How we made decisions
Applications were open to all individuals, non-government organisations, iwi, and charities as well as New Zealand companies, including those that are foreign-owned for investment into the New Zealand economy.
The PDU assessed applications against the Provincial Growth Fund (PGF), Te Ara Mahi (TAM) Whenua Māori, He Poutama Rangatahi (HPR), or Regional Apprenticeships Initiative (RAI) criteria and investment principles, working with other government agencies where appropriate.
Assessed proposals were presented at meetings of the relevant decision makers where feedback and a decision on each proposal was recorded in the minutes of each meeting and coversheets presented for each project were individually signed. When individual Ministers were unable to attend meetings in person signatures were collected via email.
PGF proposals were required 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 helping New Zealand meet climate change commitments alongside the productive use of land, water and other resources
- improve resilience, particularly of critical infrastructure, and by diversifying our economy
- lift the productivity of a region or regions
- create additional value and avoid duplicating existing efforts
- have a link to the regional priorities and be supported by stakeholders, and
- be well managed, well-governed and have appropriate trade-offs between risk and reward.
Whenua Māori proposals were required to:
- involve Māori freehold land or general title land owned by Māori.
- come from small to medium Māori landholdings that require investment of financial capital to unlock and realise latent potential. PGF loans may look for alternative security rather than requiring applicants to offer their land as collateral.
- be valued at below $10 million.
The PDU worked with the Ministry for Primary Industries and Te Puni Kōkiri to support Māori landowners develop investment ready applications.
TAM proposals were required to:
- focus on any aspect of the pathway to employment for people in the regions. This includes tailored support for people to become work-ready, gain and sustain employment; and to support those who are underemployed and could upskill.
- focus on employers who may need support, coordination or connections, to employ local people into local jobs.
- focus on any age group within the working age population. If your project/activity focuses solely on people aged 15-24, please consider HPR funding instead.
- target any regions except the Auckland, Wellington and Christchurch metropolitan areas.
HPR proposals were required to:
- identify rangatahi who were most in need of individualised employment support, could assess and prioritise what support they need to get ready for employment opportunities, and could draw rangatahi into active participation in a work-readiness programme.
- provide intensive, individualised support for rangatahi, both while participating in the programme and once in employment.
- understand the needs of local employers and what foundation skills are critical for the jobs they have available, so that work readiness preparation is purposefully matched to this.
- understand how to navigate and access the specialist services rangatahi often need to be able to sustain employment.
- have a history of delivery.
- have effective management and governance systems, demonstrate strong project management, awareness of and planning for risk management, and an understanding of commercial realities.
- build and maintain strong networks with local employers, so as to facilitate connections between rangatahi and local employers, and support them forming enduring employment relationships.
- work collaboratively with others in the community to improve employment outcomes for rangatahi.
- specifically target rangatahi aged 15-24 who are most at risk of long-term unemployment.
The RAI didn't cover:
- pre-trades training
- Level Two and Three qualifications
- Level Four qualifications not equivalent to an apprenticeship, i.e. less than 120 credits
- existing apprentices
- employers based in Auckland, Wellington, or Christchurch
Priority was given to people working in the primary, construction, manufacturing, engineering, and wood processing sectors. Priority was also given to:
- people who lost work due to COVID-19
- Māori and Pasifika, including existing employees who wanted to transition into an apprenticeship
- people who undertook pre-trade training and were unable to progress into an apprenticeship, and
- others who would benefit from undertaking an apprenticeship.
Who made decisions?
- Cabinet had oversight of the Provincial Growth Fund, and made decisions about investments of $20 million or more
- Regional economic development (RED) Ministers were those with a portfolio which related to our goals. They made decisions about investments between $1 million and $20 million. Other ministers were consulted when a decision related to their portfolio. Executives from the relevant ministries and government agencies also attended the meetings. The wider group was made up of the ministers for: Finance, Regional Economic Development, Economic Development, Transport and Trade and Export Growth.
- Senior regional officials (SROs) made decisions about investments of below $1 million. The SRO model played a vital role in regional economic development and helped ensure investments are strategic, region-led and take a strong partnership approach.
- The Independent Advisory Panel (IAP) provided independent advice to Ministers on Provincial Growth Fund investment proposals, and supported our work to build a balanced and coherent portfolio of investments. Panel members had skills in commercial, industry, public policy, and sector-specific knowledge where relevant. They gave feedback on applications for large sector projects, lend their commercial expertise to help assess business cases, and offer advice on the overall investment portfolio. Media release: Inaugural meeting of Independent Advisory Panel, 13 February 2018
- The Head of the PDU who had delegation to decline proposals which clearly do not meet the criteria of the PGF.
The PDU publishes papers from meetings of decision-makers to the MBIE document library.
About these documents
We are committed to sharing information about funding applications and our decision-making processes. We also need to be able to protect applicants' interests, and our own ability to negotiate, so some of these documents have been redacted.
Information is accurate as at the date/time the document was produced. Information is subject to change as new information is received, which may occur following production and before public release.
Funding was offered primarily as grants, loans or equity deals. The right form of funding depended on whether it was commercial or non-commercial, and the likely outcomes of the project. The treatment for each of these instruments was:
- Grants - non-commercial projects in general were funded through grants. Feasibility studies – projects that will help define and scope future, larger projects – are also likely to be funded via grants.
- Loans - Loans were the preferred method of funding commercial projects (noting there may be some extra caveats for transport projects). Loans were made available to projects on suitable and agreed terms.
- Equity - In some circumstances, we were able to take an equity position (part-ownership) in a project. Usually, this occurred where the project could not support further debt, or where there was sufficient extra return from the project which the Government should benefit from.
Provincial Growth Fund (PGF) loans
Why does the PGF give businesses loans?
- The PGF aimed to unlock potential in regional New Zealand and businesses are a key source of economic growth.
- We assessed the merits of every application and importantly, considered a range of public benefits, which commercial banks typically don’t need to.
- Public benefits included the contribution to regional economic growth, job creation, skills development and the improvement of cultural and social indicators.
- We worked with applicants and their commercial lenders, particularly where we could help accelerate a project, or bring a long-planned project to fruition.
What interest is charged on PGF loans?
- The terms of the loans, including interest rate and tenure, were arranged between the successful applicant and the Crown.
- Interest rates on loans, much like home mortgage terms, varied throughout the term and also therefore, between projects depending on the industry, value and estimated length of the project.
Will details of loans be publicly released?
- The Provincial Development Unit works with the Office of the Ombudsman to ensure that our approach to releasing information is timely and appropriate.
- Withholding commercially sensitive information during negotiations is standard practice. It is important to protect the Crown’s negotiating position to ensure public money is being spent wisely.
- Once contracts are executed and sensitivity around commercial details has reduced, we will proactively release more information. Specific loan terms however will be deemed commercially sensitive and will not be released.
Will the loans be repaid back to the Provincial Growth Fund?
Yes, loans are structured so interest and principal are repaid to the PGF.
Published: 5 November, 2020 · Updated: 25 March, 2021