'Huge' leadership needed to turn economy around

22:21, Feb 21 2013
 Langley Cavers
Hauraki District Council chief executive Langley Cavers.

The man driving the first steps to turning around an underperforming  Waikato economy  says ''huge'' business leadership will be needed.

Hauraki District Council chief executive Langley Cavers, on behalf of the Waikato Regional Council and the region's mayors, is now scrutinising ''multiple'' responses to a call for tenders for a project manager to devise a strategy by the end of the year to lift the region's economic performance.

While the successful tenderer will write the strategy supported by staff from the regions' local authorities, Cavers said the initiative must be ''business-led''.''For the Waikato, it has to be Waikato Inc. We need to come together to make the boat go faster. So councils need to work together, but it has to be business-led.''

The Waikato is New Zealand's fourth largest regional economy, accounting for around 10 per cent of land area and population and 8.5 per cent of gross domestic product (GDP).But despite leading the country in several sectors, including minerals and electricity production and dairying, the region's GDP per capita in 2011 is, at $40,000, around 9 per cent lower than GDP per capita nationally, a study by the regional council has found. 

Waikato's median weekly household income is higher than only three other regions the study found. The median income increased from 1998 to 2011 at a lower annual rate of 3.4 per cent when the New Zealand median was 3.8 per cent.

The study also concluded the level of social deprivation is ''slightly worse'' than New Zealand as a whole.The Waikato Mayoral Forum in September agreed to establish a committee to address the issues.


Where business people will be urged to show leadership is in a governance group yet to be formed to drive the strategy put together by the project manager.The group will have 10 members made up of four regional business people; two regional Maori business representatives and four people from the mayoral forum.

Cavers said the total budget for the strategy development was $170,000, not including council staff time. He would not say how many parties had tendered to manage the strategy project, and could not say what business leaders might be shoulder-tapped. Fifty per cent of a tenderer's application would be judged on price, he said.

The balance would be appraised around the quality of their ideas and proposed approach.An economic strategy was done for the region in 2008-2009 but ''did not tick all the boxes'' and did not propose the strong business leadership role being called for today.

Why the region was underperforming economically was not clear, Cavers said.

The strategy would not seek to answer that, but propose a path for improvement.

The regional council's economic report found Waikato's central location between Auckland, the Bay of Plenty, Hawkes Bay, Manawatu, Whanganui and Taranaki made it a nationally significant corridor for infrastructure such as road and rail transport, electricity and natural gas, telecommunications and data.

Waikato is the most important minerals-producing region in New Zealand, with significant mineral exploration and development operations including coal, aggregates, gold, sand and limestone.

It is also the country's most important dairying region, accounting for more than a quarter of milk supply to the export sector. 

Waikato is New Zealand's premier electricity region, generating more electricity than any other single region in the country. It has almost 40 per cent of installed generation capacity.Almost 60 per cent of electricity produced in the region is from renewable resources and 75 per cent of New Zealand's known geothermal resources are located here.

Almost a quarter of total national freight movements by land in New Zealand travel within, to, from or through Waikato - 51 million tonnes out of a national total of around 225 million tonnes.Waikato has more heavy commercial vehicle movements per day than any other region. It has 16 per cent of the national stage highway network at 1740 km.

 Around 16 per cent of all rail freight traffic in net tonne kilometres travels on Waikato rail lines. The value of international exports from Waikato region in 2007, the latest data date available, was nudging $2.4 billion. Nearly 40 per cent came from Hamilton city. The value of Waikato's exports to other parts of New Zealand in 2007 was $4.4 billion.

More than 80 per cent was dairy products. As 95 per cent of New Zealand's dairy products are exported, it stands that most Waikato product was also exported overseas.