City And Regional Deals – A Threat To New Zealand’s Sovereignty?

Presented to Aotearoa-New Zealand as a bold plan for promoting regional growth, it seems, if implemented, the Coalition Government’s ‘City and Regional Deals’ may actually have multiple negative impacts on NZ.

Records of negotiations between Central Government and three regions have largely been kept secret. The Cabinet Paper and Cabinet Minute on the Department of Internal Affairs website have both been heavily redacted. Official Information Act requests and democratic process are being denied. So, what’s going on?

If it proceeds, it seems that the City and Regional Deals may:

• result in each region being divided into one, or possibly more, ‘special economic zones’ (SEZs) – separate, semi-autonomous, semi-privatised entities;
• eventually undermine New Zealand’s identity as a distinct sovereign country, and its right to govern as such;
• be perceived as a thinly disguised land, wealth and power grab, with public institutions and services being privatised by corporate interests;
• provide a pathway for special economic zones to eventually morph into ‘charter cities’, with almost full autonomy and operating as though they are a separate nation in their own right (similar to Big Tech’s ‘freedom cities’ in the US);

Canadian academic Quinn Slobodian, Professor of International History at Boston University, and an expert on SEZs, is highly critical of the concept. He warns that they:

• are a new version of colonialism, where a wealthy elite establish exclusive enclaves, impose their own rules, and consider themselves immune from state accountability;
• are a key tactic for free-market radicals to establish regions free from democratic oversight;
• lock in free-market principles through legal contracts;
• are an instrument for selling off public services and infrastructure to private companies who then have undue influence in the region;
• allow employers to ignore national standards regarding workers’ pay rates and conditions, leading to poor working conditions and exploitation;
• promote tax-avoidance schemes separate from central government, thus undermining the latter’s ability to fund the country’s public services and infrastructure, such as national roads, hospitals and schools;
• circumvent national environmental standards and prioritise resource exploitation, while ignoring local communities’ concerns, values and the right to have their say about how their community develops.

Slobodian concludes by stressing that without national-level legal and economic regulations to protect the environment and workers’ rights, the end result may be “a global world of extraction and predation”.

ref: Quinn Slobodian, ‘Crack-up Capitalism: Market Radicals and the Dream of a World Without Democracy.’ Allen Lane, UK, 2023

Have regional deal negotiations in New Zealand been held in secret because they are likely to have been soundly rejected by a large section of the population, had they been openly debated?

Are they secretive because they are being pushed through by a small group of ultra-conservative individuals and companies - Act and National figures included - who propose a radical reshaping of the political, social and cultural landscape of New Zealand, one region at a time?

A historical timeline of the SEZ proposal in New Zealand suggests as much.

2015: the Atlas-affiliated think tank, The New Zealand Initiative - funded by some of New Zealand’s largest businesses – publishes a document on special economic zones titled ‘In the Zone: Creating a National Toolbox for Prosperity’, written by Eric Crampton and Khyaati Acharya.

The foreword is written by Local Government Chief Executive, Malcolm Alexander (recently appointed as government negotiator for the Queenstown-Central Otago regional deal).

2017: The National Government considers nominating the South Island’s mineral-rich West Coast region a SEZ. Malcolm Alexander is now strongly pushing the idea, while environmental leaders Kevin Hague and Gary Taylor warn it is a crude attempt to circumvent RMA regulations protecting the environment.

National’s plans are put on hold after a Labour win in the 2017 election.

2023: Re-elected, the National-led Coalition Government announce SEZs are firmly back on the agenda, and propose fast-track regulation to rapidly advance previous plans.

2025: Special economic zones appear to have been hidden within a ‘City and Regional Deal’ initiative, announced by the Coalition Government, who invite mayors to nominate up to five projects they consider would unlock economic growth in their region, via ‘light-touch regulation’.

Eighteen New Zealand regions submit proposals. Three - who possibly already have an understanding with Government - are chosen to sign memoranda of understanding with Central Government – Auckland, the Western Bay of Plenty and Queenstown-Central Otago. Their proposals may serve as prototypes for other regions, giving them less input into their own deals.

National Party ex-chief of staff Wayne Eagleson is announced as Central Government’s negotiator for Auckland, ex-National Party cabinet minister Steven Joyce for Western Bay of Plenty and Malcolm Alexander for Queenstown-Central Otago

Negotiations begin between mayors and Central Government, with plans to announce the first regional deal in 2025, the other two in 2026.

A local newspaper article of 21 February, 2025, describes the Queenstown Lakes and Central Otago’s bid to be put to the Queenstown Lakes District Council for approval, before it goes to Central Government for assessment in the bid process.

In a ‘Leverage the visitor economy to boost economic growth’ section, the draft bid mentions the two councils are considering ‘potentially creating’ a special economic zone in the area. This is firmed in an ‘Electrify Otago Central Lakes’ section, which mentions it plans to apply for a special economic zone to pioneer energy innovation in the region.

Why so secretive? Overseas experience suggests a likely answer:

The Canadian experience: Journalist Anushka Yadav relates that when Canadian politician Doug Ford (on the right side of the political spectrum) pushed through an Economic Zones Act for Ontario earlier in 2025, it was met with strong opposition from indigenous communities, legal experts, civil society organisations and environmental groups.

Local communities were concerned that the Ford Government was prepared to tolerate a reduction in environmental, labour and social protections, while global research was already indicating outcomes for residents were likely to be poor.

The UK Experience: English journalists George Monbiot and Ann Moody have reported that cronyism increased markedly after special economic zones were introduced in the UK.

They also noted that SEZs have dubiously included areas rich in natural beauty and mineral deposits: ‘What first attracted you to Britain’s mineral rich national parks?’ Moody asks with irony.

Moody claims special economic zones are ‘particularly attractive to a brand of right-wing libertarian thinking, which is globally represented by an affiliated group of powerful think tanks known as the Atlas Network’.

She identifies Peter Thiel as a main funder of SEZs and mentions that Thiel seems particularly keen to build in ‘private cryptocurrency paradise locations for the mega rich’ in ‘autonomous zones outside of government control’.

George Monbiot identifies the Atlas Network as driving a campaign to implement neoliberal agendas all around the world - ‘It’s ‘a crash programme of massive cuts; demolishing public services; privatising public assets, centralising political power; sacking civil servants; sweeping away constraints on corporations and oligarchs; destroying regulations that protect workers, vulnerable people and the living world; supporting landlords against tenants; criminalising peaceful protest; restricting the right to strike’.

Monbiot also predicts, however, that such policies are unpopular and that ‘governments that permit beautiful places to be trashed, workers’ lives to be endangered and consumers to be conned might find themselves voted out of office’.

The Welsh experience: In Wales, the story seems the same. Journalist David Powell describes how SEZ plans there appear to have been a covert means of selling off parts of the country to private investors, and asks readers: ‘Did you vote for this?’

Powell contends: it’s ‘…a process through which libertarian ideologues are installing a global push to reconfigure nation-states, to reverse and dismantle democracy in the 21st century. The zone is a harbinger of offshoring wealth with no checks and balances, no rights, just raw corporate hegemony’.

Powell adds: ‘…It goes like this: break up a nation, subdivide the land, invite foreign venture capitalists in, and hand over powers of governance to them while reducing elected government oversight… legalising the breach of hard-won rights and freedoms’.

Powell claims SEZs are being driven by ‘…an extremely powerful transatlantic billionaire network of fossil fuel magnates and property developers who are pooling their resources - for what? To tip UK democracy into further crisis by stripping it of assets and offshoring its profits’.

Ref: David Powell: https://bylines.cymru/voices-lleisiau/mr-drakeford-with-all-due-respect-sunaks-freeports-are-a-threat-to-democracy/

It’s critical analyses like these that provide an insight into who is driving SEZs abroad, and why. They possibly provide an answer as to why the City and Regional Deal negotiations in New Zealand are being held behind closed doors.

Ample evidence is now coming in from abroad that special economic zones impede rather than elevate the wellbeing of citizens. If implemented here they would be an assault on the sovereignty of Aotearoa New Zealand. An assault, also on the core values of New Zealanders, the majority of whom take pride in equality and public ownership.

If the overseas experience is anything to go by, it appears there’s virtually nothing for ordinary New Zealanders to cheer about and much for them to be concerned about.

Barbara O'Grady is a South Island-based writer with an M.A. in Mass Communications from Leicester University

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