Policy priorities 

The regions of New Zealand hold substantial autonomy afforded to them through the country's Local Government Acts. Subnational government responsibilities were redefined and autonomy increased through the 2002 Act, before its amendment in 2014 added additional clarity on regional and territorial authority responsibilities. Regional councils monitor aspects such as resource management, public transport and air and water quality whilst Municipal authorities are responsible for areas including community and economic development, local regulations and tourism^[1]. 

Despite being one of the richest countries by the early 20th century, New Zealand’s performance relative to other global developed nations declined from 1914 to the 1980s. Contributing factors such as commodity price shocks in the 1960s, and weakened links with its main trading partner (the UK) and energy shocks in the 1970s, led to market-oriented policy reform between 1984 and 1991. Income grew as a result, however inequality and housing market imbalances followed^[2].

As a result, subsequent inclusive productivity policy priorities centred on diversifying its economy through new knowledge-based enterprises and the use of knowledge intensive services. Promoting inclusiveness, addressing skills shortages and better positioning Māori communities to build and leverage off their collective resources, knowledge, skills and leadership capability were also ambitions^[3].  

Regional approaches reflect this. Early strategies such as Wellington 2012 and Northland 2016 have focused on investment and sector specialisation while more recent strategies such as Canterbury 2017 and Christchurch 2018 have targeted the lowering of NEET levels and improving pathways to employment to negate the rise in educational inequalities. Between 2008 and 2018, the proportion of 18 to 24 year olds in Canterbury who were not in education, employment or training (NEET) fluctuated, with a low of 10% in 2008 and a high of 17% in 2011. In 2018, 13% of 18 to 24 year olds were NEET.

Selected regional strategies

What has changed since 2008 

New Zealand has experienced strong growth with an economic turnaround largely considered as a major public policy success^[1]. With rising productivity and growing GDP^[2]  it is expected to maintain a moderately prosperous society over the foreseeable future. 

The strategy implementation since 2008 has allowed the enabling of a flexible open economy and facilitated the reallocation of resource across sectors with a readiness to combat market shocks. Beyond the key economic indicators highlighted above, jobs density has increased in our focus regions while the rate of NEETs has decreased.

However, the Social Investment Policy approach adopted between 2008 and 2017 also resulted in the downplaying of policies with societal benefits in favour of those evidencing fiscal outcomes. As a result the country has experienced a rise in educational inequality and housing market imbalances.

As highlighted by The Economy 2030 Enquiry the lesson for UK and international comparators in New Zealand’s policy approach is that economic progress and sustainably high wellbeing are not synonymous. The negative wellbeing implications of housing and education inequalaties are often larger for certain ethnic groups and in the case of New Zealand particularly within the Māori community^[3].

In Northland, which had a focus on supporting Maori youth into employment, youth unemployment has fluctuated between 2008 and 2018, and has continued to do so since although on a downward trajectory.

Similarly, in Canterbury the main city of Christchurch has lost some ground compared to New Zealand’s national economy. Population and economic power has grown more slowly than Auckland reducing Christchurch’s the ‘pull factor’ to business, talent and investment. However, the city remains successful in achieving economic growth without losing focus on social wellbeing and inclusion.

Caveats and conclusions

There are some caveats that may limit the ability of the North East to learn from New Zealand. In contrast to the demographics of the North East, New Zealand has a young and quickly growing population that contributes to its economic performance. The nation is also geographically isolated which influences trade and migration patterns.

It is important to note that particularly in Canterbury, the lack of attention to skills and educational policies until 2017/18 is also likely as a result of the earthquakes of 2010/11. Subsequent policies shifted to prioritising infrastructure and rebuilding in the aftermath and may have overlooked inclusive aspects of growth to address immediate priorities. 

Overall, the economic performance of New Zealand in this period shows that internationalisation and focussed regional strategies can lead to economic growth, even in difficult circumstances such as outward youth migration and responding to natural disasters. However, it also shows that this can lead to greater inequalities in areas such as housing which can affect some groups more than others. Balancing this needs to be part of any inclusive growth strategy.