A modern, high-value economy

Michael Reddell Regional development

That is what Regional Development minister Shane Jones says Taranaki is “transitioning to”.

And yet of the $20 million of government giveaways (your money and mine) designed

to help future-proof the Taranaki region by diversifying its economy, creating additional jobs and leveraging off the strong base the region has established through its oil, gas and agricultural sectors.

$5 million is going towards earthquake-strengthening a rather attractive provincial Anglican church, recently raised in status to a cathedral (more cathedrals as there are fewer Anglicans), and $13.3 million is going to build walking tracks on Mt Egmont.

It has more of a feel of a museum –  built, and natural –  than building or enhancing a “modern, high value economy” (such things rarely being built –  or enhanced –  by governments splashing cash around).

Perhaps there is a good case for more walking tracks in Taranaki.  I’m not, in principle, opposed.  It is crown land, and needs managing.  Nonetheless, it is hard to think of any country that has got to the global productivity or income frontiers with an emphasis on tourism.

As for the church building, I like it and I’ve worshipped there.   But what about it makes the earthquake strengthening of a private building a matter for national taxpayers to support?   Again, perhaps at least there is an element of consistency –  better perhaps than a government prohibiting demolition and yet not putting any money in.   But how it is consistent with lifting the longer-term economic performance of the economy –  regional or national –  is quite beyond me.

Then again, this seems to be a government that on the one hand isn’t keen on oil and gas, or dairy –  the two biggest outward-focused industries in Taranaki – and on the other isn’t interested in doing anything serious about getting the real exchange rate down.  So perhaps the hope isn’t really that today’s package will do anything much of substance –  certainly not to lift medium-term regional economic performance – but perhaps it might placate the natives for a month or two?

 

24 thoughts on “A modern, high-value economy”

  1. There is a case for government funding of provincial churches that are simultaneously stuck under mandates to earthquake-strengthen and mandates to preserve a heritage amenity for the town. That makes quake strengthening even more expensive and gets rid of the church’s option to demolish and put up a more modern and safer facility.

    The better solution would be to do away with the current heritage restrictions and pay instead an annual subsidy for the heritage amenity provided, and re-evaluate that amount if the amenity changed with strengthening or demolition.

    But a pile of these small congregation churches are in a horrible position because of all this. Even when it doesn’t hit directly because of need to strengthen, it hits through insurance premiums because the repair costs after a quake (or other problem) for heritage-listed buildings are much higher.

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    • Thanks. Yes, I alluded to that second-best case for some public support, altho even then it seems to me the case is stronger for local authority support than for central govt (let alone money coming from a “provincial growth” fund).

      I’m never quite sure what to make of “heritage” claims when the people who actually built and used the building no longer value it. 200 yards from here a new housing development was held up for years to preserve a (rather lovely) chapel. which the Catholic church itself decided 35 years ago it had no use for

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  2. $20 million. Piffle. Pocket Fluff. A mere bagatelle.

    $40 million spent on a referendum for a flag. That produced a lasting memorial somewhere. A good example happened while the paparazzi were getting exercised over Clare Curran and other Wellingtoncentric issues. Dr Jacqeline Rowarth of the EPA, one of the government’s top scientists is talking up the benefits of irrigation. The National Government $400 million irrigation subsidy (now terminated) was a straight capital wealth transfer of taxpayer funds to the landed gentry in the guise of a production increase

    Rowarth reckons it increases the profitability of farmers which can then be used for killing rabbits.

    https://www.radionz.co.nz/news/environment/344878/epa-irrigation-views-bizarre

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  3. $20m here, $20m there and before you know it (the pledged) $3bn will be frittered away……

    (As far as I can see both sides of politics are about as bad as each other – the subsiidies and waste get directed in slightly different directions, and no one gets on with fixing the more fundamental econ problems (house and land prices, productivity etc)

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    • Fundamental problems: house & land prices are not an issue for say 95% of the land and 50% of the houses; it is all about location. Productivity is probably fine for half the employees in NZ pity about the rest because many of them work very hard.

      If there was a $3bn regional investment that promised high returns and low risk then the private sector would be doing it without government assistance. The purpose of this $3bn is to be frittered but away from Auckland where the government spends / fritters larger sums on accommodation allowances, student fees and City Rail Link.

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  4. Sort of suggests that there is not a lot to invest in Taranaki?? Maybe Taranaki is on top of its game and the picking for Govt slush funds are limited… or it is a basket case and there are more or less no good investments to be had outside of oil & gas and dairy…

    Bit of a worry really…

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  6. Ryan
    Is it true that most of the territorial authorities are already seeing population stagnation. They are
    not growing?

    Spoonley
    Yes absolutely, so we’ve really got some growth nodes which is Auckland, Wellington, Canterbury
    and Queenstown Lakes and Tauranga. And once we get out of that we are talking about population
    stagnation and increasingly in the next while we are seeing poulation decline. So the first region
    to see population decline is the West Coast of the South Island and within two or 3 years and
    basically within 5 years we are going to see two thirds of the regions experience population
    stagnation and half of those experiencing population decline. So the first region to see population
    decline is the West Coast of the South island and within two years and basicall within 5 years we
    are going to see 2/3 of our regions experience population stagnation and almost ½ of those
    experiencing population decline. And I think what we should do Katherine is acknowlege that we
    are coming to the end of population growth in societies like our own and we are going to see the
    country stagnating or most parts stagnating in terms of population growth and what is the
    government going to do about that?

    Ryan
    And this is driven by age demographics I presume. The baby boomer bulge is going to begin to move on. I don’t wish to be unkind.

    Spoonley
    Moving on I’m just trying think what you meant by that.

    Ryan
    Exactly what you think I meant. But moving on- first out of the workforce, then retirement and then
    gradually [laughter].

    Spoonley
    And I’ve been criticised recently for saying population growth is good and it is good for the simple
    reason in a NZ community which is aged over 65 the question you have to ask is ”where do the
    workers come from?” and what we have seen in many regionsis a big bite in the young adult
    population. Late teens early twenties who leave and never come back and that combined with a sub
    replacement fertility (a lowering fertility) which is going to mean that the younger cohort are going
    to be smaller than the over 65’s. So Taranaki last year became the first region to see more over 65’s
    than 0 to 14’s. That has implication for educationbut it also has implication for re-entry ratio. We
    want to see as many people entering the workforce as those exiting.
    So around 26,000 people reach 65 each year , not all of them retire many of them continue in the
    workforce but we need to see as many people entering the workforce as retiring. We have a problem.

    Ryan
    You mentioned that yo wanted to see the people policy so you had indicated about government
    priority but whe you talk about people policy what is it concerned with?

    Spoonley
    I think these policies which will keep people in the education system through to the moment that
    they enter employment and then seeing those pathways. So that’s why the regions young adults, even
    though they have NZCA They might even have tertiary qualification in the regions “where are the
    jobs?”. So you’ve got to think about those and the problem is you might want to bring in
    immigramnts or you might want to keep people over 65 in the workforce but at the bottom end of
    age group those people who leave for education into work , it stops them from getting a job that gets
    them upskilled and job ready.     That’s one thing . The government has signalled they are going to
    reduce the immigration flow and I don’t disagree with that but one of the questions for me is if you
    are going to dampen down Auckland’s growth and redistribute it particalarily immigrants or
    immigrant related growth, how are you going to distribute immigrants about New Zealand? I’m not sure what that looks like yet so far they haven’t got to thatr point.
    Symtomatic of decling services in some areas. Earlier this year I went to Kurowand I just did not
    appreciate(in homage to Richie McCaw) that they had closed four schools in the area and there’s
    one that remains so how do you keep thiose essential services going for the young, but also what
    sort of services do you put into the regions for older New Zealanders?
    https://www.radionz.co.nz/national/programmes/ninetonoon/audio/2018624208/preventing-regional-decline

    This is the only allowed narrative in the MSM. Cart before horse.

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  7. Ryan
    Is it true that most of the territorial authorities are already seeing population stagnation. They are not growing?

    Spoonley
    Yes absolutely, so we’ve really got some growth nodes which is Auckland, Wellington, Canterbury and Queenstown Lakes and Tauranga. And once we get out of that we are talking about population stagnation and increasingly in the next while we are seeing poulation decline. So the first region to see population decline is the West Coast of the South Island and within two or 3 years and basically within 5 years we are going to see two thirds of the regions experience population stagnation and half of those experiencing population decline. So the first region to see population decline is the West Coast of the South island and within two years and basicall within 5 years we are going to see 2/3 of our regions experience population stagnation and almost ½ of those experiencing population decline. And I think what we should do Katherine is acknowlege that we are coming to the end of population growth in societies like our own and we are going to see the country stagnating or most parts stagnating in terms of population growth and what is the
    government going to do about that?

    Ryan
    And this is driven by age demographics I presume. The baby boomer bulge is going to begin to move on. I don’t wish to be unkind.

    Spoonley
    Moving on I’m just trying think what you meant by that.

    Ryan
    Exactly what you think I meant. But moving on- first out of the workforce, then retirement and then gradually [laughter].

    Spoonley
    And I’ve been criticised recently for saying population growth is good and it is good for the simple reason in a NZ community which is aged over 65 the question you have to ask is ”where do the workers come from?” and what we have seen in many regionsis a big bite in the young adult population. Late teens early twenties who leave and never come back and that combined with a sub replacement fertility (a lowering fertility) which is going to mean that the younger cohort are going to be smaller than the over 65’s. So Taranaki last year became the first region to see more over 65’s than 0 to 14’s. That has implication for educationbut it also has implication for re-entry ratio. We want to see as many people entering the workforce as those exiting.So around 26,000 people reach 65 each year , not all of them retire many of them continue in the workforce but we need to see as many people entering the workforce as retiring. We have a problem.

    Ryan
    You mentioned that yo wanted to see the people policy so you had indicated about government priority but when you talk about people policy what is it concerned with?

    Spoonley
    I think these policies which will keep people in the education system through to the moment that they enter employment and then seeing those pathways. So that’s why the regions young adults, even though they have NZCA They might even have tertiary qualification in the regions “where are the jobs?”. So you’ve got to think about those and the problem is you might want to bring in immigramnts or you might want to keep people over 65 in the workforce but at the bottom end of age group those people who leave for education into work , it stops them from getting a job that getsthem upskilled and job ready. That’s one thing . The government has signalled they are going to reduce the immigration flow and I don’t disagree with that but one of the questions for me is if you are going to dampen down Auckland’s growth and redistribute it particalarily immigrants or immigrant related growth, how are you going to distribute immigrants about New Zealand? I’m not sure what that looks like yet so far they haven’t got to thatr point.
    Symtomatic of decling services in some areas. Earlier this year I went to Kurow and I just did not appreciate (in homage to Richie McCaw) that they had closed four schools in the area and there’s one that remains so how do you keep thiose essential services going for the young, but also what sort of services do you put into the regions for older New Zealanders?
    https://www.radionz.co.nz/national/programmes/ninetonoon/audio/2018624208/preventing-regional-decline

    This is the only allowed narrative in the MSM. Cart before horse.

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  8. An exploration of this topic reminds us of a 2006 study by the Australian Productivity Commission finding that “towards a higher value economy” the migrants capture all of the growth dividend

    Googling around on the search terms “productivity commission migrants capture” brought up everything on the topic with nothing from NZ except for an article from yourself that contains a number of areas that were forward looking that now deserve a follow up including OIA requests plus a proposed NZ Productivity Commission investigation that does not appear to have seen the light of day

    Croaking Cassandra July 2016
    https://croakingcassandra.com/2015/07/16/the-productivity-commission-looks-into-immigration/

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  9. I gather there is still some interest in some official circles in having our PC look at immigration. But those who favour such an inquiry need to convince the relevant ministers, since minister alone determine the inquiry topics the PC picks up.

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    • What we do know :-

      Migrants are piling into NZ at twice the rate of Australia

      Australia with half the rate of NZ were interested enough to assess what results their migration program was yielding

      On the other hand, NZ with the highest inbound migration rate in the world simply has no idea what results the program is yielding and apparently no desire to know. There is something very wrong with that

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      • 27% of Australia’s population are migrants compared to NZ at 26%. Hardly likely our intake rate is twice that of Australia. Likely because we count international students as migrants whereas Australia does not.

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