Public spending evenly spread


A snapshot of government funding by regions shows public spending is evenly spread across the country.

Finance Minister Bill English and Economic Development Minister Steven Joyce today released the Regional Government Expenditure Report jointly commissioned by Treasury and the Ministry of Business, Innovation and Employment and undertaken by NZIER.

The report to 30 June 2012 provides estimates of central government spending (operational and capital) in each of New Zealand’s 16 regions. The estimates are based on a direct expenditure approach and a measure based on services. The expenditure approach assigns spending to a region according to where money is spent and the service approach assigns expenditure according to the region for which a government service is provided.

Key findings include:

  • Using the expenditure method, in the year to June 2012 the Government spent $78,020 million, 92 per cent of which was operating expenditure
  • Wellington had the highest per capita operating expenditure ($22,297) and capital expenditure per capita ($2,184) because it is the capital and headquarters of many of the government’s core functions such as policy advice that supports services across New Zealand
  • Canterbury’s per capita share of expenditure is above average due, in large part, to increased spending following the September 2010 and February 2011 earthquakes
  • Using the services method, Otago had the highest capital expenditure per person ($1,993; page 7 of the report) and Gisborne the highest operating expenditure per person ($19,578; page 6 of the report).

Table 1 Core Crown Spending by region

Table 1 Core Crown Spending by region

“The development of all of New Zealand’s regions is hugely important to the Government and the national economy. This report shows the Government is investing in all our regions helping to support families, business growth, jobs and higher incomes,” Mr English says.

“The report will be a useful tool to monitor changes over time alongside the Regional Economic Activity Report and Statistics New Zealand’s Regional GDP update, which have both been released in the last four months.”

Mr Joyce says the report covers all Government expenditure, everything from building roads and hospitals, to social welfare payments, education and research and development.

“The results in the expenditure report show that regional expenditure broadly reflects the size of the population in each region,” Mr Joyce says.

“Small variations in Government spending across regions reflect their different demographics and characteristics. Regions with higher numbers of older people tend to have higher superannuation and health expenditure; areas with lower unemployment tend to have less social welfare spending.

“The Government remains committed to strengthening investment in all our regions helping them achieve their potential and boosting jobs and quality of life for all New Zealand families.”

The full report is here.

The ODT is running a Stand Up Otago campaign, with the support of southern mayors, largely predicated on the belief the south isn’t getting its fair share.

This reports shows that isn’t the case and spending is evenly spread across the country and pretty closely related to the population.

Dunedin mayor not standing up for jobs


Dunedin mayor Dave Cull has been one of the leaders behind the Stand Up Otago campaign.

It was sparked by AgResearch’s proposal to shift most of its scientists from Invermay Research Centre.

Cull has said that the Christchurch rebuild is coming at the cost of tool little to other regions and the government should be doing more to protect and create jobs in other areas.

It’s all very easy to look to central government, but local government has at least as important a role to play in making a city and province attractive to businesses.

It also needs to be open to a range of opportunities, one of those is oil exploration and Cull opposes that.

. . . Mr Cull told the Otago Daily Times he was against continuing the hunt for fossil fuels – including off Dunedin’s coast – when the world was already heating up.

That was because of the threat of climate change globally, and also the risk of an environmental catastrophe locally, he said. . .

Unless he’s doing everything he can as an individual and mayor to reduce reliance on fossil fuels this is nothing more than NIMBYism.

Taranaki illustrates the economic and social benefits to be gained from oil extraction which have come without causing any problems to the province’s environment. There’s potential for similarly positive spin-offs for Dunedin’s and wider Otago.

It’s no good asking the government to stand up for the province when the mayor will turn his back on an opportunity that could boost business in the way mineral exploration and extraction could.



Standing up for ourselves


The ODT’s Stand Up Otago campaign was sparked by the announcement of major jobs losses at Invermay Agricultural Research Centre.

Those who joined the campaign seemed to be looking to government to help Dunedin and the province.

But a recent editorial, correctly, looks beyond government for growth:

. . . The Government needs to know the anger and outrage in Dunedin as it abandons the city in these areas. The Government needs to play its part in Dunedin’s future.

Nevertheless, the retention of such jobs is but one part of economic development and Dunedin’s future. At the next level, the mayor and the council need to be accountable for their part.

It is fine for the council to point to its economic development unit and its work to convince Wellington politicians about government and quasi-government jobs. But just how supportive of business is the council from top to bottom?

Through planning, building permits, transport planning, rates and so on, is the council in fact business friendly?

Does what it provides impress possible immigrants to Dunedin? Does it and the city generally project the attitudes and produce the goods that make Dunedin an attractive place in which to live. The council must ”stand up” for the city.

What, too, about the attitudes of business people, workers and residents in the South? Do we really want, in matters both large and small, to be efficient, effective and positive?

Is our customer service, as has been claimed, at best mediocre?

Would a new business really want to set up here when the attitudes around it are slack and making progress is much harder that it should be? Would residents want to live here because we are friendly, vibrant, proud, helpful?

Do high standards flow through our hospitals and in our schools? Can we show the rest of the country we are superior in what we do and how we do it? Business and residents must ”stand up” for the city.

Dunedin has many inherent advantages, not least of which are relatively high education standards and relatively low numbers of social problems.

It has an intellectual, social, sporting and cultural life well beyond what might be expected in a small city. We also have companies blazing trails and quietly doing the business. This all needs to be built on and fostered.

Although we do not expect the Government wrongfully to strip away jobs, Dunedin as a community fundamentally has much of its future in our own hands.

The raw fact is that, in an intensely competitive world, Dunedin has to ”stand up” for itself.

We are all responsible for growth.

Government has  a part to play but that should be a small part in comparison to our own efforts.

Government should create the environment for growth but it doesn’t create jobs. Those come from businesses and they’re much more likely to grow in places which are vibrant and welcoming and with a culture that celebrates enterprise and success.

Oyster farming secret cracked


Bluff Oyster Co says it’s cracked the secret to farming oysters for export:

A Bluff oyster company says it has cracked the secret to farming the Bluff oyster for export.

But the company, which is based in the old Ocean Beach meatworks in the port town, will not be ready to start production until it finds suitable waters to finish off the oysters.

New Zealand’s Bluff Oyster Co general manager Rodney Clark said they would then be ready to produce millions of oysters for the world market.

Mr Clark, who has been involved in the Southland fishing industry for 25 years, said he started pioneering the project a decade ago.

The hatchery and nursery were now “perfected” and ready to produce millions of oyster spat and adult-sized oysters for export, he said. . .

This is good news for oyster lovers all over the world.

I’m not among them but accept the verdict of oyster lovers that the Bluff ones are the best.

“This has the potential, with the right support in the southern region, to produce hundreds of new jobs but it will need support from councils and local government,” he said.

Targeting the export market would avoid flooding the New Zealand market and help to protect the existing wild Bluff oyster industry, Mr Clark said.

The oysters would be grown in the hatchery before moving into Bluff Harbour. But the harbour is not “certified waters” so the oysters would need to be moved to other certified waters approved for the sale of shellfish for export.

New Zealand’s Bluff Oyster Co is working with Southern Clams, which is based in Dunedin.

Southern Clams operations manager Dave Redshaw said he was in the process of applying for a resource consent to finish the Bluff oysters in Otago Harbour.

The farmed Bluff oysters would be moved to the harbour for two weeks to cleanse before meeting export standard, he said.

The Otago Regional Council had rejected two applications because of insufficient information, but the company expected to present its third application next month, he said. . .

The ODT is running a Stand Up Otago campaign which is supported by the ORC and Dunedin City Council.

Having a how-can-we-help attitude rather than a you-have-to-do-this one from councils plays an important part in business development.

I’m not suggesting they should break any rules, just that they need to ensure the rules they have are necessary and that applicants are helped to comply with them.

The south needs all the jobs it can get and councils must ensure they’re not putting unnecessary hurdles in the way of businesses which could crate them.

Let’s get positive


What’s the government done for Otago?

This was the question put to Economic Development Minister Steven Joyce.

He responded that the government is supporting Otago in many ways:

The development of all of New Zealand’s regions is hugely important to the Government, as it is to New Zealand as a whole.

The New Zealand economy is, of course, the sum of its regional economies and that is why the Government is placing huge emphasis on assisting each region to maximise the opportunities they have to encourage businesses to invest in their region and employ more people.

The reality is nothing creates jobs for New Zealanders and their families better than competitive, growing businesses.

As part of our Business Growth Agenda, the Government is involved in a broad range of economic development initiatives in the Otago region and throughout New Zealand to encourage new investment, jobs and growth. . .

It’s not just direct funding which helps regions. Policy changes such as the RMA reforms make doing business easier, and less expensive.

Our big increases in science and innovation expenditure are designed to encourage businesses to develop more world-leading products and services; our skills policies are designed to provide more of the skills that industry needs, in areas like engineering, ICT, and construction trades; and our capital market reforms are designed to encourage more people to invest in productive businesses.

There are more than 360 initiatives across our business growth agenda, and a large number of them relate generally and specifically to Otago.

He then provided a list of government initiatives which are helping Otago:

• Providing $9 million in R&D grants to companies in Dunedin over the last three years through the Ministry of Business, Innovation and Employment, and now Callaghan Innovation.
• Supporting 200 Dunedin and Otago companies with New Zealand Trade and Enterprise services.
• Directly investing in 10 fast-growing Dunedin companies through the New Zealand Venture Investment Fund Ltd (NZVIF) and the Seed Co-investment Fund (SCIF).
• Funding and supporting the Upstart Incubator in Dunedin.
• Providing Capability Development Vouchers for Dunedin businesses through the Otago Chamber of Commerce.
• Building the ultra-fast broadband upgrade in Dunedin, Queenstown and Oamaru.
• Building the rural broadband initiative throughout Otago.
• Otago projects on the National Cycle Trail.
• Dunedin cycle projects.
• Completing the Caversham State Highway 1 upgrade.
• State Highway 88 bypass
• Supporting the development and investment plans of the University of Otago and Otago Polytechnic.
• We’re providing $277 million in funding to the university this year and $33 million to the Otago Polytechnic and this is helping to fund some $400 million of capital investment by the two institutions.
• Assisting with the international marketing of both the university and the polytechnic through Education New Zealand.
$15 million for Forsyth Barr Stadium.
• Encouraging petroleum exploration around the region.
• Supporting a number of Primary Growth Partnership programmes a number of regional companies are involved in.
• Encouraging the development of irrigation projects in the region.

Then there’s the many millions of dollars put into tertiary education in Dunedin.

. . . The University of Otago is a crucial part of the Dunedin landscape. Because of its standing and success, more taxpayer university funding flows to Dunedin than any other centre in New Zealand, except Auckland. . .

He added that Otago has weathered tough financial times relatively well.

It grew 16% in the four years from 2007 to 2010. Its GDP is higher per person than Nelson-Tasman, Waikato, Bay of Plenty, Hawkes Bay, Manawatu-Wanganui, Gisborne, and Northland; and is just behind Canterbury and Marlborough.

Finance Minister Bill English also accentuated the positive.

Deputy Prime Minister Bill English says he is concerned the ”Stand Up Otago” campaign is ”a bit too negative about the South” when it has been performing better economically than the North.

The Finance Minister and Clutha-Southland MP told the Otago Daily Times in Queenstown yesterday if there is a two-speed economy, then Dunedin is on the fast track, not the slow track.

”Employment growth is faster than all of the North Island, except Taranaki,” Mr English said.

”Per capita GDP is up there ahead of most parts of New Zealand, so they just need to be careful they’re not talking the South down.

”It’s actually been doing pretty well. There’s job creation going on, unemployment is significantly lower than it is up North, which tells you that even if there’s been job losses, there’s also been new jobs and they need to take account of the new jobs.

”If you want to attract business, investment and jobs, then you want to be telling a positive story, not a negative one.” . . .

The South has a lot going for it and is doing well.

Those behind the Stand Up Otago campaign should be focussing on the positives.

That includes many innovative and successful businesses which have weathered the recession, are providing jobs and making a significant contribution to the regional and national economies.

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