Taranaki economy hurt hardest
Taranaki’s economy was the hardest hit in the country during the first year of Covid-19, new figures show.
Between March 2020 and March 2021, the region’s Gross Domestic Product (GDP) fell 5.8 per cent when compared with the year before, Stats NZ said.
GDP is a measure of how well an economy is performing. The higher the GDP, the larger the economy.
‘‘Taranaki’s decrease was mostly driven by its largest industry, oil and gas production, which was affected by lower global prices for energy products and reduced operations,’’ Stats NZ industry and production senior manager Ruvani Ratnayake said.
The only other region to show a fall was Otago, which declined 2.2 per cent.
Nationally, New Zealand experienced a 0.8 per cent GDP increase over the same period.
New Plymouth mayor Neil Holdom said Covid-19 disruption had been felt across virtually every sector.
‘‘Which is why we’re encouraging those who do have disposable income to get out and buy local, eat local and stay local to support businesses and workers.
‘‘Taranaki is consistently one of the strongest provincial economies and will bounce back once the Covid-19 restrictions lift.’’
Holdom said the Government needed to open up the borders to allow Taranaki to bring in skilled people for businesses which are ‘‘struggling due to a lack of people’’.
He also believed there is a case for additional government support for Taranaki’s hardesthit businesses.
‘‘[We] would like to see the minister of finance recognise the significant contribution we make to NZ Inc by providing more support to business and to economic development.
‘‘We are also aware the Government has talked a lot about a just transition to a lower carbon future and supporting Taranaki’s long-term economic prospects, but despite putting $13 million into last year’s budget it appears it’s all going on bureaucracy as just $180,000 has been committed to Taranaki, which is somewhat disappointing.’’
Justine Gilliland, chief executive of economic development agency Venture Taranaki, said she saw the fall as a ‘‘one off, not a long-term trend’’.
Gas pipelines that went offstream last year contributed to the drop, she said, but many of Taranaki’s other industries, such as food, were doing very well despite high input costs.
‘‘It is important that we have a diverse range of productive industries. However, looking forward to 2050, we still want to be the energy province of New Zealand.’’
The region’s per capita income (the total GDP divided by population) also took a hit.
In the year ended March 2020, Taranaki had the second-highest per capita income in the country with $75,874 per person – just behind Wellington.
But in the year ended March 2021, Taranaki’s per capita income dropped to $70,626, allowing Auckland, with a GDP per capita of $70,952, to sail past and into second place for the first time since the Stats NZ series began in 2000.
Taranaki’s GDP per capita was the lowest it had been since the year ending March 2017, although it was still above the national average of $63,955.
John Carnegie, chief executive of Energy Resources Aotearoa, which represents the wider energy resources sector, said the results were disappointing but not surprising.
They had seen companies move to more accommodating countries following the Government’s 2018 decision to stop issuing new permits for offshore oil and gas exploration.
An Energy Resources Aotearoa report commissioned after the ban showed the Taranaki economy would lose around $40 billion by 2050, he said.
‘‘I hate to say it, but this is coming to pass.’’
Carnegie said it wasn’t all doom and gloom – but the figures showed the importance of a just transition away from fossil fuels.
While oil and gas prices are up, he could not say how that would affect the region’s current GDP as the industries work on a range of ‘‘complex factors’’.