The government has taken the next step to boost regional economic recovery with the establishment of the new fund to replace the Provincial Growth Fund.

Economic and Regional Development Minister Stuart Nash says the new fund is a vital part of post-Covid recovery efforts.

'Today we are launching the $200 million Regional Strategic Partnership Fund, which delivers on a manifesto commitment to keep supporting economic recovery in the regions,” says Nash.

'Over this Parliamentary term the RSPF has three goals. It will work in local partnerships to enable economic and business development, accelerate Māori economic aspirations, and support sector transformation. Each region will help decide its own priorities.”

He states that central government will partner with local government, iwi, businesses, community organisations and other agencies to identify priorities and co-funding opportunities.

'Regions will identify priority investments which support the Government's vision of creating more productive, resilient, inclusive, sustainable and Maori-enabling regional economies,” says Nash.

'Year one funding is set aside in Budget 2021, from reprioritised funding administered by the Provincial Development Unit (PDU). Further reprioritisation will occur by the PDU to reflect the Minister of Finance's expectation of value for money and targeted investment where it is most needed.”

The aim is for the $200 million fund to be seed funding for regional priorities, with further funding decided on a case by case basis. The investments will be strategically designed to unlock various other sources of capital to get projects underway.

'The PGF invested more than $3.11 billion in regional economic development in its three year life. Existing PGF projects will continue to be progressed.

'Our regions are a vital part of New Zealand's economic strength but have been neglected in the past, stifling economic growth and living standards in regional communities.

'We are taking a new approach, focusing on building strong partnerships to help regions realise their economic potential. The PDU will work in consultation with other parts of government and the private sector to ensure a more effective all of government regional economic development strategy.

'Creating the Regional Strategic Partnership Fund is a significant move and represents another step toward creating a productive, innovative resilient and sustainable economy.

'Investments are creating enhanced regional and community assets, improving the environment, diversifying economic activity, enabling opportunities for wider investment by local government, iwi and businesses, and boosting employment.”

The PDU will adopt a new name to reflect its new focus. It will be known as Kanoa, or the Regional Economic Development and Investment Unit. Kanoa has a broad meaning through proverb and whakataukī, with reference to home fires, and to the guardian of the store house who helped others to thrive.

Questions and Answers

1. What is the Regional Strategic Partnership Fund?

The RSPF will focus on strategic investments to boost the economic recovery in our regions, by building on $4 billion-plus in previous investments from funds including:

· Provincial Growth Fund, including Te Ara Mahi

· Maori Trades and Training Fund and He Poutama Rangatahi

· Infrastructure Reference Group

· Strategic Tourism Assets Protection Programme

· Regional Investment Opportunities, part of the New Zealand Upgrade Programme

· Covid-19 Worker Redeployment Initiative

The RSPF supports the Government's objectives outlined in the Speech from the Throne - to accelerate our economic recovery and lay the foundations for a better future.

2. How will the RSPF align with existing regional development funds?

The RSPF builds on central Government's existing investment in regional economies through the eight funds noted above, which now exceeds over $4 billion dollars.

As a guideline, co-contributions on projects expected to be at 50 per cent for commercial investments and 20 per cent on others, which will also add to the scale of investment through the RSPF. Loans and equity will be the primary means of investing in any commercial or quasi-commercial project; grants will be considered for non-commercial entities.

3. Who makes the decisions on proposals?

Regional Economic Development Ministers will make decisions on proposals up to $20 million dollars. They include the Minister for Economic and Regional Development, the Minister of Finance, the Minister for Social Development and Employment, and the Minister for Māori Development. Funding proposals over $20 million dollars will be decided by Cabinet.

4. Are ‘shovel ready' and ‘jobs' still core criteria?

RSPF investments must meet the following new eligibility criteria;

· Located in regional New Zealand (outside the three main centres of Auckland, Wellington and Christchurch and excludes Auckland region as a whole)

· Aligned with Government and regional economic development priorities

· Aligns with PRISM (Productive, resilient, inclusive, sustainable and Māori enabling)

· Meets co-contribution rates of 50 per cent for commercial investments or 20 per cent for non-commercial investments

· Recipients capability to delivery and implement the project

5. How is this different from the Provincial Growth Fund?

The RSPF will work from foundations built by the PGF but will act more as seed capital to get deals moving. A reduced level of funding calls for more strategic investments and the PDU is well placed to provide strategic oversight of regional priorities. Applications will be received by invitation only.

6. How much will my region get – is there an allocation?

While each region will not receive a distinct allocation, by taking a more strategic approach to the RSPF, the Government is seeking investment proposals which are not only an identified priority for the region, but which also build upon investment already made.

Regional distributions by the PDU to date are itemised in the table below:

Funding values as at 31 March 2021 from PGF, TAM, MTTF, HPR, IRG, STAPP, RIO & CRRF.