Regions begin to lobby minister for cash from new $1 billion a year provincial fund

Wednesday, 25 October 2017

New Regional Economic Development Minister Shane Jones is already getting calls asking for money from a new $1 billion a year fund.

Shane Jones is already getting phone calls from regional figures across New Zealand lobbying for money from a new provincial development fund.

But the fund is so light on detail that the new Government has not even decided which parts of New Zealand will qualify or be excluded.

Established as part of the Labour-NZ First coalition arrangement, the $1 billion a year 'Regional Development (Provincial Growth) Fund' will cover the capital cost of planting 100 million trees a year, make 'significant' investment in regional rail and commission a feasibility study of options for moving the Ports of Auckland.

Beyond that, nothing has been said apart from that it will fund other 'large scale capital projects'.

Jones, named on Wednesday as the new Regional Economic Development Minister, said people from across the country had already begun calling him.

'There's already been a host of requests on my cellphone from regional airports and a variety of other things,' he said.

The projects were ones the backers believed 'would unleash more economic activity if they had a foundation, I guess, injection of capital from the Crown'.

Jones revealed that outgoing Finance Minister Steven Joyce had warned him during coalition negotiations to 'be very careful about how far whatever fund can be agreed to can stretch because there's no shortage of projects or application'.

'There's an infinite level of projects. We all heard about them over the last nine years and this is a robust step forward [but] I don't want to say this is going to satisfy every project from the four winds of Aotearoa.'

What is provincial?

Details still to be established about the fund include what exactly qualifies as provincial. Jones said he considered Whangarei to be provincial, as well as Northland, while NZ First deputy leader 'Ron Mark has already reminded me that as far as he's concerned, the Wairarapa is a province'.

But he declined to comment on whether areas such as Dunedin, Nelson or Kāpiti might qualify.

'Out of respect to the new Prime Minister-elect [Jacinda Ardern], she will want the Cabinet to make a call, if there is to be one, where the demarcation is,' Jones said.

'There are areas of egregious neglect, throughout the provinces. They have announced themselves. They sought some relief from the former government. This is a new government.'

The nature of politics

Opponents have already warned the new fund would create pork-barrel politics, with regional leaders using political influence to win funding for projects.

Jones said he had told those calling him for funding to 'taihoa' (wait) while Carolyn Tremain, chief executive of the Ministry of Business, Innovation and Employment had already called him to discuss the fund

He was adamant the process to allocate funding would be rigorous and subject to Cabinet approval.

'I'm a politician, you've got to expect people to try their hand and get in contact with politicians…That's just the nature of politics, but these projects will meet a higher threshold.'

An appointed group, potentially drawn from those working across the public and private sector, could be appointed to consider applications.

'There's got to be a rebalancing between the established processes of our professional bureaucratic advisors and those who maybe live in the mixed economy, a bit of private [sector] and a bit of public [sector], and they'll find I'm a pretty easy guy to work with.'

'Slush fund'

The Taxpayers' Union has described the fund as a 'recipe for pork-barrelling', the practice of spending money in a particular place primarily to win political favour in that area.

ACT leader David Seymour said the fund was 'basically a slush fund that has no real purpose or methodology for allocating resources, other than the belief that the regions need more resources.'

While people might criticise KiwiRail or the New Zealand Transport Agency, those organisation had methodology for deciding which road to fund or which rail project to approve.

'We're going to forgo real signals of consumer demand for signals of political favour.'