Planning to take the right risks for our regions
New Zealand’s Regional Development Minister Shane Jones has a problem. He has three billion dollars and three years to change the regional narrative of the country. But how do you fight forces like globalisation, urbanisation, an ageing population, and 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 policy. And as Shane Jones knows, this is all “a bloody big risk.”
Finding solutions may involve risk, but the status quo for many places is no less perilous. In March, Grey District mayor Tony Kokshoorn shared an all too common lament: “When I grew up in Greymouth the entire Mawhera Quay had shops and hotels all the way down…It was a busy vibrant town,” he said. But when the timber yards and the coal mines began closing in the 1960s the West Coast went through a 35-year recession. He added, “I’ve spent my whole life watching the economy go down and down and down…”
What will it actually take to give our struggling regions a fighting chance?
Whether we like to talk about it or not, Greymouth and many places like it are facing population stagnation and decline. 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. Some places have used policy and public spending to kickstart a particular industry that they hope to become known for, like tourism, or IT. Others have used the building of cultural or sporting facilities as a way of rebranding and attracting young creative types. Many ideas that seem new and exciting to us, have been tried to 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.
There are no drag and drop solutions that are guaranteed to be successful
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? In places like Greymouth, we shouldn’t just focus on growth, because not every place is going to become a bustling metropolis.
The evidence suggests that finding the right risks to take in New Zealand’s regions will require time and communication
But population decline doesn’t have to mean the end. International experience shows that a smaller town can be better if local leaders use smart decline policy. They can create density by prioritising a condensed town plan, use rezoning to allow mixed-use buildings and help in the demolition of disused property and create something new.
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 three year term, but if we rush and spend this $3 billion poorly we run the risk of leaving the regions worse off and make us unhelpfully risk-averse to spatial policy in the future. This would be a lost opportunity and a poor legacy.