Gloomy outlook for rural regions, says report

Press, 26 December 1986, Page 3

Gloomy outlook for rural regions, says report

PA Wellington A gloomy outlook for the provinces, especially East Cape, Southland, and Northland, dominates the Ministry of Works and Development’s report on the regional impact of the Government’s economic policies. The Ministry’s mid-year development review, finished five months ago, but not made public until now, also warned that the downturn in farming and manufacturing will soon hurt the cities.

The Ministry drew on its wide network of regional offices to survey a range of sectors throughout New Zealand.

The resulting report has been buried since July and criticised by a team of Government officials.

“While the prognosis for rural regions generally is unfavourable, it is particularly bleak for the East Cape and Southland, whose very narrow economic bases are under pressure and Northland, where the completion of the Marsden Point expansion removes the prop to much of the region’s recent economic and population growth,” the review concluded. The sharp downturn in manufacturing was leading to job losses in cities. The review questioned how long the boom in the financial sector would compensate for the decline in the export industries. “Growth in service employment cannot automatically substitute for

jobs lost in agriculture and manufacturing,” it said.

The service sector required more part-time and female workers with different skills and so there was a mismatch between the new jobs arising and those being lost.

The Government’s reforms of the Public Service would probably end what had been a big source of employment growth over the last decade, particularly in the rural regions, it said. The Ministry foreshadowed big social problems in the provinces as farmers, especially in the North Island hill country, abandon marginal land.

In a section called “Views from the regions,” the review said that a disturbing range of busi-

nesses might close. These included fertiliser works, a meat plant, and railway branch lines in the Wanganui district and shipbuilding in Otago. Nearly 20 businesses closed in Canterbury, it said. Many saw the need for the Government’s long term economic plan but fear that it will fail unless transitional problems are addressed.

In summary, the Ministry said the regions were preoccupied with the effect of the Government’s economic policies on exporting. “There appeared to be general difficulty in accepting that things would continue as they are at present, or that the winddown in the pastoral and related activities might be permanent.