Provincial Growth Fund winners and losers: Where is the funding going?

Friday, 26 July 2019

Regional economic development minister Shane Jones has been fronting a $2 billion coalition government promise to 'turbocharge our infrastructure' in regional New Zealand - but some provinces feel like they haven't seen their share.

Under the Provincial Growth Fund, there's been $40 million to upgrade to the TranzAlpine service to the West Coast, $30m on Hawke's Bay water projects, and $18.5m on water storage in Northland.

Early on, the coalition government identified 'surge regions' which were areas requiring a higher level of investment to unlock their full economic potential. On the list are Tai Tokerau/Northland, Bay of Plenty, Tairāwhiti/East Coast, Hawke's Bay, Manawatū-Whanganui and West Coast.

Northland and West Coast have so far each received upwards of $130 million. But others, like Wairarapa and Otago have seen only a fraction of that amount.

**READ MORE:

* Growth fund ruckus: Waikato 'left with scraps', says MP

* Wairarapa water storage project gets $800,000 boost from Provincial Growth Fund

* Collective 'failure' by TDC puts potential PGF funding in doubt for Te Tau Ihu

* $82m slated for regional employment initiative from Provincial Growth Fund**

Jones said though the  fund was not exclusively targeting surge regions it would be fair to say they have received 'a substantial amount of fiscal attention'.

He said through visiting various regions he had become more aware of their immediate needs which were 'threatening their viability'.

'I hadn't fully appreciated how neglected a lot of our regional infrastructure had become. I thoroughly agree we need to, in the regions, turbocharge our infrastructure.

'The Provincial Growth Fund in that context has given a lot of optimism.'

Whangarei Mayor Sheryl Mai said funding for particular projects was 'incredibly welcomed' and had contributed to a sense of optimism in her region.

Other northern districts such as Kaipara and the Far North had also benefited early on from the PGF support.

'It has been desperately needed and welcomed by the region.'

Other provinces have not been so fortunate.

Waitaki MP Jacqui Dean of the National Party said the Otago region was one that missed out and it was unfair.

'It would be a mistake to think the Otago region didn't have economic development opportunities that could be, and should be, supported in the same way as they have been for other regions.'

She noted that most of $4m committed to the region under the PGF was for a cycle trail which had already been identified for development.

Many local mayors, initially excited by the prospect of the PGF assistance, were now disappointed.

'It has been indicated to them that they should not expect too much out of the fund, which I think is a huge shame.'

Wairarapa MP Alastair Scott of the National Party described the fund as 'a waste of taxpayers' money' and his electorate has been hard done by in only receiving around $2m in total.

'Accountability is just lacking. You've got a minister who has his favourites … favourite areas, favourite groups of people, favourite types of projects.'

He said he told Wairarapa's mayors early on that there wouldn't be much money for their districts.

'Here we are 18 months on, there are disappointed regions, there are disappointed councils and disappointed projects that think they deserve money above another project.'

Jones said it wasn't true to say some areas had been overlooked. 'I don't think it is constructive for MPs to diss other areas.'

Some regions showed 'a higher level of ardour' in getting PGF applications completed and that may be reflected in what programmes had been approved, he said.

Regional Economic Development parliamentary undersecretary Fletcher Tabuteau said he accepted that there would be areas which felt they had not got their share.

'I'm sure that people will think that they're missing out and that will be a reality for some areas but you have to come back to why the fund was created.

'That was identifying those areas that were most at need with really high deprivation statistics, high unemployment and non engagement. What are we going to do to make a difference around jobs, productivity and unlocking future growth.'

The PGF was not a 'big pot of money' for politicians to dole out at a whim or for the regional economic development minister's favourites, he said.

'He's been a huge driving force of getting this up and running as quickly as it has, but let's be clear what the criteria is: at no stage in the decision making process does the minister himself have the final say on any decisions.'

Some areas were a natural fit for early funding such as Northland which had an economic development agency 'engaged from day one', Tabuteau said.

'When the PGF came out they were ready to go. They were a great example of what can be done by a region efficiently and effectively and so they have got a lot of money.'

Tabuteau said the selection criteria for projects was not driven by politicians. 'None of this comes from Wellington. It comes from the local community and local leadership.'

The Government was now moving away from the big infrastructure investment allocation and were shifting focus to 'sector-based investments'. 

These will be targeted at 'priority and high value commercial sector opportunities' that will build off other PGF investments in regional capability and infrastructure.

Tabuteau said much of the money that will be handed out from now will be loans.

'If it's a commercial venture then a lot of that funding will be through loans so they have to pay it back.'

Announced funding as at May 31, 2019

Tai Tokerau – $135.23m

Waikato – $7.72m

Bay of Plenty – $108.5m

Tairāwhiti –$169m

Hawke's Bay – $16.23m (a further $50m was announced in recent weeks)

Taranaki – $24.94m

Manawātu/Whanganui – $75.49m

Te Tau Ihu/Top of South – $13.7m

West Coast – $146.6m

Canterbury –$ 54.77m

Otago – $4.47m

Chatham Islands – $0.098m

Southland – $24.38m