Hon Chris Bishop
Minister for Infrastructure

Hon Simon Watts
Minister of Local Government

The Government has laid out its expectations for City and Regional Deals (CRDs) as long-term partnerships that will increase economic growth, create jobs, and boost productivity for New Zealanders, Infrastructure Minister Chris Bishop and Local Government Minister Simon Watts say.

The Government has also signed the first Memoranda of Understanding (MOUs) to negotiate deals with Auckland, Otago/Central Lakes and Western Bay of Plenty.

“City and Regional Deals will be strategic 10-year partnerships between local and central government to progress joint priorities including economic growth, enabling abundant housing, better management and utilisation of local assets, and closing the infrastructure deficit,” Mr Bishop says.

“The Government has established five objectives for the City and Regional Deals programme:

1. Better coordination between central government and regions, including how we work together and align our priorities
2. Unlocking regions’ unique potential and lifting economic growth, including regional employment opportunities
3. Making room for housing growth
4. Ensuring local governments do a better job at managing and utilising their asset base and make significant progress to close their infrastructure deficits – without new funding from Central Government.
5. Ensuring Local Governments comprehensively adopt Central Government priority reforms such as Local Water Done Well, Resource Management Act reform, and Going for Housing Growth.

“Today we are outlining what central government will put on the table during negotiations for cities and regions participating in CRDs. These are:

1. Improved central government coordination (both internally and with the regions), ensuring the right agencies are around the table. This could include agreement to deploy more senior officials to existing Urban Growth Partnerships and other governance arrangements, and improved Government infrastructure investment and asset management.
2. Early collaboration with councils on system reforms including undertaking joint-spatial planning ahead of RM reform implementation. We will consider improvements to existing regulatory frameworks including: zoning, fees and charges innovation, streamlined planning and land acquisition processes, regional spatial planning.
3. Providing councils with new funding and financing tools and incentivising them to better utilise existing ones. This could include considering the use of sharing of mining royalties, mobilising existing government funds to support deals, and providing access to government experts that could help councils use more complex tools such as Infrastructure Funding and Financing Act Levies.
4. Supporting regions to unlock growth sectors (e.g., technology, biotech, advanced transportation, aquaculture, tourism, cleantech, renewable energy). Central government will consider locating “confirmed/funded” innovation facilities/institutes in regions as part of a CRD.

“The Government expects that local government provides a better framework/structure for regional relationships with central government, and improves asset renewals, maintenance and management including ensuring a pipeline of future infrastructure work.

“We also expect that councils will go above legal and regulatory minimum requirements to unlock housing growth including around rapid transit corridors and where central government has invested in infrastructure. Further, we want regions to commit to exploring demand management tools like time of use charging.

“We are eager that regions commit to exploring new and existing tools including (but not limited to): Targeted rates, IFF Act Levies, Development Levies, asset recycling, and become attractive destinations for international investment opportunities.”

“The Government also expects regions to comprehensively adopt priority Central Government reform including Local Water Done Well, Going for Housing Growth, Resource Management Act and transport governance reform in Auckland,” Mr Watts says.

“Late last year, councils were invited to submit regional deal proposals to the Government. In total, 18 proposals were submitted.

“Following a multi-agency assessment process that included review by independent experts, Cabinet agreed to progress to MOUs with three regions.

“The Government has now signed MOUs with the Mayors from Auckland, Otago Central Lakes and Western Bay of Plenty.

“All three regions have existing Urban Growth Partnerships which demonstrate existing collaboration, and all three have economies with significant economic growth potential.

“These initial regions put together compelling proposals that reflect the Government’s and the regions’ priorities through strong propositions that provide a clear pathway to getting important work done.

“The Government will now begin negotiations with the three regions, with a view to agreeing the first Deal by the end of 2025.”

The MOU signings reflect the National-Act Coalition Agreement to institute long-term city and regional infrastructure deals, allowing PPPs, tolling and value capture rating to fund infrastructure.

Notes:

The three regions:

• The Auckland region comprises Auckland Council.
• The Otago Central Lakes region comprises Queenstown Lakes District Council, Central Otago District Council and Otago Regional Council.
• The Western Bay of Plenty region comprises Tauranga City Council, Western Bay of Plenty District Council and Bay of Plenty Regional Council.

Regions’ light-touch proposals were assessed by a multi-agency assessment panel against four criteria:

• Strategic alignment – Is the proposal aligned with the Government’s priority objectives, does it have economic growth potential, and is there a commitment to housing and development growth?
• Effective partnerships – How strong and effective are the local and central government partnerships, is there collaboration between councils in the region, is there a history of positive collaboration with central government, and is there a commitment to broader government reforms and work programmes?
• Deliverability – Is there capacity, capability and readiness to deliver?
• Economic and financial feasibility – Is the proposal feasible, are projects likely to have a positive cost-benefit ratio, are timelines realistic, and is the risk profile of proposed projects acceptable?

More information is available at: www.dia.govt.nz/Regional-Deals

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