let's talk about the markets. I know, I know how hard those guys will be. The markets looking. The markets are probably a bit lazy. The market markets are gloomy and quiet. That oil strikes that you just talked about. That oil price up. Look at that. Over 4% again. Creeping up towards $100 again. 94 bucks for a Brent Crude. Not so good. The US markets were all down overnight as well. Again, off the back of those strikes, people feeling very nervous.

1:01And just really, I feel like we've been here so many times before. And here in New Zealand, everyone's waiting really on that Reserve Bank decision on the OCR. You've talked about that already this morning, our dollar down. And markets also down about 0.9%. As we wait to see where the Reserve Bank lifts the official cash rate by 0.25% as is expected. All right. Infrastructure commissions come out where they report this morning. What are they saying? The report's called making every dollar count, which I think is something we will big fans of. And it's basically looking at what makes infrastructure projects so expensive in New Zealand. We spend a lot of money on infrastructure here. We don't get good value for money. We don't get bang for our buck. Why is that? There's the obvious things, you know, construction materials go up. They go high. They're expensive for us here. Comparatively to other countries, labor costs are low though. We've got cheap workers. And then there's other things that are global factors. Again, oil price and so forth. And then there's a lot of great things. Interesting thing here, what this report sees is it's about scope and design and getting an early on those, getting those right, and that will help keep costs down.

2:05We saw quite a lot of controversy around an interview I did earlier this year with Sean Sweeney about the city, Rowling project, and which he identified that right as the former CEO of the project. He said, hey, if we'd got an earlier round scope and design, we could have saved a hell of a lot of money on a project that blew out to $5.5 billion. Some in the industry criticized him. And some people are not that happy with some of the comments he made around that. But this report seems to be backing some of that up. It's saying, hey, we need to get in, we need to standardise projects. We need to do some of the obvious things. And actually, sequence projects where a standardised plan better, and we might bring some of those costs down. All seem so easy, doesn't it? Yeah, we can do that. Anything very much. Right, other thing I want to mention to you this morning is global deritrade auction. We have had numbers overnight. The auction thankfully has not fallen through the floor as someone worrying it might. It is basically steady up 0.9%. The stuff we really care about, the skim milk powder is up 0.5% overnight. Whole milk powder basically flat down 0.1. Cheddar down 6.6 butter, down 0.8 mozzarella up 0.3.

3:08So basically flat two. That has seen so now four auctions either up or flat. And remember, we were seeing the dips back in June and July. The time is 18 minutes away from 8. Thanks to my partner's full site bar, of course.