Going for growth – delivering outcomes for people and places

Introduction

Local government is under immense pressure – a perfect storm of financial, structural, and political challenges. At the same time, central government is sending strong messages that we need to go for growth. However, with growth in mind, local government has a unique role to play in translating national priorities into tangible socio-economic outcomes for people and places.

In this article we explore the importance of place-based development which is aligned with the role of councils in supporting “local economic growth and development”, as signalled by the Local Government (System Improvements) Amendment Bill.

Challenging times for local government

New Zealand has one of the most fiscally centralised systems of government in the OECD, yet councils are facing increasing demand for services and infrastructure. Rates remain a primary source of revenue, but raising them is politically and socially sensitive. Despite repeated calls for alternative funding mechanisms, progress has been slow. Local government is expected to do more, with less, while being offered few tools to respond to the growing needs of their communities.

The removal of the four well-beings from the Local Government Act signalled a push for councils to focus on ‘core services’, with an implied expectation to reduce involvement in social, cultural, or well-being-oriented work. This shift risks devaluing the critical role local government plays in shaping cohesive, connected, and resilient communities.

These pressures have created a difficult and at times contradictory operating environment, with councils being asked to respond to more complex challenges, including climate adaptation, housing growth, and economic transformation, while being restricted in their mandate, their funding, their ability to plan with confidence, and now having to stop work on plan changes and regional policy statement reviews.

Going for growth

Central government is clear on the focus on economic growth, boosting productivity, enabling private sector investment, and removing perceived barriers to development. These are important and legitimate priorities, but growth alone does not guarantee better outcomes for people or places.

A narrow growth focus, without a clear social mandate can lead to fragmented communities, rising inequities, and disconnected infrastructure. It also risks overlooking the distinctiveness of place; the very things that make communities liveable, attractive, and resilient. If housing supply is prioritised without investment in social infrastructure it can place strain on already stretched local systems. Similarly, pursuing major infrastructure investment without strong local partnerships risks delivering projects that are misaligned with community needs and aspirations.

Sustainable, inclusive, and meaningful growth requires a genuine partnership, recognising the value of place leadership, investing in local capacity, and providing the flexibility for councils to respond to the opportunities and challenges faced by their communities.

Growth with lasting value can only be achieved by working with and alongside communities, not as something simply ‘delivered’ to them. That means genuinely listening to local voices, embedding te ao Māori perspectives, and ensuring that planning and investment decisions reflect the lived realities of our diverse population.

The importance of place

The characteristics of a place—its geography, infrastructure, cultural identity, natural assets, and built environment—directly influence the types of industries that can thrive, the attractiveness of the area to investors and talent, and the quality of life for residents.

Local government plays a critical role in enhancing place-based attributes through strategic planning, investment in public spaces, community events, transport connectivity, and support for local businesses. A well-developed sense of place can foster innovation, attract visitors, and create vibrant hubs of activity that reflect the community’s values and aspirations.

A place-based approach encourages inclusive growth and enables councils to tailor policies and programmes in ways that resonate with the local context. By leveraging the distinctiveness of place, New Zealand’s local government sector can build resilient economies that are better equipped to adapt to change.

The need for a localised approach

The importance of translating economic growth to localised benefits is recognised globally, and reflected in approaches such as ‘community wealth building’, which has also been advocated for in New Zealand by the Wellbeing Economy Alliance, and in approach that emphasise inclusive growth and shared prosperity, including the work of the Brookings Institution which has argued that:

“It’s time to shift and broaden the practice of economic development to generate continuous growth, prosperity and inclusion.”

In New Zealand, if we wish to put place at the heart of social and economic development, we suggest five areas that councils should consider:

1. Leveraging investment in infrastructure
2. Encouraging the growth of key local industries
3. Creating quality jobs for residents
4. Connecting local communities
5. Aligning, coordinating and organising to deliver.

Leveraging investment in infrastructure

There are opportunities to consider how best to leverage infrastructure investment to deliver local outcomes. This is crucial for place-based outcomes, laying the foundation for sustainable growth tailored to the unique needs and strengths of each community.

High-quality infrastructure enables local businesses to thrive, attracts new investment, and improves access to jobs and services. When infrastructure is designed with local context in mind, it enhances resilience, supports innovation, and fosters inclusive growth by connecting people to opportunities.

A good example of this approach is Te Utanganui, where local councils are leading collaboration to deliver a master plan for a new distribution hub and adjacent industrial land. By unlocking the economic potential of this central New Zealand location, Te Utanganui is intended as the linchpin of a resilient and future-ready national logistics network.

Growing key local industries

Local government is well placed to understand the dynamics of local economies and key industries and businesses that are critical to success and important sources of jobs for residents.

These existing industries and businesses often have deep local roots and are more likely to reinvest locally. Nurturing their growth can stimulate economic resilience and reduce dependency on external investment. This also helps retain talent and strengthen the identity and distinctiveness of a place.

Councils also must understand structural weaknesses in their local economy, and keep abreast of wider trends that could either enable or create challenges for businesses and communities.

There are already examples of where local government is playing this role, for example Queenstown Lakes District Council has led the development of an Economic Diversification Plan that recognises the need to broaden the district’s economic base away from an over reliance on the visitor economy.

Creating quality jobs for residents

One of the key areas of concern for local government is knowing that towns and regions have access to jobs and opportunities that retain workers and young people locally, allow people to support their families, and build resilient and safe communities. Creating quality jobs fosters economic resilience, reduces inequality, enhances well-being, strengthens social cohesion and reduces poverty.

The Mayors Taskforce for Jobs, is one example of local government working with partners to create opportunities and build workforce skills to address youth unemployment. In other areas, interventions such as Project Ikuna has supported Pacific workers to gain skills to enter, progress in employment, and be ready for the changing nature of work.

Connecting local communities

Connecting communities to jobs, housing, and transport is critical to achieving strong economic and social outcomes. When people can live near to jobs, and access affordable housing and reliable transport, they are more likely to thrive, keeping talent and spending within the local economy.

Through integrated spatial and economic planning, councils can ensure that housing is located near employment, that transport networks are efficient and accessible, and that infrastructure investments align with community needs. A good example of this is the recently adopted Te Pātukurea – Kerikeri Waipapa Spatial Plan, which sets a framework for coordinated urban expansion focused on existing centres and supported by infrastructure that is efficient, resilient, and more affordable.

Future Development Strategies and Regional Spatial Plans are key tools for guiding long-term, strategic planning, setting a vision for accommodating growth, identifying where and how development should occur and integrating decisions about land use, infrastructure, housing, and transport – ensuring that development capacity meets future demand.

Aligning, coordinating and organising to deliver

Local government also has a key convening role, acting as the connector between communities, businesses, and central government. Councils can tailor solutions to the specifics of place, aligning infrastructure, housing, transport, and workforce development with local needs.

By fostering partnerships, leveraging local knowledge, and coordinating others, local government enables more responsive, efficient, and impactful development that drives long-term prosperity.

This type of co-ordination has been a key feature of how the existing Urban Growth Partnerships have operated, from the Whaiora Grow Well Partnership in Queenstown Lakes, to the Wellington Regional Leadership Committee. These structures are supporting cross boundary coordination, regional economic development, collective decision-making and creating a platform for a stronger voice to unlock opportunities for partnership and investment.

Taking the reins

Sustainable, inclusive development cannot be achieved without strong, empowered local leadership. A genuine partnership that values local insight, invests in capability, and aligns national ambition with community need. Without it, we risk a growth model that does not reflect the unique character of local places and is not sustainable over the longer term.

Local government has the knowledge and insight to ensure that growth is inclusive, resilient, and locally meaningful. By embracing place-based approaches, councils can translate these national ambitions into tangible local outcomes. The path to long-term prosperity lies in recognising that economic and social development is most effective when it is grounded in the lived realities of place.