Tuesday, 31 March 2015

1 April 2015

As a country we have never really got the hang of regional development. Labour-led governments have generally been in favour of it, without quite understanding what “it” is, using it instead as an opportunity to pork-barrel popular local projects. National-led governments have been inherently more suspicious (except during by-election campaigns) fearing that it might lead to a form of centralised planning. Relatively frequent changes of government have meant that nothing much ever really happens.

Every now and then regional and local government step into the breach, but they often have less idea than their central government counterparts. Local government-led regional development is like a modern version of the cargo cult – expensive projects developed at ratepayers’ expense in the often vain hope something may turn up.

In Wellington, we currently have two classic examples of this thinking. Our port company wants to dredge deeper harbour channels to make it possible for larger container ships to come into Wellington Harbour, despite the facts their existing wharf capacity is far from fully utilised, and there is no evidence larger ships will want to call here anyway. The driver seems to be more a case of Auckland and Tauranga being able to handle such ships, so Wellington feels it should too, even though Auckland and Tauranga are our major import and export ports.

And then there is the case of extending the airport’s runway which the City Council seems ready to commit hundreds of millions of dollars towards to make Wellington more attractive to long-haul flights, at the very time when the numbers of long-haul flights into and out of airports other than Auckland are being wound back. (In fact, Air New Zealand’s decision to cancel its Christchurch/Tokyo direct service leaves only one long-haul service – Christchurch to Singapore – remaining, outside of Auckland. How Wellington intends to break that trend remains a mystery.)

Regional development is not about a wish-list of regional nice-to-haves, but about ensuring that each region can do to maximum effect the things it is best at. In Wellington’s case, the “Creative Capital” best sums up our capabilities, which are the strengths we should be playing to, around the film production and associated services industries. It will be different things in other parts of the country. Our near neighbour, Marlborough, is at the heart of our food and wine industries, responsible for around 80% of our wine production. Other regions have their own distinctives. Those in turn will drive the growth and development of regional infrastructure, not the other way round.

In short, we need to trust our regions to develop their own opportunities, rather than decide them for them. But then we have to be prepared to back their decisions. A couple of years ago, Hawkes Bay decided to market itself and its produce to the world as GE Free, only to be stopped by the government on the grounds we marketed ourselves as brand New Zealand, not a series of competing brands within it.

Fair enough, up to a point, but it is a dangerous assumption that one size fits all, the capital knows best, and New Zealand – longer than the length of Europe – is all the same from its north to south. While that thinking prevails, no wonder we do not “get” regional development, and why offering during a by-election to build ten new bridges in Northland is seen as an answer to regional economic woes.     








1 comment:

  1. Agree 100% that regions know best what they can or should pursue, but Govt can help or hinder, and incentives matter.
    What about letting regions keep a % of the GST revenue generated in their region if the region achieve business growth above a certain baseline level? What about letting the regions keep a portion of any mineral royalties generated in their region? (Alaskans pay no state income tax and in fact get a check from the State govt every year from State oil royalties).
    That would motivate councils to help business ideas and opportunities, rather than strangle them with red tape, and help support the costs the councils incur in reviewing opportunities.
    And the additional revenues could be used to reduce rates rather than build a bigger council.
    You would need a Mayoral and Councillor recall mechanism to them in line and remove spendthrifts.
    If central Govt in NZ really wants to improve the regions, and it should, it needs to help local govt be more motivated to support, approve and even identify and court business opportunities.