Shane Jones’ multi-billion-dollar Provincial Growth Fund still has a long way to go before reaching its $3 billion target, Jason Walls says the next couple of years might prove to be a political headache for the Government

Shane Jones.

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.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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14 Comments

Sorry teachers and nurses, we’ve sold our soul, oops, I meant to say made a deal with NZ First.

Jones doesn't have a coherent plan, mainly because he didn't step back far enough, or establish a goal future-applicable enough. See my post in this weekend's list to see why he failed.

The goal has to be identified - and from here on, 'making money' is an invalid one. Much as that seems incomprehensible to a lot of folk. Conditioning is a powerful tool.

Money to burn...

The Economy Sucks....if I did the same with my petty cash, I would be sitting here on the new Karzi, staring at goldfish.

Wasting money is so easy, acquiring it.........takes years...and years...and years........of peoples lives......to Fund.

We need to think for the future......and stop the wasteful poll-lies and their mindless waste of ...'our Money'

There are so many things that need fixing......while this lot waste money....hand over fist....not an econo-missed among...em...(I think that is how they spell...it).....though it is underlined in red on my computer.

We deserve the politicians we get. If NZF didn’t think we were so gullible they wouldn’t have bothered with this hare brained scheme. When the economy tanks you can bet every piece of wasteful spending will come back to haunt them at election time.

Throwing money around is simply not good enough. The examples listed are one off spend the money exercises. 50 years ago my mother worked in Scotland for the 'Highlands and Islands development board' who spent vast effort and reasonable money trying to stop the depopulation of the highlands. Apparently the main issue was creating work for women - there were plenty of jobs in fishings and forestry and farming that young men were happy to do but when the young women went to the city for work the young men followed. Maybe the same applies in NZ in which case move some government offices to small town NZ - do it despite the screaming of the senior bureaucrats.

When does the smoke clear and the lie at the heart of this government be seen by all? This is essentially what Jason is quite rightfully identifying here. Corruption, here in New Zealand. Surely not?

President Peters has elected Ardern as Prime Minister with special responsibility for Public Relations and Jones as Pork Minister, in charge of buying votes for El Presidente.

I am shocked, shocked, do you hear?
https://www.youtube.com/watch?v=qmywwiZth5E

Corruption??? Evidence please. Surprised such a political statement made comment of the day .

Some thoughts

1) Everything that gets PGF funding should go through business case analysis (this will probably soak up 5% of the fund).

2) There seems to be plenty of public toilets needed for tourists - perhaps solid gold ones ?

3) They could speed up the development of NZ's great (cycle) rides which complement NZs great walks & will be a tourist attraction for a market segment

4) As a tourist attraction some funding could go to Christchurch's cathedral to get it rebuilt more quickly (Chch is still a provincial town :) )

5) There must be some value added industries NZ could add in the provinces (e.g. value added fish processing as Iceland has done & was mentioned elsewhere on interest.co.nz). Surely we can commercially further process commodity wood, meat, dairy wool, horticulture or add new crops/products which provide added value.

6) Surely there are provincial areas where cell phone (not commercially viable) / internet coverage is still limited due to rate of rollout & geography.

7) Given Kiwirail is so financially cash strapped, are there additional tourist rail services which could be rolled out & are commercially viable but need the start up capital?

Could I suggest that you go onto the MBIE site - look for Provincial Growth Fund and read through it. The assumption that they have money to throw around without investigation is naive given the criteria to apply to the Fund. They have been swamped with applications that are being considered. This is also over three years and we are only months into it. Note too it is a Provincial Growth Fund that excludes Auckland, Wellington and Christchurch.

$350,000 on a detailed business case for expanding the expansion and enhancement of the National Aquarium of New Zealand in Napier?

From experience of detailed business cases, I'd say that is about $300,000 too much.

Still, it will help Jones in his quest to piss away $3,000,000,000.

Couldn't agree more. No doubt that includes some "research" trips to other aquarium type attractions in various far flung countries. and can't travel in the back of the bus.. gotta have the fancy seats up the front.

Glass half full, chaps and chapesses.

We are gonna get some damn fine-lookin' Horsies outta this mob, and nice all-weather tracks to let them show off their paces without getting their hooves wet.

Plus, raffling off the betting-agency side of the biz to Oz, a country well-known for arranging bets on everything north of two flies crawling up a window, is certainly going to improve the efficiency with which cash is hoovered outta local punters' pockets.

We know all this from the $600-a-head dinner just a few days ago, where the local 'industry' head honchoes (honchos? honchi?) were herded in and showered with largesse.

It's the local equivalent of Helicopter Munny, perhaps?

Face it, you're just one of those 'glass half filly' types.

Round our way it looks as if cannabis growing is about to skyrocket. I'm sure the good minister will be into that with his PGF. Medicate the planet kiwi style. It's gotta be a winner.