A New Zealand think tank is claiming the Government's Provincial Growth Fund (PGF) needs a course correction to ensure it isn't wasting money.
The Maxim Institute released a report on Tuesday which suggests the Government's "big" thinking with the $3 billion PGF comes with too much risk, and it needs to start making "smart" investments to generate the best outcomes for the regions.
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"The temptation when you are under that kind of pressure is to pick the low hanging fruit, to grab the thing that is investment ready, even if it isn't necessarily the best investment in the big scheme of things" said chief executive Alex Penk.
The report says that the PGF has "great potential" but introduces the risk of "misallocating resources, creating dependency culture and favouring rent-seekers over innovators".
The institute's five key concerns include a lack of evaluation and little co-ordination across the overall regional development strategy. It also said a "sector-based investment strategy that picks certain sectors over others introduces undue risk".
Among five recommendations, the report suggests requiring any PGF initiative over $10 million to have a monitoring strategy developed before funding is approved.
It also said the fund's focus should be on a region's potential rather than its growth prospects.
Mr Penk said political urgencies also need to take a back seat to ensure taxpayer money is well spent.
"We all know that the faster you go, the bigger the mess, and trying to spend $3 billion in 3 years and do it well is a huge risk," he said.
"We really need to just stop thinking in terms of this amount of money in this time frame, and we just need to think about what are the best outcomes we can get for the regions."
Regional Economic Development Minister, Shane Jones, said he welcomed analysis of the PGF but disagreed with its suggestion that the Government needed to slow down with its rollout.
"Doing so would overcomplicate the fund, and ultimately be bad news for the communities who have spent months and often years already navigating various layers of bureaucracy while trying to get their projects off the ground," he said.
Mr Jones said regional New Zealand wasn't interested in "policy séances or glossy reports" and instead want action.
"That's what the PGF is about.
"I'm convinced that between delegated Regional Economic Developmet Ministers, the Provincial Development Unit, and our Independent Advisory Panel led by Rodger Finlay, we have the necessary experience and commercial acumen to ensure the right projects are chosen, with a wider strategic view in mind."
He did, however, agree with the need for robust evaluation and monitory, but said many of the PGF projects are already supported by businesses cases and tied to various conditions and milestones.
Earlier this month, Newshub revealed the Government had only spent $26.6 million of its $3 billion fund, which had created only 54 jobs. The Government then did a full inventory of jobs created by the fund and said 560 had been created, including part-time jobs.
Mr Jones said projects were taking a while to get going due to a lot of red tape.
Recently announced investments from the fund include $19.5 million into developing new pest control methods that don't use 1080, as well as $82 million into a new employment scheme to support workers in regional New Zealand.
Mr Penk is the brother of National MP Chris Penk.