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Small experiments, big results!

“On the one hand, we are really good at making better physical technologies. Cell phones always get better, computers always get better, cameras always get better. On the other hand, you have these social technologies, the ways in which we organize ourselves, our governance systems. These are not subject to entrepreneurial trial and error. In fact, they’re essentially locked away from competition and innovation.” – Zachary Caceres, Startup Cities

On the 19th of October, the New Zealand initiative held a panel discussion to launch its latest report: In the Zone: Creating a toolbox for regional prosperity.

The immense support we’ve received from government, local councils, MP’s and our own members in just a few weeks has been incredibly encouraging. It shows that there is a very real interest in improving regional growth and decision-making.

The key principle of the report is pretty simple: allow tailored policy reform to be trialled first within regional special economic zones. Regions themselves should identify what policy changes they need in order to achieve the kinds of growth they want. This way, any policy changes implemented are much more likely to be successful. Improving the incentives and modifying the finance structure to give local councils a cut of increased growth encourages smart local decision making.

The panel consisted of investment banker Rob Cameron, National MP Chris Bishop, New Zealand First MP Ron Mark and Labour MP Clare Curran. It was encouraging to see all four panellists endorse the idea in one form or another.

Rob Cameron praised the report’s creative solutions for encouraging stronger growth in the regions. “It is a low risk approach that respects local differences” Cameron said. “This report is about recognising shared objectives, finding innovative solutions and setting the right incentives.”

Ron Mark, former mayor of Carterton in the Wairarapa, knows all too well the limitations of centralised policy-making:

“All of our regions are different, that’s why the Wellington mega city plan didn’t work. It’s about innovative approaches…and having the balls to go ahead and do it.”

Wider support for the report from around the country has been as exciting. Representatives from various local councils have endorsed the report’s recommendations and the greater flexibility it could give them. They especially welcome the suggestion for policy that is better tailored for local needs.

Queenstown Lakes District Council CEO Adam Feeley suggests that special economic zones in Queenstown could be used to help with infrastructure costs.

“We have 200 times more visitors that other towns in New Zealand,” Feeley said. “Even compared to towns like Taupo or Rotorua, we are off the scale.”

Tweaking the revenue sharing mechanism so that Queenstown get a share of the GST from increased growth could go a long way to help alleviate the costs of growth. This would enable Queenstown to invest more in infrastructure and the local economy.

Support has also come from Gisborne Mayor Meng Foon, who will suggest to Minister Stephen Joyce that the Tairawhiti district be seriously considered as an area for testing tailored policy reforms:

“We have huge potential — we need to put this potential into action. We live in paradise and I would love our people to have a higher income. That is my reason for supporting a special economic zone for Gisborne/East Coast.”

The report has also had an incredible amount of support from Local Government New Zealand. “This innovative report is about leading a principled discussion with our key partners around more fit-for-purpose funding options,” said LGNZ President Lawrence Yule.

“It outlines the way forward for regions to address location-specific policies and regulations, and provides the right tools and incentives to meet environmental and economic goals and minimise barriers to growth.”

LGNZ includes the proposal as the first key point in their recent Local Government Funding Review 10-point plan.

The ACT party issued a press release welcoming the report. “Letting local authorities opt in or out of certain policy settings could provide a low-risk alternative to the one-size-fits-all regulatory approach,” said Party Leader David Seymour.

“Different parts of the country have different regulatory needs and desires. A classic example is RMA reform. With broad reforms stuck in a political stalemate, why not test the appetite for narrower, regionally adjusted policy?”

Clearly, one-size-fits-all policy is not working. Far too often the result is policy that is one-size-fits-none.

Creating special economic zones for testing policy reform could lead to much more effective policy change that actually recognises regional diversity, whilst at the same time, minimising risk. It encourages a more collaborative approach to policymaking, better aligning the goals and incentives between central and local government.

The positive response to the report within only three weeks of it having been released it both humbling and encouraging. But now it’s time to really get the ball rolling.

So, where will the first special economic zone be?

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