Article: Property Investment

Challenges For NorthlandChallenges For Northland

Let them eat cake - did not work out well for Marie Antoinette. “Double-laning ten one lane bridges” did not work out well for National. Thinking Northland’s concerns of neglect could be appeased by upgrading some little known bridges shows how distant Wellington politicians are from Northland in more ways than kilometres.

Winston Peters outsmarted National big time, and for quite a few reasons. Most importantly, it was a by-election so no-one needed to concern themselves with big issues like who they wanted to govern the country. It was the electorate’s chance to send a message to Wellington. Peters knew it, and he built his campaign around it.

The Northland electorate has been taken for granted for far too long; ever since Social Credit held the seat in 1969. Large parts of the region have been left behind. The roading infrastructure needs work, pockets of housing are substandard and certain areas have become ghettos, educational standards are below the national average, household incomes are too low, and unemployment is too high. Not only that, there is an element of hopelessness that things are not going to get better, probably because they have been bad for so long.

That may not be entirely the government’s fault and in my view those who think the government will make things better for them are expecting too much. At best a government (regardless of who it is) will serve up crumbs. If you want something worthwhile you have to go and get it yourself. That of course is simplistic and insensitive to those who start well back from the rest of us, or due to circumstance, can’t get up and go anywhere.

The bottom line is the macroeconomic policies that have generally succeeded in ensuring modest growth to most parts of New Zealand have not trickled down to distant provinces like Northland. If politicians are to have a meaningful impact on local communities the policies will need to be at grassroots community level, and target the real reasons why large pockets of the population have not been able to do better than they have. That’s a massive task, but a good place to start is jobs.

Unfortunately the way of the world nowadays is that there is diminishing demand for unskilled workers. Even forestry, which is important to the North, is becoming less labour intensive - in part because safety issues are putting heavy machinery in place where just a few years ago there were men with chainsaws. A lot of new economic activity would be required to absorb the unskilled pool of labour, which will only come about by a major shift in activity. In my view its time for local councils and central government to consider establishing special economic zones in depressed areas like Northland, where inducements are offered, such as export incentives and tax holidays, along with fast-tracking consent applications to attract business investment, jobs and growth.

Instead we are probably going to find additional support coming in the form of road works, including the extension of the northern motorway. That will bring Auckland closer, which will be good for tourism and business. The rail link may also become a possibility, and that would be good if only to make our roads safer. While not wishing in any way to discourage these necessary improvements, I doubt the benefits will be felt in the communities of greatest need. That would require much more fundamental reform.

To their credit, National has already identified that one of the barriers to progress and development in many parts of the country is the Resource Management Act (RMA). This is certainly the case in Northland, which is rich in natural resources. Ironically for the people of Northland, by reducing National’s majority they may well have stymied the RMA reforms that would have improved access to such resources. In this respect, Northland voters may not only have done themselves a disservice but other regions as well.

The other inexplicable behaviour of some in Northland is their opposition to oil exploration. The dire warnings of catastrophe are nowhere to be seen in New Plymouth, which has one of the highest income levels in New Zealand. That’s something Northland could possibly achieve also, but it seems some are more content to be on the bones of their butt, living on handouts than working on an oil rig and earning serous money for their family.

No doubt Wellington will now pour money into Northland, but if Northland is to pick up its game it needs to start supporting change rather than opposing it.

Frank Newman is the principal of Newman Property Consultancy. He is the author of numerous books on investment matters. For questions or comment about this article contact .(JavaScript must be enabled to view this email address)

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