Regional Development - Once sleeping, now woke?
19 July 2019
It is reality of our small country that many of us city dwellers, even those now residing in hip city suburbs, originally hark from regional New Zealand. In my case, while living in Auckland, the little mining town of Reefton on the West Coast is my hometown. Many others will have similar backgrounds. These many and varied ties to a provincial life leave a widespread affinity for the fate of provincial New Zealand and a recognition that these communities are the well-spring of many of the unique qualities that makes Kiwis 'Kiwi'.
The regions have been doing it tough for decades now. Rogernomics’ rapid privatisation, the hollowing New Zealand manufacturing, the Pied Piper of tertiary education calling louder to provincial youth and urbanisation more generally have afflicted the regions. While the main urban centres, and particularly Auckland, find crafting infrastructure investment business cases easy, the regions struggle to make the benefit/cost numbers work and get left behind. The West Coast along with Gisborne, Hawkes Bay, Tasman, Manawatu-Wanganui and Northland have GDP per capita rates that are roughly 75% of the national average.
It is therefore encouraging to see the sustained efforts of central and local government to push against this tide. The Provincial Growth Fund (PGF) is central government’s most obvious initiative, springing from New Zealand First’s coalition agreement with Labour. Ever since New Zealand First secured the Regional Economic Development portfolio and NZ$3b fund, Minister Shane Jones has been zig-zagging the country pumping money into regionally based projects.
Clearly the PGF is savvy politics for New Zealand First. Does it hope this largesse will buy it at least 5% of the vote come next year’s general election? However, given the move to wellbeing budgets and in an international climate of angst about how the spoils of globalism are shared, it also seems remarkably prescient. It is harder and harder to deny that rusted-on economic underperformance means provincial Kiwis’ well-being is starkly worse than their city cousins. Consequently, being at the vanguard of the fight against postcode inequity seems to capture the zeitgeist.
Further down our constitutional batting order, sweating regional deprivation is local government’s meat and drink. However beyond its usual advocacy for more funding, it has also started a bolder conversation about the devolution of power from central to local government, or as it is branded 'localism'. This concept as initially presented by Local Government New Zealand (LGNZ) at its just completed annual conference, is hard to argue with. This is mainly because its specifics were not outlined by LGNZ. It is just wanting to start a conversation see here.
The New Zealand Initiative, who are supporters of LGNZ’s proposal, have though previously provided more substance to the concept. It has suggested it could include regionally distinct regulatory zones and the decentralisation of funding streams. Something akin to special economic zones seen internationally. Specifically, there has been suggestions of regionally bespoke Resource Management Act (RMA) regimes and regional allocation of some GST revenue. Overseas, where this concept is borrowed from, localism has also manifested in differential tax rates for identified areas. Underpinning these regulatory manifestations, is a mantra of community empowerment, and through that building community pride and well-being.
While interesting in its ambition one wonders how real this regulatory and funding localism is. Even if theoretically possible, GST reallocation would seem unlikely given the PGF’s redistribution function. The suggested changes to the RMA also do not seem to reflect the current realities. Despite implications to the contrary the RMA is decidedly not a regulatory framework which yells central control. Rather it creates a general framework for District and Regional Plans. This geographic variability has been widely criticised by the development community and considered its fatal flaw.
Further, because the RMA mandates local decision-makers there is already a marked level of regional variation in how it is applied at first instance by local authorities. Anyone advancing a mining proposal on the West Coast will see a very different response from its council than if the same proposal was pursued on say Waiheke Island.
To be fair while these regional variations already exist at a local or regional level, for controversial proposals in sensitive environments, the RMA imposes something approaching national bottom lines. While it would be an intriguing idea to give the regional decision-makers carte blanche to bend these core environmental standards that seems like a long-shot under this Government. After all we have a Prime Minister who has made climate change her nuclear-free issue (as Taranaki knows too well), and an Ex-Forest & Bird field officer, Eugene Sage, as our Minister of Conservation.
Perhaps then expecting major regulatory and revenue devolution will save the day is a bit of a stretch. However, that doesn’t mean the idea is without merit. An underlying principle of localism is recognising the value of small communities pulling together to direct their own destiny. If one ventures beyond city limits and takes time to look there are more green shoots of community (re)building than one would imagine.
Circling back to my home-town, Reefton, I certainly see that. A few years ago, it was a town in inexorable decline and with diminishing hope. Today it has its beating heart back. The energy and daring of a few remarkable locals taking the bull by the horns, occasionally helped along with small amounts of local economic development seed-money, has restored hope. Shameless plug alert, please visit and see for yourself. This shows me that perhaps the best localism comes from locals themselves. Equally, it certainly can’t hurt if we all remember regional New Zealand is New Zealand too and bear that in mind during discussions about addressing inequity.
Pat Mulligan is a partner RMA/Local Government Partner based in Buddle Findlay’s Auckland office. He is also a Trustee of Development West Coast, a regional development trust, whose purpose includes promoting sustainable employment economic benefits for the West Coast Region.