A $5.8 million boost from the Government aims to add 81 more jobs and break the cycle of welfare dependency in Minginui, a struggling Bay of Plenty town of fewer than 300 people.

Minister for Forestry and Regional Economic Development Shane Jones announced the money for Minginui Nursery today to help scale up production of forestry-grade native seedlings.

The money, to be provided over three years, comes from the $1 billion-a-year Provincial Growth Fund, which is part of the coalition agreement between Labour and NZ First.​

Minginui was planned as a forestry town by the Ministry of Works and was built in the late 1940s, but the population has dropped to less than 300 since the closure of the sawmill in the late 1980s.

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"With the Provincial Growth Fund's help, Minginui Nursery can play its part in rejuvenating the region, contributing to employment and skills development and better social outcomes for the community," Jones said.

"The funding we're announcing today will allow Minginui Nursery to grow up to one million native trees every year and expand its current workforce from nine to 90.

"With the Government committed to seeing one billion trees planted over the next 10 years, we need to work with nurseries and help them increase production to ensure enough seedlings – both exotics and indigenous – are available to be planted."

The funding is hoped to help break the cycle of welfare dependency by getting people into permanent work and also offering social and health services.

As well as employing locals, the expected expansion for the nursery is hoped to draw more skilled people back to the town and upskill current staff into leadership roles.

Some staff have undertaken formal qualifications and have the potential to take part in nursery related research.

Educational providers are also being approached to provide bridging programmes for prospective employees and all staff will go through ongoing in-house training.

The nursery is owned by Ngāti Whare Holdings. Te Puni Kokiri provided $130,000 last year to assist Ngāti Whare Trust to enable home ownership for locals in Minginui.

The nursery is already involved in growing forest-grade podocarp species – rimu, totara, matai, kahikatea, miro – and kauri, and also has a large order book for manuka and kanuka.

The Provincial Growth Fund was launched last month with announcements of $61.7 million into forestry initiatives, tourism ventures, and rail and roading projects.

Those announcements hoped to create more than 700 jobs in Northland, Tairāwhiti-East Coast, Hawke's Bay, Manawatū-Whanganui and the West Coast.