Strength Of Provincial Growth Surprises Minister

Finance Minister Bill English said today the latest regional trend reports for the second half of last year showed surprisingly strong growth in the provinces.

"The latest National Bank regional trends report shows that some regions, including Waikato, Hawke's Bay, Manawatu-Wanganui, and Southland, recorded their strongest growth for many years. All but one of the regions recorded a rise in economic activity in the last quarter of the year, with the South Island growing faster than the North Island for the second consecutive quarter.

"The report indicates that the improvement is being driven by the retail sector which is a good sign that people's confidence is up and that is very welcome.

"However, we need to keep our feet on the ground. While this growth is surprisingly strong, the export part of regional economies is still flat because of low commodity prices and the effects of drought in many provincial areas may yet start to bite.

"Without a doubt, sustained economic growth is the best way of boosting the regions because everyone shares in the gains.

"Plans like the Labour Party's regional development fund will not have the same sort of positive and long term impact. Most of this fund will go to Auckland and what is spent will go to a few people only as a subsidy for their business.

"The provinces will do well if we can consolidate the gains made over recent months," said Mr English.