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Summary
- The New Zealand government replaced Provincial Growth Fund with a smaller fund.
- The fund will provide seed funding for regional projects.
- The process would help regions to conquer long-standing issues.
The New Zealand Government is taking ahead its plans of replacing the $3-billion Provincial Growth Fund, which helped in boosting regional growth with a smaller fund.
PGF was a significant achievement of NZ First and regional development minister Shane Jones.
On 27 May, Economic and Regional Development Minister Stuart Nash declared in an annual conference that the government was launching the new Regional Strategic Partnership Fund, which would deliver on its earlier pledge to support regional economic growth and would be a crucial part of post-coronavirus recovery attempts.
Source: © Skypixel|Megapixl.com
Labour had promised last year that it would put an end to PGF if it won the second term with a $200 million Regional Strategic Partnership Fund (RSPF). The smaller fund was promised to be a more focused evolution of PGF by the government.
The financing is one-fifth of what the PGF received. The new fund would establish regional economic development plans to specify where the PGF's residual unallocated funds should be spent, as well as collaborating with regional development agencies to determine where the government’s future investment should be directed.
RSPF would have 3 goals in this Parliamentary term. It will work in local partnerships to:
- Enable economic and business development
- Accelerate Māori economic aspirations
- Support sector transformation
RSPF requirements and targets
To recognise priorities and co-funding opportunities, the federal government will work with local governments, iwi, companies, community organisations, and other authorities.
Nash stated that regions would select priority investments, which promoted the Government's objective of making regional economies more productive, resilient, inclusive, sustainable, and Maori-enabling.
The fund's $200 million will be used as the seed money for regional priorities, with further financing determined on a case-by-case basis, as per Nash. Year 1 funding has been put aside in Budget 2021 from reprioritised funding governed by the Provincial Development Unit (PDU). Further, PDU will change its name to signify its new mission. Knoa, or the Regional Economic Development and Investment Unit, will be its name.
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Commercial investments are likely to get a 50% co-contribution, while other projects will receive a 20% co-contribution. Commercial initiatives will be funded mostly through loans and equity deals, although non-commercial organisations will be considered for grants.
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To qualify, projects must be situated in regional New Zealand and correspond with the Government's and regional economic development goals. Nash stated that the investments would be deliberately intended to open up a variety of additional sources of finance in order to get initiatives off the ground.
Nash predicted that the method would help the areas overcome persistent challenges and impediments that had previously kept them back.
