Special economic zones

Stuff reports:

New Zealand does not capitalise on its regional potential and should create special economic zones for a better approach to policy-making, a new report has found.

The New Zealand Initiative has proposed creating special economic zones that would see policy changed for regions that ask for it, and need it, but not in others.

The public policy think tank report, In the zone: creating a toolbox for regional prosperity, says special economic zones could pilot policy reforms, with successful policies rolled out more broadly.

Allowing a more regional say on policy reform would not only let cities and regions find the policy solutions that work for them but would also act as case studies for other regions.

I hope the Government legislates to allow this. By having different policy settings in different regions, we could measure the impact of those policy changes – which will have beneficial impact of the rest of NZ.

The report highlighted China’s Shenzhen as a spectacular success, which showcased the possibilities of special zones.

Anyone who doubts the powers of a special economic zone should visit Shenzhen.

The SEZ was established in 1979. Back then Shenzhen was a town called Sham Chun Hui. It had a population of 30,000. So think of it as Timaru.

Today Shenzhen has a population of almost 11 million and GDP of US$261 billion – around 50% greater than all of NZ. And under 40 years ago it was a Timaru.

“Trying policies in limited areas and assessing whether they work would allow New Zealand to harness the advantages of federalism in encouraging policy innovation, but within a unitary state …We propose giving councils a bigger stake in economic growth … Councils will be able to identify barriers to their own growth that neither we, nor the Wellington bureaucracy, have thought of,” the report says.

Local Government New Zealand chief executive Malcolm Alexander said special zones were not new to New Zealand –  in essence special housing areas in Auckland and the Canterbury Earthquake Recovery Authority (CERA) were already special zones, he said.

Special zones deserved serious consideration and were one of the 10 proposals outlined in the Local Government Funding Review to incentivise stronger economic performance in regions.

The right resources and incentives must be in place to enable growth and a special zone would be a useful instrument to drive a better alignment between unlocking regional opportunities and achieving national economic objectives, he said.

If Labour wanted to be bold, they’d announce this as policy.