BETWEEN $2 million and $2.5 million is what the Whanganui District Council funds its economic development arm, Whanganui & Partners, each and every year.

That is about $8 million since 2014 when Whanganui & Partners was established with the intention of boosting economic development - basically to attract more tourists, new businesses, more students, new jobs and more residents.

That raises the question ... is this investment working for Whanganui? Are we getting value for money as ratepayers?

It is an important question to ask from time to time because, as an investor myself, sometimes you simply need to make difficult investment decisions - and sometimes that means cutting your losses, regardless of how tough that decision seems at the time.


Unfortunately, most investors are notorious for riding their losers, often until they are worthless or bankrupt.

Throughout New Zealand, council economic development agencies seem to be fraught with failures and derision and, not surprisingly, there has also been a big turnover of staff at many agencies.

Chris Whelan, chief executive of WREDA (Wellington District Councils economic development arm) stepped down after only two years in the job, where there had been all sorts of restructuring and where many had argued that expected results were not being achieved.

And just recently, the chief executive of Auckland citys economic development arm, ATEED, has been replaced.

Closer to home, Linda Stewart was appointed acting chief executive for CEDA (Palmerston North City Councils economic development arm) after Will Samuel stood down - for personal reasons - after only five months in the job.

Here in Whanganui we have recently had a total restructure of Whanganui & Partners, with a new group of independent board members being appointed just over six months ago.

To date there has been little positive news coming from this organisation.

In fact, it has all been rather negative, with several senior staff members, including manager Adrian Dixon, leaving the job, or about to leave.

The general consensus seems to be that the butter gets spread too thinly in these organisations and that councils have unrealistic expectations of what can actually be achieved.

These council-controlled organisations are almost expected to perform miracles, or at least prove their results, which can often be difficult to do.

One could certainly argue that here in Whanganui we seem to be doing reasonably well at the moment - we seem to have turned a corner and visitor numbers and population seem to be growing slowly.

Some argue that this is due to the fact that a rising tide lifts all boats, as tourism in New Zealand has been booming, and they will tell you that Whanganui is not getting its fair share of this tourism explosion and that some of the statistics used seem to be rather selective.

If we stopped investing in economic development along current lines, are there other options?

For example, around the world it is not uncommon for local governments to offer rates abatements to large businesses to attract them to a city (or keep them) to help create new jobs. That said, some econometric studies show that local taxes (rates) are too low to be of any significant encouragement for a business to relocate, and often those businesses bring most of their existing staff with them anyway.

However, rebates may be more attractive to smaller businesses and retailers - especially those presently lacking in the community.

Some communities also create business incubators where new start-up companies can share support services. Sometimes this includes reduced rent and free advice from designated local experts who try to help these start-ups get going.

Small, low-interest loans can also be made available and can make a big difference for a struggling new business.

However, there are other options where ratepayer money may possibly be better focused:

1.) Specifically targeting and encouraging home owners living in the big cities to come here for the lifestyle.

Lifestyle really is the biggest advantage places like Whanganui have to offer those who do not necessarily need fulltime employment.

Incentives can be offered for those who are prepared to move here and build new homes. Perhaps free rates for a few years?

Building new homes creates an economic flow-on effect throughout the whole community. Raging house prices in the main centres have given early retirees the opportunity to sell up and have plenty of cash in the bank when they move to places like Whanganui.

Take a friend of mine who lives in a pretty rough part of Auckland. His home is as humble as they come, yet it is still worth about $700,000 which would build him a pretty nice home in Whanganui and he would still have plenty left over to enjoy himself.

He had never been to Whanganui until I invited him, and he was absolutely blown away and thought the place was wonderful. In his mind he was thinking Huntly, perhaps a little bigger.

I dont know if he will make the move, but he is seriously considering it and perhaps a bit of financial encouragement from the Whanganui District Council might be what he, and others, need to push them over the line and move here.

2.) Employing a lobbyist to ensure our new government keeps its election promises to help places like Whanganui and to chip away at getting government jobs back here - the ones we lost years ago when they were relocated to the major cities. Without regional focus from central government, places like Whanganui will continue to struggle.

We can all do well to remember that small is beautiful. Whanganui does have all you need ... and then some. We also have many creative thinkers and entrepreneurs in this community with plenty of talent yet to be cultivated.

Small communities all around the world have affected their own destiny, often in surprising ways - can we be one of those? The above options might be a lot less expensive than what we currently pay and, who knows, may even have more positive effects.

-Steve Baron is a Whanganui-based political commentator, author and Founder of Better Democracy NZ. He holds degrees economics and political science.