Labour close to taking stance on devolution

20:54, Jul 24 2013

Could it be true that after the next election unsuspecting citizens of some of our sleepier provincial towns will hear those fateful words: 'We are from the Government and we are here to help.'?

Labour, led by its spokesman Shane Jones, is putting a deal of effort into a regional development strategy that includes as a key - but by no means the only - component a proposal to devolve some government activities away from Auckland and Wellington.

In some ways it is back to the future.

It was a popular cause in the 1970s and 1980s with Avalon standing as a not particularly encouraging landmark. Cynics also point out that if devolution made it from the Beehive only to the Hutt Valley it still had a long way to go.

Since the departure of Alliance leader Jim Anderton - perhaps the most enthusiastic champion of regional development in recent years - it has languished down the back of most political manifestos.

Now Mr Jones, along with a small group of fellow provincial MPs including West Coast-Tasman's Damien "Chainsaw" O'Connor, is pushing hard through the caucus economic committee for a revival of the idea of shifting some government functions - even some head offices - to the provinces.


(Deputy leader Grant Robertson, from the perspective of his Wellington Central electorate, is believed to be a standout sceptic for understandable reasons. Nor is the state sector union, the PSA, keen.)

Prime Minister John Key caused a brief flurry after he made some soothing noises at this week's local government conference, under pressure from Otorohanga Mayor Dale Williams, saying it should not be ruled out. But the reality is that National is unlikely to go there, leaving the devolutionary field open to Labour.

National's view is that most communities will not see a government department rolling into town as a regional development policy. Instead, led by Economic Development Minister Steven Joyce, they are keener on finding ways to emulate the success of Taranaki's oil and gas boom or Southland's expanding dairy industry.

Many of those options - such as exploration off the East Coast - can create "political heat" but from the Government's viewpoint have much greater potential to generate growth.

National trumpeting the state sector as an answer to provincial growth and job creation would be close to self- parody. Cuts to state employees in regional offices, particularly to Inland Revenue offices, have had as profound an effect as the cuts in Wellington - but without the headlines.

Also, Mr Key may not want to revive memories of his regretted and regrettable comments about Wellington "dying" and head offices decamping by adding a few government agencies to the list of capital refugees.

There are other dynamics at play that cut both ways.

For instance the internet, and the Government's push for greater online provision of services, both centralises services and makes them less reliant on any particular location.

If you are renewing a passport online, it hardly matters whether the application is being processed in Wellington or Whangarei.

Labour's thinking - currently in its very early stages - is that shifting, say, the Ministry of Agriculture to the Waikato region, the Department of Conservation to Dunedin or the oil and gas activities of the Business, Innovation and Employment Ministry to New Plymouth could make sense.

It could bring activities closer to the people most affected, boost the local economy through extra wages, reduce transport costs and lower overheads such as the cost of office space.

At the margins it might also lower the pressure on house prices and transport routes in Auckland while better-utilising existing infrastructure in smaller cities and towns. (Mr Key made a nod in the same direction in his mollifying words to local government representatives on Tuesday.)

Labour is looking at the overseas experience, to see what might work here.

The evidence is mixed at best. A Northern Irish experiment, started in 2003 but wound up after the global financial crisis, identified short-term pain, such as the loss of expertise and employees reluctant to move.

Long-term gains included cost savings, the "multiplier" economic effect in the new location and a better balance across the economy.

But shifting government departments into the regions can also bid up wages and see public sector demand drive out private sector employment.

There are also strong arguments for keeping at least the top tier policy wonks clustered in the capital where they can operate cheek by jowl with each other and with the government - and for that matter the opposition - that is setting policy.

So if Labour does adopt the policy, win the election and the bureaucrats do come to help, expect most of the higher paid ones to stay in Wellington - and to argue they should stay there too.

The Dominion Post