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What does the new government mean for NZ Councils?

Local government business cases

Kerry Boyle, Structured Conversations Associate, gives his take on what the new government means for Councils looking to secure government and overseas funding for local projects.

This week has seen the announcement (finally!) of a new government, which presents some interesting changes for Councils, with the introduction of a new economic development fund and the renegotiation of key trade agreements.

A renewed focus on regional economic development

The incoming Labour-led government will introduce a $1 billion Regional Development Fund to unlock economic potential in as many regions as possible.  This includes working with Whanganui District Council to redevelop the city’s port, investing in factories in Gisborne, developing New Zealand’s primary sector, ensuring sustainable fisheries, growing the forestry sector and restoring a rural affairs voice at the Cabinet table.

Strategic planning and business cases will be critical

This regional focus represents tremendous opportunity for New Zealand Councils. Securing your share of the benefits will require a clear and shared understanding of what Councils and communities want for their future. Successfully obtaining funding and delivering results will depend on Councils defining and agreeing a strong set of shared objectives, based on a deep understanding of local and regional issues and drivers.

Councils will need to commit to mutually agreed measures and indicators to chart and evaluate meaningful progress. It is likely that feasibility studies and business cases will be required to acquire significant investment.

The Chinese are coming!

A parallel opportunity currently exists with the impending NZ-China Mayoral Forum in December this year. A strong community vision and set of clear strategic objectives will ensure Councils are in a strong position to identify and seize opportunities as they are presented in Wellington over the two-day forum.

The NZ-China Mayoral Forum is a product of the NZ-China Free Trade Agreement (FTA), which was negotiated under a Labour-led government in 2008.  The renegotiation of this FTA will now also take place under a Labour-led government. This suggests that the FTA renegotiation will strongly align with the government’s regional economic plans, so Councils should expect to see more trade and investment with China at this level.

The Maori economy is a force to be reckoned with

With the incoming government comprising all seven Māori seats, this could be another boost for the regions.  The NZ-China Mayoral Forum follows the Taniwha Dragon Economic Summit held in early 2017, where $138 million in deals between Māori and Chinese companies was achieved over two days. These deals will grow the Māori economy (currently valued at around $41 billion) and further strengthen Māori ties with China, which received 41 percent of Māori authorities’ total exports by value in 2015.

A recent University of Cantebrury study found that the growing Māori economy is driving Māori businesses to seek commercial opportunities with Chinese partners both in China and New Zealand. Further, Ministerial-led Māori trade missions to China have provided the needed leverage for Māori businesses to enter the Chinese market.

Councils keen to support business success with China can learn a lot from the Māori way of doing business with China. Māori and Chinese share a similar set of cultural values that influence business partnerships, including whanaungatanga  (relationships and kinship bonds), utu (balance), koha (gift and contracting) and mana (authority).  Māori emphasise building relationships with business partners, with short-term success often taking a back seat to developing mutual understandings.  Similarly, Chinese guanxi stresses the importance of building relationships that emphasise implicit mutual obligations, reciprocity, and trust.

For both Māori and Chinese, these ties translate into extensive power in shaping of business operations, and are a critical source of social capital and strategic advantage for business success. Through guanxi or whanaungatanga, utu, koha and mana, businesses receive insider information, raise their awareness of specific government policies, and gain exclusive access to resources.

Working together will become even more important

Achieving economic and social goals for local communities and maximising the opportunities offered by the new government and overseas investors will undoubtedly require Council, iwi and industry to work together. Critical to these partnerships will be a shared set of objectives that are geared toward mutual benefit, enabling strategic alignment between this partnership and overseas counterparts, who will have their own strategic goals.

Help is at hand (aka, a shameless plug)

Structured Conversations specialises in this space. Using structured techniques and international standards we work with Councils and community stakeholders to quickly and accurately understand economic and social objectives, identify barriers and formulate targeted strategies for success.

Our recognised industry experts can support your iwi, Council or business to prepare compelling strategic assessments and business cases, positioning you to secure funding and deliver benefits to your community.

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