Irrigation to lift GDP by 94% to $681m

Site of the proposed Ruataniwha Water Storage project

Even if the proposed Ruataniwha Water Storage project does not go ahead there will be economic growth in Central Hawke's Bay as it currently operates, but at nowhere near the level predicted if there is a reliable water supply for farm irrigation, a recent report shows.

At the latest CHB District Council meeting, Economic Solutions consultant Sean Bevin presented a report card on the district's economic situation, commissioned by the council to give it guidance on future opportunities and challenges for the region.

Agriculture accounts for almost 85 per cent of businesses within the rural production sector in Central Hawke's Bay, and assuming this continues, and there is no water storage dam, by 2040 the GDP would be one-third greater than in 2012, with no extra employment, he said.

If there was a 10 per cent increase in productivity within the sheep and beef farming industry, and no irrigation, GDP would increase from 2012 by more than 47 per cent to $515 million in 2040.

If the storage scheme does go ahead, GDP could lift 94 per cent to $681 million, with more business opportunities around construction, engineering, roading, housing, community services and retail industries. "Provided the district captures those benefits," Mr Bevin said.

With its reliance on rural production, more added value processing would also be important for future growth. A projected declining population, including among the traditional working-age group, was good reason for the council to consider a population growth strategy.

As it stands, from now until 2031, CHB's population is predicted to fall by 8 per cent.

Both the 0-14 year and 15-64 year age groups are likely to fall significantly, while the 65-plus population is projected to double. The district's Maori population is projected to increase by 10 per cent in the next 18 years.

"Any future population growth strategy in the district should be closely linked to, among other factors, addressing specific development requirement and opportunities in the area."

Tourism development also came under the spotlight, with the report noting the international and domestic economic and financial downturn had been felt widely in reduced accommodation-based visitor nights and arrival numbers throughout New Zealand.