The Provincial Growth Fund
In 2018, the New Zealand government created the Provincial Growth Fund (PGF), allocating $3 billion to Kānoa – Regional Economic Development & Investment Unit to invest in the economies of our regions.
[Opening music with scenic shot of mountains and a harbour]
Ngahiwi Tomoana (Chair, Ngati Kahungunu Ini Inc): The provinces have hidden gems that haven't been discovered yet. Unless we evolve and develop, New Zealand will never reach its true potential.
[Scene showing a car driving down a town's main road]
[A man inspects a piece of machinery in a factory]
[Scene showing a bustling small town's main street]
Brett Cottle (CEO, Vertigo Technologies Ltd, Westport): People sometimes forget how much talent there really is in provincial New Zealand. People in regional towns feel like they've been forgotten a little bit and all we want is a little bit of support and help from central government.
[Scene showing woman serving a customer, holding a pot plant]
Jaime Harrison (Founder, Haumanu Urban Farm, Kerikeri): It's definitely been challenging trying to start a business in Northland. I felt a bit isolated and like there wasn't as much resources and help for me as there might be in a bigger city.
[Woman spraying plants]
[Auckland city harbour view then fading to a birds eye view of a province]
Kevin Stratful (West Coast Economic Development Manager, Greymouth): The cities have got their place in the world but certainly the provinces are the places where most of the people in New Zealand would ideally like to live, and the only way we can do that is to make sure that the provinces grow and as a result of that the lifestyles of our children and the youth will just be amazing.
[Man jogging on a golden sandy beach]
[A child climbing up a tree]
[Close up of two little children outside in the sunshine]
[Bird’s eye view of a sunny day in Hawke’s Bay]
[Two people strolling along a main road]
Grace Tahu, (Hawke’s Bay resident and mum): Sunny Hawke's Bay - who wouldn't love it? I grew up here; I'd love my kids to grow up here. I want to teach my kids that if you apply yourself to stuff you are gonna get achievements.
Shayne Walker (General Manager, Maungaharuru-Tangitu Trust, Hawke’s Bay): We've never seen a regional collaboration at this level so it does present the opportunity for all of our collective will and minds to come together to solve some of the broad challenges.
[Shows Shayne strolling along and looking at a wharf]
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[Bird’s eye view of a large wharf]
[Waves lapping on a rugged coastline]
[A man drilling in a factory]
Wayne Jack (CE, Napier City Council): The future is looking extremely bright for the provinces across New Zealand. The Provincial Growth Fund is really going to help those regions to unlock the potential that they've had sitting there waiting whilst we've had a focus on the major centres such as Auckland and Wellington which are really restricted in their ability to grow.
[A bird’s eye view of boats on the water]
[A small town’s main street]
Di Maxwell (Chair, Far North Resilient Communities Charitable Trust, Kaikohe): The regions are the guts, the kidneys, the lungs, of the whole country and the cities are the brains and you know just like in a body we all need each other.
[A bird’s eye view of a forest plantation]
Jimmy Croft (Forestry supervisor and ex-WINZ client, Kaikohe): Forestry is a strong industry here in Northland, but at times there's not enough backing to help uplift and upskill the youth.
[An aerial view of Kaikohe.]
Di Maxwell: We tend to forget that we were once a very strong region and we can be that again if people are given confidence.
[A bustling small town’s main street]
[Di talking to a client in an office setting]
Francois Tumahai (Chair, Te Runanga o Ngati Waewae, West Coast): I see with what's happening here on the coast in terms of technology as a key for our Rangatahi. Offering them opportunities to stay here and work and not leave to chase the big city lights.
[Aerial view of Francois standing surveying the view]
[A highway showing vehicles travelling over a newly built bridge]
Andrew Robb (Chair, West Coast Regional Council): Some of the opportunities for this province that have probably been lacking, are really robust infrastructure that can help the resilience of the businesses that are here, and also attract new businesses.
Alasdair MacLeod (Chair, Napier Port): I'd love us to continue to grow the economy without sacrificing the things that make New Zealand in general, fabulous.
[Alasdair is shown looking at a scenic view of Napier Port]
[People walking down a street chatting and laughing]
[Bird’s eye view of a regional area with clouds drifting by]
Jimmy Croft: There are a lot of good people in the communities all around New Zealand that want to make a difference and want to get out and help.
Our country’s economy is built on the successes of our regions and their communities. Tourism, forestry and primary industries continue to lead New Zealand’s export economy, while the regions are home to some of our most creative and innovative people. However, each region faces different economic challenges and opportunities depending on a range of factors including the businesses and industries already established and operating there.
Through the PGF, the government seeks to ensure that people living all over New Zealand can reach their full potential by helping build a regional economy that is sustainable, inclusive and productive.
The PGF is administered by Kānoa – Regional Economic Development & Investment Unit, part of the Ministry of Business, Innovation and Employment.
The PGF's objectives were to:
- Create jobs, leading to sustainable economic growth
- Increase social inclusion and participation
- Enable Māori to realise aspirations in all aspects of the economy
- Encourage environmental sustainability and help New Zealand meet climate change commitments alongside the productive use of land, water and other resources
- Improve resilience, particularly of critical infrastructure, and diversify our economy
The Provincial Growth Fund reset
In May 2020, $640 million was repurposed from the Provincial Growth Fund (PGF) to help regional New Zealand recover from the economic impact of the COVID-19 pandemic. The funding provided opportunities to support worker redeployment and regional skills and training, improve and enable infrastructure and support capital investments, joint ventures and Māori and Pasifika businesses.
In addition to the original objectives of the Provincial Growth Fund, 3 additional objectives were created for the Provincial Growth Fund reset. The new objectives acted as decision-making criteria to prioritise projects that had:
- an increased focus on immediate job creation and income growth
- construction activity that was to be underway within the following 6 months
- a high degree of visibility to the community to give the public confidence that renewed economic activity was underway.
How did the Provincial Growth Fund reset perform?
A key purpose of the Provincial Growth Fund reset was to get people in to work, which was successfully achieved, creating 4,270 jobs across 700 approved projects. These jobs provided certainty of employment through the period of high economic uncertainty during COVID-19.
Kānoa worked well to prepare timely advice for Cabinet and Regional Economic Development (RED) Ministers to repurpose funding from Provincial Growth Fund projects to the Provincial Growth Fund reset. This work was successfully completed in about 6 weeks.
Kānoa data shows 95% of the Provincial Growth Fund reset projects began within 6 months of approval. This compares to 82% of non-reset Provincial Growth Fund projects.
BERL impact studies
In 2023, 2 BERL impact studies, which included the Provincial Growth Fund reset, were completed for Kānoa funded projects. These 2 impact studies covered Te Tai Tokerau and the manufacturing-engineering sector and will be released on the Grow Regions website this month.
The BERL impact studies show positive economic impacts:
- Without Kānoa funding, it was estimated from BERL’s research that 99% of the funded work in manufacturing-engineering sector projects would not have happened. In other words, virtually all, or $79.1 million of the total $79.5 million funding managed by Kānoa in manufacturing-engineering sector projects resulted in expenditure that would not have occurred without that funding.
For Te Tai Tokerau, BERL conducted interviews with locals who provided the following feedback:
- Many interviewees said projects created a growing sense of pride in the region, particularly in small communities, enabling young people to stay and whānau to return home.
- Some projects delivered great cultural benefits, that were not directly financial, and so unlikely to secure funding without Kānoa.
- Resilience was improved by investments in riverbank reinforcement, roads, pavements, and water storage.
- Kānoa became the enabler for reforesting riparian areas, and cleaning up and fencing waterways, which promoted the environmental wellbeing of local communities.
Status of Provincial Growth Fund Appropriations and Funds Committed to date by Agencies
The PGF reports on the status of appropriations bi-annually.