Provincial Growth Fund about getting 'good PR' - economist

Opinion 28/02/2019

An economist says the Government is using the Provincial Growth Fund (PGF) to boost its support, rather than regional economies.

"The whole purpose of the PGF so far has been to get good PR," Shamubeel Eaqub told The AM Show on Thursday.

"We haven't seen the big stuff yet. If you were in the Government, or particularly New Zealand First, you'd do all the big stuff in the last year ahead of the election. This is politics."

The PGF is headed by NZ First MP Shane Jones, who says so far it's created more than 500 jobs, a "damn good start" - while admitting only a fraction of the money has been spent.

Mr Eaqub says it could be doing a lot more if rather than spreading the spending, Mr Jones concentrated on a few key projects - like beefing up Northland's transport links with Auckland. 

"The transport and infrastructure links [are] really what's going to unleash Northland."

But that won't happen, he says, because many people south of the Bombays don't care about what happens in the north - and the Government knows this, so is reluctant to spend-up big in one region.

"That means a little bit sprinkled over everywhere, rather than big chunks of money on those few key projects that will really turn the dial," says Mr Eaqub.

As a result, Whangarei feels a lot further away than Hamilton or Tauranga, despite similar distances.

"Auckland's screaming to let some of the steam out, but we're not able to vent."

The latest spending from the PGF is $8.2 million that'll go on projects in Northland, more than half of it on the Kupe Waka Centre in Aurere. Other money will go towards a sports club in Kaitaia, and investigations into the feasibility of water storage and barge projects.

"We haven't done economic development in New Zealand for decades, so there is no capability to actually know what kinds of things a region needs," said Mr Eaqub. "We kind of started that under [former Economic Development Minister Steven] Joyce... but they never went far enough to go, 'So what are the projects we'll actually fund?'"

Mr Eaqub's comments come two days after a report from the Maxim Institute warned Mr Jones against spending too much, too fast.

"We can't afford to waste $3 billion that we could have spent on teachers' salaries or hospital upgrades," said CEO Alex Penk, brother of National MP Chris Penk.

"If we don't want this to end up being remembered like Muldoon's Think Big, the Government needs to make some changes while there's still time."