Regional policy of Govt explained

Press, 5 August 1977, Page 21

Regional policy of Govt explained

By

OLIVER RIDDELL

Regional development has been in the news recently. It was allocated S43M in the Budget for 1977-78. compared with an allocation of $5.1 M last vear (of which 53.7 M was spent), while the head of t h e department of accounting and finance at Otago University (Professor T. K. Cowan) gained some prominence with his call for a lower tariff for South Island electric power.

The Minister of Regional Development (Mr Gair). who is also Minister of National Development. has said that the declaration of the whole of the South Island as an area deserving regional development is not on, even if a special case could be made for some activities in the South Island.

Just what is regional development? Mr Gair considers it will occur naturally, with or without Government intervention, either positively or negatively, through the operation of demographic, social and economic forces. If it is allowed to occur unregulated, then there will be costs to be paid — slums, congestion, a more impersonal way of life, greater Costs of services to greater population concentrations, and others. In an interview with ' The Press.” Mr Gair said there had to be a balance between the economies of scale achieved by allowing unrestricted growth, with the resulting few population centres, and the social and economic costs these posed for the individuals within them and the country as a whole. If the Government could encourage an element of decentralisation to main-

tain a greater number of viable centres than otherwise, then it could hope to gain some benefits from this and avoid most of the disadvantages. Mr Gair saw strong justification on economic grounds for regional development. Deficiencies in the pricing system in some parts of the economy meant that true costs and benefits were not always reflected in market prices.

Some market information, such as resource development opportunities and compensating locational factors (quality of work, community support, and others), was not widely available or was insufficiently understood.

The results of this included high social and economic costs of the continuing concentration of industry or population in fast-growth areas accompanied by under-used facilities and untapped development opportunities in slow-growth areas. By overcoming such problems. real economic growth could be increased.

There was also the question of encouraging regions to contribute to, as well as receive support from, the fruits of national development. Regional development assistance aimed to remove impediments to development so that affected regions moved towards self-sus-taining growth, which integrated regional development into national development. Without regional development programmes, morale would suffer, with a consequent reversion to under-using resources. Mr Gair said. This would compound the already

existing lack of balance in growth between regions. , The social grounds for regional development were less easy to measure, but it was desirable to support individual and community development by having a range of opportunities in the smaller centres and giving an alternative to the urban drift, which could weaken the social structure of declining communities and overload the social structure of communities growing too rapidly. A more even distribution of industry and population was desirable. Mr Gair said that he was “not entirely satisfied” that the Government’s policies were achieving its objectives, but it had helped, and the Government was now shifting its emphasis from “regional maintenance” to "resource development” within the programme. The policies of central government could not guarantee the success of regional development: this depended equally on the activities of local people and organisations, particularly business firms. Moreover, it was in the nature of regional development, that policies and solutions should not be superimposed by the Government.

The Government had asked the regional development councils in the 11 areas designated for regional development to undertake resource surveys. Success would be measured by signs of increased growth in an area in its relation to national growth. If an area’s growth was negative, if it was shrinking, as the West Coast had for many years, then obviously the concept was not working.