Local Government New Zealand (LGNZ) welcomes a report released today by the New Zealand Initiative stating why the resource rich parts of rural New Zealand need to tap into the wealth beneath their feet.

The report, titled Poverty of wealth – why minerals need to be part of the rural economy, observes that regional parts of New Zealand experiencing economic and population decline may have significant opportunities in mineral wealth.

LGNZ President Lawrence Yule says the report outlines the shift between the growth of urban New Zealand and the challenges of rural New Zealand – and looks at ways to lift the economies of rural areas through mineral extraction.

“This report supports the need to address regional growth across all of New Zealand and with the work LGNZ is doing to advocate for the case that local communities share in mining royalties in the region where extraction occurs,” says Mr Yule.

In September, LGNZ ran a seminar – Royalty payments: the case for a local share – seeking a policy change for the distribution of a share of royalties from mineral, oil and gas extraction to the communities where the activity takes place.

“Every year the Government receives hundreds of millions of dollars in royalty payments for oil, gas, coal and mineral extraction in New Zealand. These payments are, in part, made possible by the regions which provide much of the infrastructure and housing needed to support these industries.”

This point is reiterated in the New Zealand Initiative’s report which states since all royalties and taxes from mineral projects accrue to central government, there is little means for local government to defray local borne costs – hardly an incentive to embrace mining development.

The report also states that a strong barrier to rural mining lies in the unintended consequences of central government’s Resource Management Act (RMA).

“The RMA holds many barriers and does not enable planning nor provide the right incentives for business and economic growth,” says Mr Yule.

“LGNZ supports sensible reform of the RMA. The plan making and consenting processes are complex, costly and inefficient and reform needs to enable effective and reliable decisions so that benefits can be more quickly realised.”

“RMA reform is a high priority for LGNZ and we are keen to work with central government to resolve the issues for the betterment of all New Zealand communities.”

The newly released report states that while rural New Zealand faces significant headwinds, encouraging responsible mining that garners community support is one possible means of reversing this economic decline. Regional development is of high importance for today’s New Zealand and this is a conversation that needs exploring.