Local focus advocated for growth

Economic growth is boosted by paying attention to local details, says ANZ Chief Economist Cameron Bagrie. Photo / Glenn Taylor

Hawke's Bay needs to think small to stand tall, says ANZ chief economist Cameron Bagrie.

In Hastings yesterday at a Hawke's Bay Chamber of Commerce function, he said the region needed to get the small things right for success.

"There is no magic potion. Magic potions don't exist and tend to be snake oil."

Queenstown and Wanaka had similar attributes to Rotorua and Taupo, which 10 years ago were the North Island equivalent, he said.

"Taupo and Rotorua have gone nowhere and Queenstown and Wanaka have gone through the roof."

Small things such as bungy jumping had steadily shifted the district.

"The most important thing to unfold in Queenstown over the last six months was the relaxation of the [airport] night-time curfew rules.

"That is a very simple example of how a localised initiative, which can go under the radar, can deliver over time with a big economic punch."

Economically South Canterbury started to "hit the ball out of the park" because the Port of Tauranga took a strategic stake in the Port of Timaru, lifting awareness of irrigation-related development in the Canterbury Plains.

"All of a sudden the business community within the Timaru arena started to move. It was no longer about kicking tyres but about doing deals."

Carefully considering local actions should be a focus.

"Quite often you get so picked up in the bigger-picture stuff - swings in commodity prices, population growth, interest rates - you lose track of the micro-economic stuff. The micro-economic stuff is often the building blocks of a well-performing economy.

"Micro-economics is policy initiatives and it is also what businesses do themselves - individual-level behaviour."

The region had to lead its change. "Central government can be the supporting actor. It is not going to be the prime actor.

"Regional growth requires the region, within itself, to step up to the plate. To stand tall sometimes you sometimes have to think small. It is a collection of small things done well that ultimately, over time, deliver economic punch."

International economic volatility was the "new norm" and there was little wriggle room for adverse events.

The international financial system had more debt than in 2008 and Europe and China were facing challenges.

"There seemed to be this belief that if things went pear shaped central banks would rescue us with lower-for-longer interest rates.

"I get the impression today we have squeezed all the juice out of that lemon."