National says $1 billion provincial fund is short. Shane Jones says they're wrong

Thursday, 28 June 2018

National say Shane Jones' $1 billion fund appears to have dropped to a $700 million fund.

A row has broken out over Shane Jones' $1 billion provincial fund.

National says it's been cut by a third, but Jones insists the Opposition has got its numbers wrong.

Through the Regional Development Provincial Growth Fund, the Government committed to investing $1 billion per annum over three years in regional economic development.

But National's Paul Goldsmith believes Jones' doesn't have anywhere near that much money to spend this year. He slammed Jones for backtracking on his promises, being 'deliberately tricky' and refusing to be held to account.

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

Established as part of the Labour-NZ First coalition arrangement, the $1b a year fund would 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.

Launched on February 23, it aimed to lift productivity in the provinces, enhance economic development opportunities, create jobs and help meet the country's climate change targets. Commitments had already been made in Northland, Tairāwhiti-East Coast, Hawke's Bay and Manawatū-Whanganui, as well as on the West Coast of the South Island with two Great Rides cycle trails to be built.

Analysis of Budget documents confirmed by the Ministry of Business, Innovation and Employment on Thursday showed $332 million, or a third, of this year's $1 billion would be spent next year or later, Goldsmith said.

He said Jones was back-tracking on his original plan, and had included the $245m forecast to be spent on the One Billion Trees programme in this year's budget despite that money being spent over 10 years. Jones planted the first tree in the One Billion Trees planting programme at a primary school in Tairāwhiti in April.

But Jones said his political opponent is wrong and has failed to understand the Public Finance Act.

'The information contained in the budget is very clear, we are committed to boosting the size of the forest sector, but by doing that we realise the trees we commit to planting over the next two winter seasons will not completely in the ground after the next election.'

Some of the money allocated will only be paid out as projects meet agreed milestones, and these milestones may not all be met within the 2018/19 financial year, he said.

'The forestry element is a national building programme, I'm astounded by the interest in the broader movement of planting trees, unfortunately it's determined by mother nature so to be prudent as part of the budgetary process we made the commitment to plant the trees, but the planting season is not concurrent with election season.

'A simple example is we need seeds and the nurseries are gearing up so the planting programme can grow into the future. The nurseries need the confidence we are committing funds for a native tree planting programme, that's sensible budget management.'

Budget documents showed that Finance Minister Grant Robertson had given him around $550 million to spend in the 2018/2019 financial year, on top of the $123m spent in the last financial year, Goldsmith said.

Goldsmith said it was 'highly unlikely' Jones would even spend the $550 million allocated to him if he required quality projects to secure the funding.

Individuals, non-government organisations, iwi, companies, and charities were all welcome to apply for backing from the cash pool.

Jones denied the claims and said the $1b would be committed, and confirmed by the end of the three years the money would be 'completely exhausted'.

But he couldn't guarantee 'when every cent will be spent because I'm not in control of the biological life-cycle of a tree'.

There is $536m of new operating funding and $148m of existing operating funding reprioritised. Combined with new capital funding of $236m and existing capital funding of $80m reprioritised, this equals $1b, he said.

However, Goldsmith claimed that was all a facade.

'The Minister must come clean on the fact that this billion-dollar fund is nothing of the sort.'

The Taxpayers' Union described the fund earlier 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.'

But Jones said 'Parliament's 'twerker' is just wetting his political whistle'.

'The fund already has a level of interest that outstrips a billion dollars, naturally not all of these applications will be accepted by the officials.

'The build up in applications shows the pent up pressure and degree of neglect that the provinces are intending remedy from this fund.'

This article has been updated to include comment from Shane Jones disputing National's claims.