Masterton performing well

PERFORMING: There have been plenty of indicators Masterton is performing well. PHOTO/FILE

LAST week the think tank NZ Initiative published its report entitled "Creating a toolbox for regional prosperity".

The report strongly encouraged a greater focus on regional economic development through differentiated policies. In essence the authors recommend incentivising local authorities by rewarding them for achieving economic growth.

The main beneficiary of increased regional performance is central government through its increased tax take. And according to the authors this is a perverse incentive.

Masterton District has outperformed almost all other regional centres over the past two years. In 2014 GDP per capita grew by 6 per cent. There has been plenty of other indicators that Masterton is performing well.

There has been an increased demand for property and now a shortage of supply for the first time in many years. Last week we read that the number of people on benefits had dropped by more than 100 across the region. We have started seeing job growth and our My Masterton campaign has led to real population growth for the first time in many years.

The Masterton District Council has taken the initiative in the economic development space and we are seeing the returns but we need to resource our various projects by cutting expenditure elsewhere.

Our rates' revenues are largely fixed in real terms so there is no reward for our investment in our district other than knowing we are making a difference in local income and wealth.

Obviously we would support the recommendation of local government sharing the tax revenue take when we are successful.

The NZ Initiative also criticises the inflexibility of the Resource Management Act. Balancing economic and environmental objectives can vary from region to region. Clearly the needs for large cities are very different from those in rural and provincial New Zealand. While we have seen significant population growth in Auckland, the impact of increased congestion for Auckland should lead to quite different restrictions to those of us in smaller centres. The housing crisis is very much an Auckland issue. Penalising the regions through higher real interest rates leads to unnecessary dampening of investment across parts of NZ which desperately require exactly the opposite.

In Wairarapa we have genuine concerns around the recently released draft natural resources plan.

Economists prefer constructive incentives (or disincentives) over inflexible legislation and regulatory controls which lead to expensive consenting processes or equally costly litigation. Legal challenges or processes do not in themselves add to increased domestic income or production.

The NZ Initiative recommends experimenting and piloting a variety of rules and tax sharing incentives.

And Masterton District Council would be first to put up their hands for those opportunities.

We have proven already through our My Masterton campaign that we are prepared to be innovative. We are achieving real results. But we are a relatively poor community and we can't afford the big economic development ticket items of our urban neighbours. We support improved regional prosperity and designing horses for courses.