Unlocking New Zealand's Potential: The Power Of Localism Through City And Regional Deals

New research from The New Zealand Initiative suggests city and regional deals could be a key to unlocking New Zealand's economic potential and boosting living standards across the country.

The research note, "City and regional deals", draws on the Initiative's previous work on localism and international best practices to explore how partnerships between central and local government can empower communities to tackle their unique challenges and seize opportunities for growth.

"For too long, our councils have borne the costs of growth while the benefits flow almost entirely to central government in Wellington," says Dr Oliver Hartwich, Executive Director of the New Zealand Initiative. "It's no wonder many seem unwilling or unable to embrace much-needed development, reinforcing perceptions of incompetence and lack of focus."

One solution, according to the Initiative, lies in the localist approach embodied in city and regional deals. These formal agreements align various stakeholders - central and local government, businesses, tertiary institutions, iwi - around shared strategies and investments tailored to a specific area. Crucially, they provide a pathway for devolving powers and funding to the local level.

"International experience shows the transformative potential of city and regional deals done well," says Nick Clark, the Initiative's senior fellow and author of the research note. "They've enabled coordinated investments in infrastructure, skills, and economic development, catalysing growth and improving quality of life."

However, the Initiative cautions that making local deals work in New Zealand will require rebuilding trust between central and local government after years of top-down impositions and unfunded mandates. Capability and capacity gaps in many areas pose additional challenges.

"We need to give councils skin in the game by letting them share in the benefits of growth through better funding tools," says Clark. "But in return, deals must be carefully designed with strong accountabilities to keep all parties focused on delivering results."

The New Zealand Initiative believes localism, embodied in the form of city and regional deals, is the key to unlocking New Zealand's potential. Communities across the country should be empowered to chart their own paths to prosperity.

The full research note is available on The New Zealand Initiative's website.

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