By Jason Walls
The Provincial Growth Fund (PGF) is arguably the Crown Jewel of New Zealand First’s policy wins following the Coalition negotiations last year.
An astonishing $3 billion over the next three years to dish out to the regions is clearly a lot of money. In fact, $1 billion is hard for an average person to fathom as the number is just so large.
For example, if you spent a dollar a second it would take 12 full days to spend $1 million – it would take 31 years to spend $1 billion.
That means the year would be 2111 before Regional Development Minister Shane Jones, the man tasked with dishing out the cash to the provinces, would be finished spending the whole PGF – using the same example.
On Friday, $350,000 from the fund was allocated for a “detailed business case for the expansion and enhancement of the National Aquarium of New Zealand in Napier.”
This latest funding is by no means on the pricier end of the PGF scale.
The New Zealand Howard League for Penal Reform received $7.5 million towards getting ex-offenders a driver’s licence and the Hundertwasser Arts Centre and Wairau Māori Art Gallery in Whangarei received $10 million.
In April, $13 million was committed to “investigating and supporting a 41-kilometre “Mounga to Moana” walking experience in Taranaki.
By early August, Jones has allocated $126,395,900 to 65 initiatives across the country – just 4% of the way through his $3,000,000,000 target.
A few weeks later, he unveiled by far the biggest item on the PGF agenda – $240 million towards the Government’s one billion trees target.
Despite this, there is still some $2.65 billion left to allocate by the 2020 election.
No doubt the Government will find many willing candidates to spend the taxpayers’ money on over the coming years and Jones will be able to continue to tout himself as the ‘Provincial Champion.’
The problem for the Government is just the sheer scale of the spending and the perception it creates in doing so.
The opportunity cost impact
New Zealand has seen industrial action from teachers and nurses over the last couple of months; it has been decades since strikes of this magnitude last occurred.
And there could well be more as public sector employees attempt to hammer out pay deals with the Government.
But the message has been clear from the Government – don’t expect too much.
Why? Health Minister David Clark put it best when he was fronting up over the nurses' strikes last month.
“There is no money on the table to increase the salary package for nurses. We want to manage the economy prudently,” he said.
Then-Acting Prime Minister Winston Peters made similar comments not long before.
Prime Minister Jacinda Ardern has said a number of times the Government is not going to touch its budget responsibility rules.
Over the next two and a half years, the Finance Minister will inevitably have to turn down applications from those lobbying the Government for more funding.
He might use similar phrases to Clark to justify not pulling out his chequebook.
All the while, Jones will continue his spending spree across the country.
A couple of million dollars here, a couple of million dollars there.
This puts a big target on the Government’s back.
People will undoubtedly begin to ask; “How come you have millions of dollars for aquariums, art galleries and walking tracks and not for teachers and nurses?”
With so much money left to dish out from the PGF, this will be a question that gets louder and louder.
Unfortunately for Jones, he’s got until 2020 – not 2111 – to find the bottom of the PGF barrel.
He, and his Government might be in for a tough ride.