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Report shows PGF significantly boosted our economy

Friday 10 June, 2022

A new report shows the significant positive impact government funding has had on the Tairāwhiti economy.

At the end of last year, Council commissioned a report to see how the Provincial Growth Fund (PGF) investments since 2018 have impacted our regional economy.

The report by BERL (Business and Economic Research Limited) shows that since 2018 Tairāwhiti responded to the multi-million-dollar investment by creating 1500 full-time jobs and increased our GDP by $176m in 2020. The funding was invested into a wide range of sectors and our economy began to outperform its peers.

Council chief executive Nedine Thatcher Swann says the usefulness of this report cannot be underestimated.

“It demonstrates the benefit of regional investment from central government and the clear impact this funding has on our economy.

“Affordability is a big issue here and when you remove that barrier you have growth. When central government works with local government, iwi and communities on their priorities we can achieve great things.”

As of August 2021, $299m of PGF funding was approved for our region and already $121m has been paid out.

Most of the money still to come is for Waka Kotahi to spend on improving our state highways.

The PGF was announced by Government in 2018 to invest in regional economic projects.

Ms Thatcher Swann says, “the funding gave our economy a much-needed boost. More importantly, we know the investment impacted positively on our people employed through the various programmes”.

In December 2019 Gisborne was ranked the number one economy in New Zealand for the second quarter in a row according to the ASB Regional Economic Scoreboard.

When Covid struck in early 2020, the Government repurposed $600m of the PGF for the immediate redeployment of displaced workers and shovel-ready projects to create new employment.

This external funding added additional value to our economy and complemented Council’s own capital expenditure.

Last financial year the largest total capital investment programme ($78.6m) ever delivered by Council, over twice the normal level.

Examples include $47m spent on roading upgrades and $46m on the new Kiwa Pools complex funded 86 per cent ($40m) by PGF shovel-ready projects.

The report also estimated 82 percent of the PGF funding ($243m of the $299m) was used to support investments that would not otherwise have gone ahead.

Māori owned businesses or Trusts were heavily supported with projects funded to support the restoration of our environment and contribute to upskilling employees.

Employers were interviewed for the report and commented that the diverse range of exports meant risks were dispersed during a tumultuous time globally.

Mayor Rehette Stoltz says the report measured the effects of the funding but it is up to us as a region to work together to sustain and build on this growth.

“Council will continue to work with central government, our iwi partners and Trust Tairāwhiti to ensure that our region continues to have investments of significant benefit like the PGF.”

Minister for Economic and Regional Development Stuart Nash has read the report and welcomes the independent study.
“It shows how government regional investment significantly helped Gisborne-Tairāwhiti.
“This report is welcome as it provides clear, independent evidence that our strategy of helping grow regional economies is working,” says Minister Nash.
“BERL says without PGF support, most of these projects would probably not have gone ahead at all and those that might have, would only have been at a later date and on a smaller scale.
“This is great news for the people living there. Remember Gisborne-Tairāwhiti has the country’s largest share of Māori population and the largest number – 39 per cent – of people under 25.
“I am proud that our investment through the PGF is having such a positive impact on Māori.
“This report is a ringing endorsement of this government’s regional economic development and investment strategy and an indication of the benefits of our commitment which are now being felt, not just in Gisborne-Tairāwhiti, but right through our country,” says Minister Nash.

The full BERL report can be read here.