Stuart Nash's new, significantly slimmed down, Provincial Growth Fund – how it's different

Economic Development Minister Stuart Nash. Photo / Mark Mitchell

The Government has launched the new-look but significantly slimmed down, Provincial Growth Fund, with much stricter criteria for giving money away.

The PGF was the crown jewel of the New Zealand First/Labour coalition deal in 2017 – a $3 billion fund to be dished out across the country.

That $3b fund has become a $200 million fund, as signalled before the 2020 election. The new money was officially allocated to the project in last week's Budget.

The funding was leftover money from the PGF.

Although it's a lot less money, there is a much stricter criteria as to who can get funding.

Now, money can only be dished out if the applicant can both deliver and implement their proposed project.

That would likely mean the end of the fund paying for feasibility studies.

Economic and Regional Development Minister Stuart Nash is confident that even though the fund is less than a tenth of its original size, it can still deliver for regional New Zealand.

"We are taking a new approach, focusing on building strong partnerships to help regions realise their economic potential," he said.

A major difference between this new fund and the $3b PGF is how the funding is allocated.

Under Nash, would-be submitters can only apply for funding if they are invited to do so – the previous iteration received thousands of applications.

And funding will only be allocated to projects which have already received some form of funding to get them moving.

The money dished out will be seed capital, meaning it is there to help get initiatives off the ground.

Nash said this is a "more strategic approach".

As well as allocating the new money, the Regional Strategic Partnership Fund (RSPF) will be in charge of the more than $4b previously allocated through the PGF and other regional initiatives.

According to documents provided by Nash's office, just $1.5b of that $4b has actually paid out to successful applicants.

For example, of the just over $281m allocated to the Hawke's Bay, just $85.5m has actually been paid out.

In Northland – the region that received the most PGF funding – just $350m of the $825m allocated to the region has actually been paid out.