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Home / Whanganui Chronicle

Comment: Success stories all around us

By Andy Jarden General Manager Wanganui Chronicle
Whanganui Chronicle·
22 Sep, 2014 07:03 PM3 mins to read

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Expanding: Open Country is boosting milk powder production. Photo/File

Expanding: Open Country is boosting milk powder production. Photo/File

On TV1's Sunday programme, NZ Institute of Economic Research principal economist Shamubeel Eaqub, backed up by former mayor Michael Laws, claimed Wanganui had declined, economically and population wise to a point past its "tipping point" where it was on an inexorable path to becoming a "zombie town".

While there is no denying regional New Zealand has its challenges, this "once over lightly" visit from a shiny-suited Auckland economist claiming the larger cities of Auckland, Wellington and Christchurch were subsidising regional New Zealand can only be described as arrant nonsense.

Had he gone for a drive down Heads Rd he would have seen the construction starting for Open Country's multimillion-dollar development - building a second dryer and expected to double its throughput - Ali Arc Logistics developing an additional warehouse and recruiting more staff to handle the 30,000 tonnes of additional milk powder production.

Then there are several innovative large manufacturing exporters all doing well, despite the Government stacking the cards against them by sustaining an overvalued exchange rate.

Hats off to Jamie O'Leary for espousing our wonderful lifestyle on the Sunday programme.

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I live on a lifestyle farm 2km outside the city boundary, have a 10-minute drive to work alongside the beautiful Whanganui River, and get grumpy if I strike the one set of traffic lights on red on the way to work.

So let's look at the facts - regional New Zealand still creates the majority of this country's wealth with primary produce exports and tourism combined accounting for 60 per cent of total export receipts. Who is propping up who?

Furthermore, successive government policies continue to undermine regional economies in favour of the big cities.

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We have the highest interest rates in the OECD which, in turn, is fuelling a significantly over-valued exchange rate as foreign investors pour money into New Zealand to take advantage of our higher interest and bond rates.

Why has the Reserve Bank governor been pushing up our OCR and interest rates this year when rural commodity prices in our overseas markets have been in decline, exacerbating the fall in export returns to our farmers, manufacturers and other exporters?

The answer is to control galloping inflation in Auckland and Christchurch house prices - despite house prices in regional New Zealand declining.

As a consequence, economies like Wanganui have seen incomes reduced so as to subsidise the profits of Auckland property speculators many of whom are non-residents.

Discover more

Dystopian portrayal not helpful

22 Sep 07:08 PM

'Zombie town' issues to be tackled at conference

25 Sep 06:42 PM

In election year, of course, the Government has no wish to see the NZ dollar come down - that would boost the returns of regional NZ but would see Aucklanders paying more for petrol, cars, TVs and other imported goods.

In the meantime, as our regional farmers, tourist operators, and manufacturing exporters find it hard to compete in overseas markets due to our over-valued exchange rate, fewer staff are being employed, fertiliser and other farm inputs are being reduced, with production suffering as a result.

And all this to control Auckland house prices.

On one point I agree with Mr Eaqub there is a strong argument for central government to support regional towns such as Wanganui by decentralising/devolving government services away from Wellington and Auckland.

With modern communication, lower overheads, lower rentals and wages, significant efficiencies could be achieved by relocating government departments and services.

Come on John, Bill, Chester and Co it was regional New Zealand that voted you back in. If you allow it to decline, this will impact on Auckland and the larger cities that all rely on regional New Zealand for their prosperity.

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