Embattled provinces look to regional fund
The tale of doom and gloom affecting many of New Zealand’s provinces features prominently in debates around the urban vs rural national spend. This week, small town New Zealand is due to find out just how much the Government values them when the regional development fund is announced on Friday. Teuila Fuatai reports.
Two weeks ago, New Zealand marked its lowest unemployment rate in nine years. The national average, announced by Stats NZ for the end of last year, was 4.5 percent - with cities like Auckland and Wellington coming in below average at 4.1 and 3.7 percent respectively.
But leaving the bustle of the big centres and moving to places like Gisborne/Hawke’s Bay, Taranaki and Northland, a different story emerges - with unwelcome, but not unexpected, above-average unemployment rates. At 6.4 and 5.6 percent respectively, the three North Island regions top the unemployment ladder in New Zealand.
On Friday, with Northland native Shane Jones, the Minister for Regional Economic Development and Infrastructure, due to announce details of his “$1-billion” regional economic development fund in Gisborne, many of those hoping for a slice of the pie will undoubtedly be considering how they can get in on the current boom in Auckland. So far, a few big numbers have been thrown around by Jones, including the planting of 100 million trees annually, a $500-million rail upgrade between Northland and Auckland, and a $150-million rail spur at Marsden Point. More definitive spending details and timeframes are expected in his Gisborne announcement.
It’s kind of a story of technological change that’s been concentrated in the big cities. That means that there’s going to be fewer job opportunities in the provinces.
Economist and author Shamubeel Eaqub says while Auckland’s economy growth is unlikely to be replicated in other parts of the country, the fund could, and should, prioritise projects that capture the readily-available “low-hanging fruit” from the city.
“Anything to do with regional development is really hard - it’s really hard to move the dial because you’re dealing with strong structural forces that can minimise that,” he says.
“When we take a big sweep of what’s been going on - it’s kind of a story of technological change that’s been concentrated in the big cities. That means that there’s going to be fewer job opportunities in the provinces.”
For places like Northland, a pragmatic approach centres around expanding the “geography of Auckland” to essentially include its northern neighbour, Eaqub says.
“The kind of economic growth we have now is very city focused, because it is about knowledge, it is about skills, and in the case of Auckland it’s also about a housing boom that’s been extraordinarily huge. We shouldn’t think we’re going to be able to mimic this in other parts of New Zealand because we say we want to.
“All the data that we have is that these economic trends have been diverging over a very long period of time, and more of the economic opportunities and more of the population is likely to be in the cities than in the provinces. Rather than trying to fight it, the easiest thing to do ... is try to expand the geography of Auckland to include these neighbouring regions - and infrastructure is a really good way of doing that.”
David Wilson, the chief executive of Northland’s regional economic development agency Northland Inc, agrees with Eaqub, and places significant emphasis on the need to upgrade the predominantly single-laned State Highway One north of Auckland.
“NorthPort and Marsden Maritime Holdings have large-tract, available industrial land behind the port. The port has plenty of room for expansion and would easily be able to service some of Auckland’s import needs, especially things like second-hand cars, but also large-bulk freight. However, the key to that is better roading infrastructure because State Highway One is just not up to it right now.”
Specifically, expanding to a four-lane State Highway One should be priority, Wilson says.
Eaqub also observes that while places like Tauranga and Hamilton have benefitted from Auckland’s strong growth, Whangarei and wider Northland seems to have missed out.
“Even though we’ve seen this very strong growth in Auckland, we haven’t seen it leak out to all the neighbouring regions. Some of it is likely to be because of transport links, but some of it is also the types of skills and education and trainings available in the [Northland] region - which can make it difficult to get connected to the Auckland economy. That’s where some of the current projects around infrastructure, rail, and around a new port - all of that is about taking away some of the stresses from Auckland, and turning it into a way of benefitting another part of New Zealand.”
Gisborne mayor Meng Foon, who is planning on attending Friday’s announcement, wants spending to be focused on roading upgrades in his region.
“Making sure that State Highway 35, 38 and Two - from Gisborne/Opitiki/Napier is resilient is essential. I also hope they will also look at the rail between Gisborne and Wairoa, and if they don’t fix that, I will be promoting a Gisborne airport to Napier airport rail trail [for bicycles] benefitting all the little towns, marae on the way.”
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