Tag Archives: Stuart Nash

Where to now for regional economic development

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Economic Development in Hawke’s Bay is set for a big shake-up. However, Minister for Regional Development and local MP Hon. Stuart Nash is urging the region’s councils to have a new delivery model for economic development up and running faster than the proposed timeline of 12–18 months. He is also telling the councils they’ll need to contribute more money for it to be effective.

In February, all five councils across the region – Hawke’s Bay Regional Council, Napier City Council, Wairoa District Council, Hastings District Council and Central Hawke’s Bay District Council – agreed to complete a review by Giblin Group, at a cost of $40,000, which will further develop the preferred option of a Council Controlled Organisation (CCO). The proposed shake up and likely move to a CCO has brought to an end to Business Hawke’s Bay (BHB), an independent business-led economic delivery agency (EDA) but funded by councils. Following the decision by council’s to complete the review, BHB chair Stuart McLauchlan made the tough call to bring the organisation to an end after 11 years.

“The board has wrestled with this decision, as BHB has made a genuine and significant contribution to Hawke’s Bay over the past decade, delivering much needed services to the region’s business community and the wider economic development eco-system. “We are disappointed that we won’t be playing a part in the future economic development of our region and we’re sorry for the impact this decision will have on our people, who have given their all, and put up with considerable uncertainty for a long time.”

He says the board will now work collaboratively with Councils to try and preserve as much value and IP from BHB’s activities as possible; including its people and securing the future of the two Business Hubs, as well as BHB programmes serving start-ups, the food and fibre and hi-tech sectors, along with regional talent attraction and retention.  The date of the wind up will be determined as part of the transition arrangements to be negotiated with the Councils. BHB, which has also operated the shared Business Hub in Ahuriri since 2015, has received a total of $320,000 a year from the councils – just 3 percent of a total $10 million investment by councils. Hawke’s Bay Tourism receives 15.7 percent of the total funding.

The review recommended the disestablishment of BHB and the establishment of a CCO instead. The report also stated at least a further $1.6 million in funding was needed for it to be effective. It also recommended that the Business Hubs in Ahuriri and Hastings continue to be funded. Councils will now independently receive the final report before deciding how they will each participate and contribute to the delivery of economic development.

However, it’s likely that Hastings and Napier will be asked to stump up the most cash, with Wairoa and Central Hawke’s Bay ratepayers already expecting a significant rate increase.

In an exclusive interview with The Profit, Stuart Nash, who also holds the portfolios for small business and tourism, has put the acid on councils to have a new organisation structure, including the appointment of a new chief executive, within six months.

“Twelve to eighteen months is far too long. I can’t see why a new chief executive can’t be recruited within three months and a new organisational structure up and running within six. What this would require, of course, is for the councils to quickly agree on a new way forward and divert some of their current local economic development budget into a region-wide organisation.

“This is certainly what I would like to see as Minister. The region runs the risk of missing out (again) if we don’t have a highly functional EDA operating for 12 to 18 months.”   Stuart also believes the council’s current approach of operating their own economic development resources isn’t helpful and that a better coordinated approach is the best way forward.

“My understanding is that there is around four to five million dollars spent directly across the region by the various councils on economic development.

“As Minister of Regional Economic Development, I would like to see a more coordinated approach taken by councils across our region to economic development. So, it’s not so much a matter of money, but rather a strategic agreement – and then operational implementation – on the way forward that is of highest importance.   “The fact that around five million dollars is spent by the various councils on their own economic development strategies, and yet there is no regional EDA, is incredibly frustrating and counterproductive to regional economic growth.

“Let’s face it, if one of the Bay’s towns and/or cities does well, the whole region benefits.” Stuart also hopes that the councils consider the inclusion of the strongly performing entity Hawke’s Bay Tourism as part of the new economic development model. “Hawke’s Bay Tourism does a fantastic job and really stepped-up post-Covid to maximise the region’s tourism potential.   “There are around 15 EDA that also have the regional tourism organisation (RTO) incorporated within their operational structure.

“As minister for both Tourism and Economic Development, I have asked my officials to provide me with an analysis on the most optimal structure given the ability to compare the different models across the country.

“I am certainly not against the concept; in fact, I may well recommend this structure to the councils going forward.”

Stuart adds that Hawke’s Bay Tourism also has a high level of transparency and accountability back to the Hawke’s Bay Regional Council, whereas none of the councils have representation on the board of BHB and yet BHB demanded ratepayer money for operational funding.   “With regards to BHB, there was perhaps a disconnect between private sector and public sector understanding of the important role of key stakeholder accountability.”

Meanwhile, as this council consultation works its way through political decision-making and community consultation, Business Hawke’s Bay is likely to cease operating – either prior to or after the current funding ends in June – as well as leave much in limbo. Something that Minister Nash will keep a very close watch on.

 

Nash rolls sleeves up for SME’s

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There’s a new party running the country, Labour, and Napier MP Stuart Nash has picked up one of the most coveted and important portfolios – in fact he’s got two – Minister for Small Business and Minister of Police. We thought it was important to get Stuart’s views on how the government can support SMEs and what opportunities he sees exist for the Hawke’s Bay economy.

What’s your business background?

I have a Master’s degrees in law and management and have worked in sales and marketing for large corporates (Carter Holt and Fletchers) and elsewhere in the private sector. I spent seven years importing and trading petrochemical derivatives into New Zealand, Australia and Singapore and also worked in strategic development (writing business cases justifying capital development). So, rather wide and varied.

What do you think are the most common challenges for SMEs?


There are a number, and it often depends upon where we are in the economic cycle, what sector the company is in and how mature a firm is; however, the three that I have heard constantly are:

  1. Provisional tax – people tell me they hate the system!
  2. Access to affordable capital in order to grow and expand.
  3. Finding good employees. The new government is looking at innovative ways to address all three issues.

What role does government have in supporting SMEs?


First and foremost, we can change the law and alter the regulatory settings to make it easier to do business. For example, this year sees the introduction of the Accounting

Income Method (AIM) for paying tax for the SME sector. This is pretty much like PAYE for small-to-medium businesses (and I would advise all SMEs to ask their accountants about this). AIM should provide more certainty to SMEs around tax payments and make planning ahead much easier.

The www.business.govt.nz website also provides a treasure trove of advice to small businesses, from constructing an employment agreement to writing a business plan to paying tax and everything in-between. It really is a fantastic resource.

So, the government’s role can be anything from providing advice and support through to, for example, proactively helping companies develop new markets overseas.

What initiatives to support SMEs will you be looking to roll out over the next 12 months?

One that I can talk about is reconstituting the old Small Business Development Group into a body with a much stronger mandate to advise government, advocate on behalf of the sector and provide solutions to the issues that are important. I would like this body to inform the research that needs to be done in order to support change and also take a level of responsibility for information dissemination.

Then there is the AIM, which should make paying tax easier. I will absolutely be

pushing the NZ Business Number, which is an amazing initiative whose value isn’t well understood. This needs to change. There are a few other initiatives that we are planning but just can’t discuss at this point in time.

How do you think Labour and your success will be judged by SMEs?

Always a tricky one. For me, it has to be about ease of doing business. While everyone acknowledges there has to be a certain level of compliance, if we can remove unnecessary red tape and replace this with initiatives that actually make doing business easier, then we all win. Of course, there will always be businesses that fly and those that fail, but if we can help get more off the ground and minimise the number that crash, then we all do well.

What Hawke’s Bay business people and businesses do you admire?


There are the obvious high-profile ones like, for example, Rod Drury (Xero), Jenny Yule (Porse), Hamish White (NOW), Rob Darroch (FPG), Kate Radburnd (Pask Winery), Hamish Whyte (Furnware), Claire Vogtherr (Holly Bacon), John Bostock, Kirsten Wise, Kevin Atkinson, the Tremain Family and the Beatons. There are, however, many small, medium and large companies that do fantastic work in the Bay.

For example, we have just had some work done around our section and the quality of work from the excavation company through the team that put in the retaining walls and the firm that laid the concrete is absolutely legendary! I admire and respect anyone and everyone who is out there making it happen.

Who has been a mentor in your career?

I haven’t really had what I would call a mentor. There are a few people whom I have regularly sought advice from at various times over the years or who have been role models in terms of how they conduct themselves or the quality of their leadership, but no one stands out over anyone else.

How do you think the Hawke’s Bay economy is performing?


The local economy is doing extremely well. There are a few retailers and tradesmen who I talk to regularly in order to keep a track of how things are going. While it is completely unscientific, all report that spending is up, there is a lot of work on and there is plenty of people visiting and living here who have cash to spend. I remember talking to a group of young Napier entrepreneurs about three years ago, and they said that the major barrier to doing business in the Bay was the cost of airfares between Napier and Auckland. With Jetstar’s arrival, this has changed. We should not underestimate the value that Jetstar has brought to the region.

What general improvements could be made to keep the local economy strong?

More people moving here with money and ideas and businesses. We need to make Hawke’s Bay the ‘easiest place to start and run a business from in the country’.

Also, there aren’t many here who understand the size and potential of the Maori economy. Once all the settlements are concluded, I think the level of economic activity will increase. Already Ngati Kahungunu, under Ngahiwi Tomoana’s operational leadership, is a significant investor in the Hawke’s Bay economy, with the vision, power, resources, governance and operational skills – and mandate – to really make a significant difference.

While I can’t comment about the work of the Hastings District Council, I do think the Napier City Council has done some fantastic work over the last little while to really spruce the city up in an effort to once again turn it into a premium destination to visit, live and do business. Still plenty more to do in terms of reducing compliance and increasing advocacy and proactive support, but we will get there.

What investment model do you support for adding new infrastructure to the Napier Port?


I have yet to see the business case for any of the options, but I am keen to see the Port retained in local ownership (and there are a couple of ways this can happen while still meeting the requirements of the shareholders – you and me).

Do you see any water storage projects getting off the ground in Hawke’s Bay? If so, where?


Our economy is closely tied to three variables we have no control over: the weather, commodity prices and exchange rates. So in order to mitigate economic risk, we need to exercise control over that which we can control. Water is one variable that we can have a level of control over, thus mitigating the risk of damage due to adverse climatic events. I am, therefore, a fan of water storage. After listening to all sides, I came to the conclusion that the Ruataniwha Water Storage Scheme (RWSS) wasn’t the optimal model for the region. I am, however, a believer of the value of on- site storage and other innovative ways of capturing water that doesn’t cost the region close to $1 billion to implement. I await with interest the Hawke’s Bay Regional Council’s next step in this area.

How closely will you work with the Minister of Regional Economic Development?


Very closely. We are good friends as well as cabinet colleagues. I will advocate hard for any worthwhile project that I believe will add value to the region. There are already three that I have discussed with him that we will hopefully be able to progress. While I won’t win every battle, I will certainly push our case extremely hard.

In the briefing from the Ministry (MBIE), they talk about road shows, when is this likely for Hawke’s Bay?

It’s likely to be Thursday 7th June. Further details are to come closer to the time.