The Government’s Regional Infrastructure Fund (RIF), with $1.2 billion on offer over three years, officially opened for business this week. The NZ Taxpayer Union refers to it as the “pet project slush fund”.
Whether a godsend or slush fund, you can be sure that Hawke’s Bay entities — local government and private sector — will be fronting up at the cashier window.
On behalf of our councils, the HB Regional Recovery Agency will be leading the charge. Specific projects have not yet been identified, but HB’s regional priorities have been signalled to the Crown (officially, Kānoa, the Regional Economic Development & Investment Unit of MBIE). Here’s how they are reported on the RIF website:
“Regional priorities include:
- Water security
- High-value food production
- Addressing the labour shortages
- Housing
- Freight logistics.
“These regional priorities were decided by: Matariki Governance Group, Hawke’s Bay Regional Recovery Agency, Hawke’s Bay Regional Economic Development Agency.”
The RIF website identifies flood resilience and Māori development projects as initial focus areas. $200 million has been earmarked for flood resilience, with $101 million already allocated to 42 projects, none in Hawke’s Bay.
The Crown has indicated it will lean toward loans rather than grants, and they will be expecting to see local skin in the game, whether from councils or private sector investment.
The Regional Development Ministerial Group (RDMG) will make decisions regarding loan and equity investments up to $35 million and grants over $3 million. The RDMG comprises:
- The Minister of Finance
- The Minister of Infrastructure
- The Minister of Local Government
- The Minister for Māori Development
- The Minister for Regional Development
Cabinet will make decisions on all eligible RIF investments over $35 million.
Ministry of Business, Innovation and Employment (MBIE) will make decisions on grant investments of up to $3 million.
Applications will not be publicly notified by Kānoa, so there will be no opportunity for scrutiny by other interested parties. And it’s not clear what level of detail or due diligence must support an application. The RIF website, echoed in MBIE responses to BayBuzz’s inquiries, simply indicates: “As part of the evaluation, Kānoa – RD officials will undertake standard due diligence and financial due diligence processes. Kānoa – RD may seek independent commercial advice when considering the proposal’s viability.”
The predecessor economic development fund, also skippered by Minister Shane Jones, was criticised by the NZ Auditor-General for being loose in its documentation.
Speaking of those earlier funds, you might be surprised that as of April 2024, Hawke’s Bay has had 206 projects approved via the several pots Kānoa already administers. The awarded funding (grants and loans) totals $361,232,908, of which $255,419,913 has been paid.
Ten of these were worth $10 million or more; another 47 were funded at $1-$9 million.
At this point, it would be anybody’s guess as to how effectively these funds have been used. Here is a sampling:
- HB Chamber of Commerce: $21.7 million for local business grants, and $1m to administer the programme
- HBRC: $4.3 million for erosion control scheme
- KiwiRail: $6.2 million for Wairoa to Napier railway
- NCC: $350,000 for an Aquarium business case
- Growing Future Farmers Charitable Trust: $890,000 to get young people (under 24 years) interested in and trained for farming jobs
- Apollo Foods: $2.9 million (loan) for new technology at existing plant and $300,000 to expand its Whakatu operations
- Johnny Appleseed: $26.4 million (loan) for Primary Producer Finance Scheme
- Cherri Global: $5 million (loan, $3m paid) ) for operation of cherry orchard in HB
- HDC: $12 million for HB Food Innovation Hub (now called Foodeast)
- HBRC: $32.6 million (only $1.55 million has been paid) for various ‘water security’ purposes
- Wairoa Council: $5.8 million ($4.2m paid) to renovate two buildings on Marine Parade
- Hawk Group Limited: $2.8 million (loan) for new moulded fibre manufacturing line
- Tātau Tātau o Te Wairoa Trust: $2.3 million for Unlocking Wairoa’s Horticulture Potential
- Te Taiwhenua O Heretaunga (TToH): $6 million to refurbish 19 marae
Reading through the list of 206 projects, one cannot held but wonder how many of these were ‘neutralised’ so to speak by Cyclone Gabrielle (for example millions spent on roading upgrades)? And how many achieved their intended goals?
Some projects poke their heads above the weeds and get scrutinised – like Foodeast. Others seem to merrily go their way without public notice. Hopefully many – ideally most – meet their worthy objectives. Maybe someone in Kānoa knows … or are they too busy gearing up to hand out the next $1.2 billion?
But who in Hawke’s Bay would know?
$361 million! Most of it under the radar in terms of any local accountability or — where due — celebration.
