One year of Labour regional policy

Press, Volume CXIII, Issue 33407, 13 December 1973, Page 2

One year of Labour regional policy

(By DENIS WEDERELL) What effect has the Labour Party's regional development policy had in the year since the change of Government?

The Department of Trade and Industry Industrial Development Division talks with satisfaction about what has been achieved, and with confidence about the future. Thirty factories — 25 of them in Otago, four on the West Coast, and one in Wanganui — have qualified for freight subsidies, and are applying them. Details of the unit rate concession on certain South Island manufactured products, to include those consigned through bulk for warders or carried under special contract with railways, were announced last

' month by the Minister of Railways, (Mr McGuigan). The Minister of Trade and ■ Industry (Mr Freer) is expected to give some details soon about the approval of capital assistance. But, in the meantime, the withdrawal of the Wanaka is causing serious delays in the . shipment of goods between the islands. The New Zealand Manu-i ! facturers’ Federation complained about this last week.: ' saying that “it was taking | almost a month on average; to send goods by rail from! Auckland to Dunedin.” Ordinarily, an examination of petrol tax receipts might provide a useful economic ' indicator, but there have been other disruptive factors this year, such as the strikes on the coastal tankers, which make that a less satisfactory measure of regional activity. ' CONSTRUCTION LEVELS One reliable indicator is the level of activity in the construction industry — the value of work put in place. But the figures are available on a comparative basis only up to the March quarter of this year. These show a national increase on the similar quarter of 1972 of about 33 per cent compared with increases of 35 per cent in the Christchurch confbined area, and 36 per cent in the remainder of the South Island. On that basis, the parts of the South Island most in need of the stimulus of the Government’s regional development policy were doing better, in the first quarter of this year, than the remainder of the country. Applications to the building projects authority — whose approval is required for any project worth more than $20,000 — are a good “leading indicator” of investment trends. Analysis of these figures shows a perceptible trend towards more investment outside the four largest centres of population — Auckland, Waikato. Wellington and Canterbury. i These four areas accounted for 87 per cent of the total value of applications to the building programme in January this year, but only 74 per cent in July; since then the figures have been 84 per cent in August, 80 per cent in September and 78 per cent in October. Wellington — the district hardest hit by the controls — accounted for 25 per cent of the national total in January, but only 16 per cent in October. The Government earlier talked about possibly extending building programm-

ing. (inis was a question put to the Building Industry Advisory Council before the Budget, and reported in that document).With tightening liquidity, and other steps since taken to direct property investment away from commercial construction into housing and factory building, that might no longer be (necessary. I But one Ministerial stateiment which seems not to [have attracted any remark is (one last, month by Mr Freer. I NEW FACTORIES Speaking at a productivity seminar at Lower Hutt, he said the Government would do everything it could to prevent large industrial plants being built in the three main centres. “We believe that at present it would be idiotic to encourage large-scale expansion in those centres,” he said. I One way in which the Government could effectively impose such control would be to direct the building programmer (Mr P. G. Walker) to implement it. It has not done so. In any event, Mr Walker says that it will take about two years before the Government’s previous moves to direct investment from commercial construction to housing will begin to take effect. It might take as long to implement a regional policy at that level. It required the tabling of the Budget before anything more than a broad outline of the Government’s plans for the regions was seen, and many weeks elapsed before the details were filled in. : The Development Finance: Corporation was unsure, of its role for months, and Mr McGuigan’s statement on the unit rate freight concession did not come until last month. COAST INQUIRIES At the beginning of October, the West Coast Regional Development Council reported that it had received 42 inquiries since it was set up in April. Nearly one-third of the approaches fell outside the provisions of the scheme. This week, the Department of Trade and Industry has 30 or more applications under consideration. It acknowledges the delay in implementing the programme, but feels that its task is now largely a routine, administrative one. “The investment decisions are being taken now, in places like Otago where previously they were not being taken,” said a spokesman, indicating satisfaction with that turn of events.