Bulk of PGF jobs from one project

Government forced on defensive over the $3 billion fund and how much employment it has so far created

The vast majority of the jobs expected to be created as a result of Provincial Growth Fund (PGF) announcements so far will come from just one relatively small project.

This comes as the Government has been forced on the defensive over the $3 billion fund and how many jobs it has so far created.

National’s Paul Goldsmith pointed out that only 54 jobs had been created from funded PGF projects so far.

This was despite Regional Economic Development Minister Shane Jones telling Parliament late last year that 9000 had been created.

Numbers published on the Ministry of Business, Innovation and Employment (MBIE)’s website show more than 10,000 jobs are expected to be created as a result of PGF announcements made last year.

Of that, 7000 — almost 70 per cent — are estimated to come from just one project: Eastern Bay of Plenty Regional Development Project Implementation.

This project was allocated just under $240,000 for “funding a position to manage and report on 65 key economic development projects”.

That 7000 jobs estimate is based on a feasibility study provided to the Provincial Development Unit,¯which oversees the PGF, by the Opo¯tiki District Council.

A spokesman for the unit said funding a feasibility study helps to refine the scale and scope of projects so job creation is able to be estimated with “greater precision”.

But Goldsmith said it doesn’t take a rocket scientist to understand that a feasibility study into a potential project is not the same as creating real jobs. “It is frankly insulting that Shane Jones expects New Zealanders to believe that one project costing just $237,000 for someone to investigate the viability of a long list of potential projects will create 7000 jobs — or 70 per cent of what MBIE are claiming will be created.”

The 10,000 figure includes jobs which are expected to be created as a result of PGF spending, as well as jobs created as an indirect result of the fund.

The data does not include all of the PGF announcements, such as the almost $200 million for supporting Ma¯ori land owners and boosting employment in the regions, announced last week.

It was compiled as a response to written questions throughout much of last year and, as such, does not provide a real-time update of job creation numbers.

A spokesman said the number of jobs which had been created, and were expected to be created, was “constantly being updated”.

Although the data revealed the expected job numbers, it was not able to provide expected job creation numbers on most of the projects at the time the information was released online. This is because many of them are still in development and job numbers have not yet been finalised.

As well as this, many of the projects — such as the $9m Waipapa Intersection Improvement — would create no jobs, according to the data.

The day after Goldsmith said just 54 PGF jobs had been created, the Provincial Development Unit issued a press release which said “job creation does not happen overnight” and that more than 10,000 jobs may be created as a result of all the PGF investment approved to date.

Speaking to the Herald, the head of the Provincial Development Unit Robert Pigou said the statement was only released to provide “clarity” around how the PGF was structured.

He said he was not able to say how many jobs had been created because of the PGF last year, as he “did not have that detailed information yet” but said it would be higher than 54.

The 10,000 jobs expectation is based on the estimates of the PGF project applicants, a Provincial Development Unit spokesman said.

“When applicants outline their project, they include an estimate of the number of jobs to be created both directly through the project and indirectly, as a result of the investment.”

For larger-scale projects, such as the $40m to expand the TranzAlpine service, financial modelling by an independent economic firm has been used.