A small town carries some vital lessons for others facing challenges in New Zealand’s regions, write Alex Penk and Julian Wood of the Maxim Institute
In 1994, the small West Otago town of Tapanui lost its hospital. For years after, locals had to travel to Gore, Balclutha, or Invercargill for hospital care and emergency services, away from their community and their support networks, which was a particular problem for elderly patients. But something changed.
Today, Tapanui boasts a fully-staffed rest home, Ribbonwood, and an integrated medical centre, funded by $3.6 million of local money, and 26,000 hours of volunteer time. How? In 2002 members of the community decided to take matters into their own hands, establishing the West Otago Health Trust to create the right solutions for local health needs. The Government came to the party too, gifting the land that the buildings sit on to the Trust.
Tapanui’s story illustrates some vital lessons for other towns facing challenges in New Zealand’s regions. And for many places those challenges will be significant. Over the next 30 years, it’s projected that around two-thirds of our regions will experience population stagnation or decline, with the population growing significantly older on average.
The regions may also struggle with larger economic forces. For example, as a small nation we don’t have much of a “home market” so we rely heavily on access to global markets which typically occurs through globally-linked “growth nodes” — read, urban centres with international airports and ports. Regional communities will need good transport links with these centres to take advantage of international opportunities. If they’re isolated and we can’t build the necessary roads and rail to link them in, these communities will struggle.
Acknowledging the possibility of decline doesn’t mean a local community fatalistically accepting a death sentence.
There are also local infrastructure challenges, like the cost of maintaining community assets — libraries, parks, and pools — as the ratepayer population dwindles or ages. Local Government New Zealand has already said that “for some smaller, older or poorer communities, the need for services and infrastructure to maintain liveability and sustain economic activity is likely to outstrip their combined resources to pay”.
The combined effect of these challenges may be too much for some communities, and as resources and resilience dwindle they will also become more vulnerable to shocks like climate events or natural disasters. If this sounds unduly pessimistic, consider the case of Kelso, the Otago town that experienced two “100-year floods” in 1978 and 1980, becoming uninsurable and unsustainable. It was abandoned in 1981.
With these challenges looming, we welcome the Government’s intention to invest heavily in the regions, and its war chest of $3 billion, a.k.a. the Provincial Growth Fund, certainly holds out hope for those of us who live outside urban centres. But if that spending is going to live up to its promise, it needs to be done right.
Spending money like this always involves risk, and our research demonstrates that we’ll have the best chance of success if regional policy is based on a model of “smart growth and smart decline”. That’s going to require some change. At the moment, government policy focuses solely on growth. While we should go for growth wherever possible, that simply won’t be the reality for every community, town, or region. Given the challenges facing the regions, we have to face the fact that some places will experience decline.
Acknowledging the possibility of decline doesn’t mean a local community fatalistically accepting a death sentence. For example, Youngstown in Ohio has demonstrated that “rightsizing”— planning for a smaller but better Youngstown — can breathe new life into a city by “focusing on improving the quality of life for existing residents rather than attempting to grow the city”.
Communities like Tapanui show that the right kind of local leadership and initiative are out there, ready to partner with central government and revitalise their place.
Recognising that different places have different trajectories and opportunities, and need different strategies, takes us into the realm of “spatial policy”— policy that responds to a location’s particular context, rather than taking a one-size-fits-all approach. This kind of policy attempts to alter the development prospects of particular places and, in the words of the Minister for Regional Development, it’s “a bloody big risk”. But doing nothing is a risk too, and by drawing on the lessons of extensive international experience, we can do our best to tilt the odds in our favour.
One of those lessons is that “multi-level governance” is key to regional development. This just means different layers of authority listening to each other and working together: town councils with regional authorities and central government planners. Top-down approaches won’t solve anything by themselves — they’re too far removed from local conditions.
Bottom-up approaches won’t work in isolation either—they often lack the funding and expertise that central agencies can bring. Instead, a multi-level approach sees central government and local government working together, playing distinct but complementary roles.
Tapanui’s example shows what’s possible. The community decided what its particular population needed — not a straight replacement for the hospital that had been closed, but something different and suited to them — and the Government responded with an important contribution to the development. Although this wasn’t a fully-fledged partnership between local and central government, it’s heading in the right direction.
True multi-level governance that empowers communities will mean central government giving spending power to the regions.
The next lesson is about the importance of locally-driven funding, and this will be the acid test of the Government’s commitment to regional development. The ability to allocate funding is the ultimate tool that unlocks governance, but giving over this authority also requires real trust and collaboration between the different levels of government.
At the moment, the Government’s Regional Growth Programme allows regional communities to identify their own economic priorities from the bottom up. However, the money from the Provincial Growth Fund, and other regional development funding sources, is still dispensed, top-down, by central Government. True multi-level governance that empowers communities will mean central government giving spending power to the regions.
Auckland’s regional fuel tax is a good example of how this can work — a dedicated levy imposed by central government, but spent by local government in their region in accordance with their priorities. Imagine how this kind of significant, reliable revenue could empower other local communities to solve their own problems, for example, if the Government had chosen to return the revenue from its new petrol levies to the regions that it came from.
Central government can help local government in other ways, too. For example, it can help local leaders address one of the most difficult issues they face — raising the prospect of decline. Although the population and economic challenges facing the regions are real, it’s understandable if local politicians calculate that they can’t run for local government saying, “Vote for me, the future’s grim”. But central government could help break this stalemate if it mandates that every local authority has to include decline scenarios, not just growth scenarios, in their long-term planning and strategies. With decline forced onto the agenda by Wellington, local politicians would have more freedom to say the unsayable.
This sort of approach — place-based, multi-level, open to the possibility of decline as well as growth — doesn’t have the easy attraction of optimistic, growth-based narratives or the comforting simplicity and coherence of birds’-eye view strategies. But our research, considering 24 countries, 90 places, and over 200 studies, shows this sort of gritty, tailored approach has the supreme advantage of realism. And communities like Tapanui show that the right kind of local leadership and initiative are out there, ready to partner with central government and revitalise their place. It’s time to back our regions, and take the right risks.