Council work valued at $126m
Taranaki’s councils should be spending more money, an economist says – but a new report shows the region’s biggest council is already a big player in the economy.
Cameron Bagrie, a former ANZ chief economist who now runs his own company, told Newshub that local governments – particularly in what he termed struggling regions like Taranaki – should take advantage of low interest rates and borrow money to invest in infrastructure.
He said Taranaki was a pretty wealthy region but their two ‘‘big economic engines’’ – oil and gas, and dairy – would be really struggling.
He also cited data that Taranaki had a 6 per cent unemployment rate at the September quarter. The national unemployment rate for September was 4.2 per cent.
‘‘It’s going to take a little bit of time for Taranaki to find plan B,’’ he said.
‘‘Central Government’s given a little bit of money, but it’s chump change.’’
Earlier this year, the Provincial Growth Fund allocated $19.7 million to help support Taranaki’s economy develop away from oil and gas.
Among the recipients were a $5m contribution for the restoration of the Taranaki Cathedral, and $13.3m to improve visitor facilities and walking tracks on Egmont National Park.
The Government also gave $27m for a new clean energy centre in Taranaki.
‘‘I think there’s a real role for the likes of New Plymouth City Council (sic) to get out there and spend a bit of money over the next two to three years to help stabilise the region, keep them on a straight footing.
‘‘It’s pretty tough in the political arena to spend money when times are tough, but that’s exactly the time you want the local authorities to get out there and spend money – when the private sector is struggling,’’ he told
Newshub.
However, a new report presented to New Plymouth District Council (NPDC) suggested for every $1 spent on core infrastructure, $1.65 is spent in the Taranaki economy.
Infrastructure manager David Langford told councillors at a meeting this week the report focused on two things: the economic impact of work being done – paying contractors, who paid their workers, who then spent the money – and also the ‘‘existence benefit’’ of infrastructure simply being there and allowing local economic activity.
‘‘This is the first time this type of analysis has been done,’’ he said.
Over the 10 years of the current Long-Term Plan this added value was equivalent to an annual average of $126.1m of GDP, which is only slightly behind the economic contribution of the forestry sector in the district, the report said.
NPDC’s core infrastructure spending directly and indirectly supports approximately 2 per cent of regional employment.
New Plymouth mayor Neil Holdom said the council did have a role to play in the economy and a leadership obligation, but it was a supporting role.
‘‘Councils do have a role to provide a kind of infrastructure that provides a platform for our economy,’’ he said. ‘‘Their job is to try and remove the barriers to economic growth and give businesses and investors certainty. ‘‘