Hawke’s Bay airport gets a Crown loan whereas an innovation park in Northland gets a PGF investment (much more money, too)

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While National’s Todd Muller was thinking hard about his future as leader, the government was getting on with the job of governing and redistributing taxpayers’ money.

At least, we presume that’s what Muller was doing .  He was also giving a highly instructive  lesson in how to keep a secret and prevent leaks – it’s done by not telling anybody.

Shane Jones, in contrast, wanted to the whole world  (the voters of Northland, at least) to hear his news that more millions are being poured into his home patch.

Hawke’s Bay was the beneficiary of a favourable funding decision, too, but in its case the money is a loan.  In Northland it’s an “investment”.

It’s not immaterial, furthermore, that in the Hawke’s Bay case the money is being loaned to a company in which the government is the major shareholder.

Deputy PM Winston Peters and Finance Minister Grant Robertson announced the Crown will lend money to Hawke’s Bay Airport for the same reasons inevitably trundled out these days to justify government funding decisions – the loan is  “to ensure it can trade through COVID-19 economic impacts, support the region’s recovery and protect up to 200 jobs”.

The Crown has a 50 per cent shareholding in Hawke’s Bay Airport Limited; Napier City Council holds 26 per cent and Hastings District Council 24 per cent.

The airport requires financial support of up to $9 million due to reduced passenger numbers and revenue due to COVID-19. The Crown will loan up to $4.5 million on commercial terms, while the councils provide up to a further $4.5 million.

“It’s important that we retain an important regional asset which will enable the Hawke’s Bay to stay connected and support the recovery of the domestic tourism and aviation sectors,” Winston Peters said.

“Hawke’s Bay Airport experienced a significant drop in revenue due to COVID-19. The request was made to shareholders to provide financial support to ensure the airport remained viable and to allow completion of the terminal redevelopment, an important part of the airport expansion project, which was started before the onset of COVID-19.”

Grant Robertson said it was appropriate for the Crown – as the major shareholder in Hawke’s Bay Airport – to provide a loan to support cash flow.

“This ensures the terminal redevelopment can proceed, protecting up to 200 jobs including those of contractors already working on the project. As a Government we support investments that will help our regions and local economies to continue their recovery and to rebuild.”

The loan is expected to be repaid within two years and is considered fiscally neutral.

There will be no impact on net core Crown debt over the period of the loan, and the capital expenditure associated with the appropriation will not impact the COVID-19 Response and Recovery Fund.

But $4.5 million is small change to the generous Jones.

Wearing his Regional Economic Development hat, he announced the Provincial Growth Fund is providing up to $19.5 million to boost innovative primary sector businesses and create training and job opportunities for Northland locals through the construction of an innovation and enterprise park at Ngawha.

The  investment will go towards finalising pre-construction work at the site near Kaikohe and building infrastructure and services such as earthworks, roading, water and power.

“The construction of the Ngawha Innovation and Enterprise Park will be a major infrastructure project for the region which could change the lives of many locals in an area of high economic deprivation,” Shane Jones says.

When stage 1 of the park is up and running it is expected to provide around 250 new full-time jobs and 50 training roles a year. These numbers are expected to grow to around 500 as further development takes place.

The park, to be located on a 204ha former dairy farm, aims to bring together complementary businesses which can scale up manufacturing high-value primary sector products and invest in research and development.

“Like-minded, innovative businesses will create economies of scale through co-location at the park and benefit from new infrastructure and low energy costs. There are plans for the park to include an innovation and education centre to train and develop locals, and on-site labs,” Shane Jones said.

Building could start on the park this year, creating around 150 construction jobs.

Potential park tenants include businesses in food manufacturing, bioenergy, horticulture, research and development, and trades training for the production of low-cost, pre-fabricated timber social housing.

“This park, which has the backing of stakeholders including local iwi will be a game-changer for Kaikohe which has struggled to attract private investment in the past due to its relative distance, lack of infrastructure and trained workforce,” Shane Jones said.

At Point of Order we often wonder if Jones ever wonders why the factors that discourage private investors should be of no relevance to the people who decide on the prudence of a state investment.

Far North Holdings, the commercial arm of the Far North District Council, will receive the funding. The PGF provided $897,000 to Far North Holdings towards a business case for the park in 2019.

Release

13 JULY 2020

District Court Judge appointed

Stephen Clark, Māori Land Court Judge of Hamilton has been appointed as a District Court Judge with jury jurisdiction to be based in Hamilton, Attorney-General David Parker announced today.

Hon David Parker

Attorney-General

Release

13 JULY 2020

Hawke’s Bay Airport agreement protects jobs, safeguards terminal development

The Crown will provide a loan to Hawke’s Bay Airport to ensure it can trade through COVID-19 economic impacts, support the region’s recovery and protect up to 200 jobs.

Rt Hon Winston Peters Hon Grant Robertson

Deputy Prime Minister

Finance

State Owned Enterprises

Release

13 JULY 2020

Government backs Northland innovation and enterprise park

The Provincial Growth Fund is providing up to $19.5 million to boost innovative primary sector businesses and create training and job opportunities for Northland locals through the construction of an innovation and enterprise park at Ngawha, Regional Economic Development Minister Shane Jones announced today.

Hon Shane Jones

Regional Economic Development

 

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