Executive Summary
2. In August 2006, Cabinet agreed to refresh the framework for regional policy. The government's goal for refreshed regional policy is to improve the quality of the regional business environment to support the development, attraction and retention of globally competitive firms. This ensures that regional policy is clearly aligned with the government's economic transformation agenda. This paper sets out how the existing regional policy and the Regional Partnership Programme (RPP) will be reshaped around the achievement of the goal.
3. To assist with the transition from the current 26 regional groupings to about 14, it is proposed that existing RPP regions be offered up to $0.05m to meet one-off costs directly caused by the aggregation of RPP regions and the establishment of the associated governance structures.
4. The RPP provided for funding for regional economic development strategy development and for capability building. It is proposed that this funding be reshaped as the Enterprising Regions fund. This funding will similarly focus on encouraging regions to develop robust regional economic development strategies and to undertake activities arising out of their strategies. It is proposed that $0.75m be available to regions over a three year period, with flexibility in accessing this funding. This funding will encourage regions to take a longer term perspective, and to take a productivity based approach to improving the quality of the regional business environment to support the development, attraction and retention of globally competitive firms.
5. It is proposed that Major Regional Initiative (MRI) funding be reshaped as the Enterprising Partnerships Fund. This fund will be available for regionally based projects that are commercially driven, generate substantial economic benefits for the region, and align with national goals and priorities.
6. The Enterprising Partnerships Fund will be a contestable fund, with funding decisions made by Cabinet. Projects to be funded will be selected based on their merits relative to other projects, as well as their ability to contribute to both regional and national economic outcomes. It is proposed that up to two funding rounds be held per year. The total amount of funding available per year will vary subject to the other commitments outlined in this paper, and will be approximately $9m in 2007/2008, $10.5m in 2008/2009 and 2009/2010, and $11.5m in 2010/2011 and outyears.
7. Recognising that Auckland's regional economic development is a key part of government's economic transformation agenda, it is proposed that $1m per annum be ring fenced for activities in Auckland that reinforce the linkages between Auckland's economic transformation and regional economic development.
8. Given the small scale of the Chatham Islands, but also recognising that the principles of regional economic development will be relevant to their needs, it is proposed that $0.15m over three years be available for strategic planning and implementation.
9. This paper also proposes a number of work items designed to support the refreshed approach to regional economic development. These will be undertaken collaboratively, including Local Government New Zealand (LGNZ) and the Economic Development Association of New Zealand (EDANZ), and will be reported to the Minister of Industry and Regional Development by 14 December 2007. These are:
- Communicating national goals and priorities. This will help build the economic development capability of regions by ensuring that they have access to the best information for developing strategies and identifying and exploiting economic opportunities. It also helps ensure that regional activity is aligned with the achievement of national economic goals.
- Stocktake of current central government activity at the regional level that affects the regional business environment. This will provide useful information to regions, and from a central government perspective, will provide information on whether there are any gaps, overlaps or inconsistencies that need to be addressed or managed.
- Regional Coordination Models. There are currently a range of different models in place for coordinating central government input into regional economic development processes. There will be significant value in analysing the different models to determine what works and what doesn't work in different circumstances, as well as capturing some of the learnings and experiences from implementing and working with different models.
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