Why is reform needed for the Public Works Act 1981?

Making it easier to build critical infrastructure is the Government’s aim in reviewing the Public Works Act 1981 (PWA), with proposed amendments progressing through Cabinet since late 2024.

Land Information Minister Chris Penk announced in February 2025, the Act’s “most significant reform in nearly 50 years to help unleash an infrastructure boom” as the regulatory framework is no longer fit for purpose.

“Removing barriers to make it faster and more affordable to build the homes Kiwis need, creating jobs through new projects and providing infrastructure to support better public services is a major part of the Government’s economic growth agenda,” Mr Penk says.

The PWA provides powers to enable land to be acquired for delivering public works, such as roads, schools, defence works, justice facilities, and water services. There is a range of users with different powers under the PWA.

Local authority entities (for example, councils, universities and Fire and Emergency New Zealand) and the Land Information Minister have direct access to the PWA. The Minister exercises these powers to acquire land for the Crown, primarily for agencies such as the NZ Transport Agency Waka Kotahi (NZTA) and the Ministry of Education (MoE).

The PWA sets out processes for how land is acquired, compensated for, and disposed of when no longer required for public works. The processes for acquiring land encourage reaching an acquisition by agreement and consist of negotiations and issuing notices. If necessary, land can be compulsorily acquired by proclamation of the Governor-General on the Minister’s recommendation.

The PWA also allows landowners to raise objections with the Environment Court before compulsory acquisition and guarantees full compensation, on the principle that landowners should be no better or worse off following an acquisition.

Landowners may settle issues regarding compensation through the Land Valuation Tribunal. When land is no longer needed for public works, the Crown or local authorities must offer the land back to its former owners or their successors, unless exceptions apply.

In the last 25 years, the Crown has acquired over 7,500 interests in land under the PWA, over 95 per cent of which were by agreement.  In the last five years, there have been 79 compulsory acquisitions, 14 for the Crown (13 for the NZTA, and one for the MoE) and 65 for local authorities.

Mr Penk calls into question these complex regulations and inefficient processes because they slow down development, and can result in blown-out budgets and added costs for taxpayers.

“A targeted review last year has found unnecessary duplication in the system, issues with outdated negotiation processes and disjointed government agency practices.

“Right now, it takes up to a year on average to acquire land. If compulsory acquisition is required, the process generally takes up to two years, with at least another year tacked on if objections to the Environment Court are made. We cannot afford this in the face of a productivity crisis and critical infrastructure deficit. A modernised Public Works Act will set the foundation for building better.”

Infrastructure New Zealand Policy Director Michelle McCormick CMILT agrees that the current legislation leads to grossly inefficient and costly processes.

“These inefficient processes are born from what is out-of-date legislation and need to be remedied if we want to achieve an uplift in infrastructure development in New Zealand. The Public Works Act is a critical piece of the puzzle, and we welcome the progress the Government has made to reform it so far.

“The changes proposed go further than what was indicated by the review panel, which demonstrates the Government has listened to the sector’s feedback and broadened the scope of its reforms,” says Ms McCormick.

“Currently, there is significant duplication between the Public Works Act and the Resource Management Act. This leads to significant project delays and greatly increases the cost of developing critical public infrastructure.

“Providing the mechanism for government agencies to work together to acquire land and enabling the relocation of existing infrastructure through land acquisition are pretty basic functions that I think most New Zealanders would expect from modern empowering legislation. Currently, there is no provision for these things.

“If we want New Zealand to succeed in the 21st century and continue to provide economic and social opportunities to our people, we need to make it far easier to build the infrastructure we need. Reform of the Public Works Act is another small but important step in that direction.”

The first tranche of changes will:

• Delegate land acquisition responsibility: Empower government agencies like the New Zealand Transport Agency, which regularly use the Public Works Act, to enter into acquisition agreements with landowners. The Minister for Land Information will remain responsible for compulsory acquisition by the Crown.
• Enable collaboration between agencies: Allow government agencies to work together when acquiring land for connected public projects. Instead of each agency acquiring land separately, they will be able to coordinate the acquisition of land as needed to make the process smoother.
• Enable relocation of infrastructure: Allow both the government and local authorities to acquire land when they need to move existing infrastructure (like powerlines or pipes) that are in the way of new public works.
• Refine the role of the Environment Court: Clarify the factors that the Environment Court can consider when reviewing objections to land acquisitions for public works, with a renewed focus on individual property rights, removing overlap with the Resource Management Act.
• Require mediation for compensation disputes: Require that parties try to resolve disputes over compensation through mediation or alternative dispute resolution before going to the Land Valuation Tribunal, to avoid lengthy court proceedings where possible.
• Allow Transpower to bypass standard processes: Enable Transpower, the State-Owned Enterprise managing New Zealand’s power grid, to use the Public Works Act to acquire land by agreement. This would streamline their process for building energy infrastructure.