Planning the right risks
Regional Development Minister Shane Jones has a problem. He has $3 billion and three years to change the regional narrative of the country. But how do you fight forces like globalisation, urbanisation, an ageing population, low fertility rates and climate change? What will it actually take to give our struggling regions a fighting chance? Increasingly the world over is turning toward the use of policy that is tailored to local problems rather than one size fits all.
Whether we like to talk about it or not, many towns and regions are facing population stagnation or decline in the coming decades. Thankfully, New Zealand is not alone in the quest to revitalise struggling places. All over the world a range of regional growth-focused development tools have been tried. From R&D grants and tax credits to incentivising skilled migration and funding regional infrastructure projects like roads, railways, and bridges; many ideas that seem new and exciting to us have been tried, with varying degrees of success, in places around the world.
After researching a huge number of these growth-focused initiatives, we have found that Shane Jones was right to say investing in ideas to grow our regions is “a bloody big risk.” Each idea has its own history of success and failure, and a list of drawbacks, be it high costs, the inability to scale-up, the creation of dependencies on government money, or, as in the case of building roads, simply making it easier for people to leave. There are no drag-and-drop solutions we can find overseas that are guaranteed to be successful, but we can plan better to minimise the risk of failure.
And here the literature shouts volumes. It says that before we start funding initiatives, we have to be very clear in what we’re setting out to achieve. Are we prioritising growing the local economy, or do we want to make the town a better place to live for the current residents? What about improving connectivity between towns within the region? We can’t just focus on growth, because not every place can become a bustling metropolis.
But population decline doesn’t have to mean the end. International experience shows that a smaller town can be better if local leaders plan well for it, ahead of time.
All of this means that the real problem facing Shane Jones at the moment is not the amount of money, it’s really the timeframe. The evidence suggests that finding the right risks to take in New Zealand’s regions will require time and communication between all levels of community and government. This may strike against the political urgency of a threeyear term, but if we rush and spend this $3 billion poorly we run the risk of leaving the regions worse off, making us unhelpfully risk-averse to spatial policy in the future. This would be a lost opportunity and a poor legacy.
" The evidence suggests that finding the right risks to take in New Zealand’s regions will require time and communication between all levels of community and government."