Biggest provincial boost in decades

Dr David Wilson

COLUMN

The new $1 billion per annum Provincial Growth Fund (PGF) is a giant leap forward for provincial New Zealand.

You don’t have to be a rocket scientist to have seen the increasing gap between the haves and have-nots in this country, and in many cases between rural and urban New Zealand.

Internationally many nations are struggling to find ways to create an environment where the tide rises for all regions. Governments are responding to globalisation and urbanisation, and dealing with the associated pressures on provinces and rural regions. However, by actively focusing on addressing infrastructure deficits and building on regional strengths these trends can be addressed, and — as in New Zealand’s case where rural regions are already highly productive — create opportunities to leverage investment and create jobs.

The $3 billion fund is the largest injection of central government funding into provincial New Zealand in decades and has the potential, if strategically applied, to generate “inclusive growth” across the country. However, a stronger partnership between central government and regional stakeholders is needed.

New Zealand’s regional economic development agencies (RDAs) provide a network of agencies capable of delivering for the PGF. They can provide the catalyst and glue to bring parties together at the regional level to focus and deliver on key projects. They have the local reach, networks, capability and influence to get projects across the line.

Historically what they have lacked, particularly in the provinces, is the scale of resources and associated capacity to make the difference regional stakeholders aspire to.

RDA funding traditionally comes from local councils. Like local government, RDAs have continually been asked to do more with less, and while this may impose a good discipline to be lean, it does not represent what is needed, and is not aligned well enough with central government’s strategic objectives.

A major component of what is needed for the PGF to be effective is the need to give respective regions some headroom to prioritise and implement projects.

I encourage local government to see the PGF as a regional economic development tool that goes beyond local infrastructure deficits, to be utilised to shape the future of their economy, leverage investment and create prosperity, inclusive growth and jobs.

The continued investment in economic development by local councils is crucial to the future of our regions, so is central government investment, alongside business, Maori and the community.

We are optimistic that this Government has recognised the unique value of RDAs and is keen to support and collaborate with the network to build inclusive growth across New Zealand. That optimism has been reinforced by central government’s willingness to participate in an EDNZ initiative that aims to create greater alignment and collaboration between regional and central agencies.

The challenge is how best to align those efforts and resources towards a common agenda which builds inclusive growth.

The new $1 billion per annum Provincial Growth Fund (PGF) is a giant leap forward for provincial New Zealand.

You don’t have to be a rocket scientist to have seen the increasing gap between the haves and have-nots in this country, and in many cases between rural and urban New Zealand.

Internationally many nations are struggling to find ways to create an environment where the tide rises for all regions. Governments are responding to globalisation and urbanisation, and dealing with the associated pressures on provinces and rural regions. However, by actively focusing on addressing infrastructure deficits and building on regional strengths these trends can be addressed, and — as in New Zealand’s case where rural regions are already highly productive — create opportunities to leverage investment and create jobs.

The $3 billion fund is the largest injection of central government funding into provincial New Zealand in decades and has the potential, if strategically applied, to generate “inclusive growth” across the country. However, a stronger partnership between central government and regional stakeholders is needed.

New Zealand’s regional economic development agencies (RDAs) provide a network of agencies capable of delivering for the PGF. They can provide the catalyst and glue to bring parties together at the regional level to focus and deliver on key projects. They have the local reach, networks, capability and influence to get projects across the line.

Historically what they have lacked, particularly in the provinces, is the scale of resources and associated capacity to make the difference regional stakeholders aspire to.

RDA funding traditionally comes from local councils. Like local government, RDAs have continually been asked to do more with less, and while this may impose a good discipline to be lean, it does not represent what is needed, and is not aligned well enough with central government’s strategic objectives.

A major component of what is needed for the PGF to be effective is the need to give respective regions some headroom to prioritise and implement projects.

I encourage local government to see the PGF as a regional economic development tool that goes beyond local infrastructure deficits, to be utilised to shape the future of their economy, leverage investment and create prosperity, inclusive growth and jobs.

The continued investment in economic development by local councils is crucial to the future of our regions, so is central government investment, alongside business, Maori and the community.

We are optimistic that this Government has recognised the unique value of RDAs and is keen to support and collaborate with the network to build inclusive growth across New Zealand. That optimism has been reinforced by central government’s willingness to participate in an EDNZ initiative that aims to create greater alignment and collaboration between regional and central agencies.

The challenge is how best to align those efforts and resources towards a common agenda which builds inclusive growth.

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Richard - 1 month ago
Quote: "I encourage local government to see the PGF as a regional economic development tool that goes beyond local infrastructure deficits, to be utilised to shape the future of their economy, leverage investment and create prosperity, inclusive growth and jobs."

That, Dr. Wilson, the GDC, The Mayor and all other parties and Ney-sayers - is exactly what the reopening of the railway to Gisborne will do. Reopen, reconnect and revitalise the region's economy. The train can deliver skilled jobs, its impact in the community is inclusive, the wider local economy will benefit, as will the nation's treasury.

As has been proven across the globe, railways require central governments to take the investment lead and in Gisborne's case, with PDF seed capital. Then it's for local councils to back that commitment with their funding. With that partnership you'll have created a conducive risk environment for private investors to match, and as experience demonstrates, possibly exceed the initial public launch funding.

In Ecuador it took only US$4.5m from central government to kick start the railway rebuild programme. A catalyst that generated interest from other investors (domestic and international) that amounted to over US$208m over the following six years. The success of that initiative is there for all to see and enjoy. And for the economists, the benefits and rewards have also been balance sheet validated. If Ecuador can do it, surely New Zealand can do it.

Dr. Wilson - stop weaving dissertations - stop evading commitment - sponsor the funding.

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