Govt set to announce special development deal with one city

Newsroom

28-06-2025

The Government is on the cusp of declaring its first 'city and regional deal' to unlock growth potential around one major centre – most likely to be Tauranga.
It hopes a deal can be a game-changer for the western Bay of Plenty region.
Two other centres, almost certainly to include Auckland and possibly Queenstown, are likely to be announced as next off the rank, priority deals to be negotiated through 2026.
Cabinet reportedly scrutinised on Monday officials' assessments of cities' so-called 'light-touch proposals', or applications for the unique central government-local government funding and planning deals for roads, housing and infrastructure.
A first, signed memorandum of understanding, to underline the coalition Government's commitment to 'going for growth,' had been listed in its latest quarterly action plan ending June 30, next Monday.
In February, cities and regions submitted their bids for the special government treatment, which could mimic some of the principles followed most famously by the UK government with Manchester.
Applicants had been urged to put forward up to five priority projects in their area that would unlock economic growth.
The expected deals would be long-term commitments by those cities, having consulted their private sector and local iwi, to pursue development that also meets central government goals.
While guidelines from the Internal Affairs Department to potential applicants said deals should rely on existing resources, rather than new funding, they said the agreements would set out a framework of how new funding could be used when available.
So Tauranga, which those close to the process expect to have made a compelling case for Wellington backing given its population, housing and transport growth, would not be in for an initial financial windfall
In March, the two ministers leading the policy, Infrastructure Minister Chris Bishop and Local Government Minister Simon Watts, said it was 'designed to help reduce New Zealand's infrastructure deficit through unlocking productivity, attracting investment and improving connectivity across the country.
'Delivering a joint long-term vision for regions will ensure they remain focused on delivering what matters most to ratepayers, including critical infrastructure like housing and transport.'
Watts said successful councils would need to show how each initiative would match other government priorities such as the Local Water Done Well reforms of water services.
One of the features of the deals will be that central and local government budgets and investment strategies will be synchronised to maximise the impact of resources.
Committee for Auckland director Mark Thomas wrote for Newsroom at the start of this government's term that more than 30 city deals were operating in the UK – some focused beyond infrastructure and housing. Edinburgh, for example, had struck a $600m innovation city deal with the Scottish and UK governments to accelerate productivity and growth by funding data-driven innovation, research, development and technology hubs.
In Australia 12 city deals were already in operation when our coalition Government took office, covering urban priorities from transport infrastructure, entertainment centres and stadiums to workforce development.
Thomas says 'city deals need guaranteed funding arrangements to be credible and innovative arrangements involving the private sector can play an important part.'
The Internal Affairs guidelines required an initial 10-year strategic plan with 'clear outcomes and actions required to achieve them' and there had to be a 30-year vision for the region.
Auckland councillors were tipped by their chief executive Phil Wilson at their monthly meeting on Thursday to expect to hear the Government's city deal news next week.
Chris Bishop's office did not address Newsroom's questions over whether the Cabinet had considered the city and regional deal assessments last Monday, or if one would be announced next week.
It offered seven timeless words of deflection: 'Ministers will make announcements in due course.'
The Tauranga-based bid was in the name of three councils, Tauranga City, the Western Bay of Plenty District and the Bay of Plenty Region and developed with iwi and the area's economic development agency Priority One.
Tauranga Mayor Mahe Drysdale said: 'Government has done a great job of signalling investment in the region through the Roads of National Significance programme, and now we want to build on that initiative to deliver growth in core infrastructure that will enable 40,000 additional homes and unleash jobs and economic growth.'
Regional council chair Doug Leeder said another key component of the deal would be to enable increased exports and export income for New Zealand via the Port of Tauranga.
The bid proposal listed three priorities:
1. Deliver the Western and Northern Corridors with major roading projects – Tauriko Network
Connections and Takitimu North Stage 2, enabling housing and industrial land development.
2. Develop the Eastern Corridor by unlocking key land development projects; Te Tumu, Rangiuru
and Te Kāinga.
3. Enable exports, resilience and decarbonisation of freight led by the Connecting Mount
Maunganui project.
The committee for Auckland's Mark Thomas told Newsroom the Auckland proposal was also strong.
'The Auckland deal has been put together with high-level private and public sector and iwi involvement and is a quality product.
'Two years of State of the City reports on Auckland have confirmed a long-term partnership, like a regional deal, between Auckland and Government is the only way to address the systemic and long-standing issues impacting Auckland's performance such as our low peer innovation performance, our skills deficits, and underinvestment in transport.'