Budget 2024: Regional economic development takeouts

I had the pleasure of attending Budget 2024 in Wellington today. The Budget lockup is an intense experience, where you have 3.5 hours to perform a line-by-line analysis of the Government’s books. Rather than get swamped in the detail, I decided to dedicate my focus to trying to unpack some of the stories behind what is in the Budget for regional economic development.

First things first, it was a relatively austere day for those involved in economic development, and our partners in the tourism sector. The big show in town was more details surrounding the $1.2 billion Regional Infrastructure Fund (which I will turn to shortly), but it was also sobering to see some of the details regarding spending cutbacks within economic development and tourism functions at MBIE. Examples of these cutbacks included:

  • $9 million has been trimmed from economic development policy advice at MBIE over 4 years, with a small trimming of the evidence and insights budget as well.
  • There has also been a sharp drop in funding to tourism marketing ($5 million per year reduction) and back-office tourism functions, as well as reduced funding for cycle trails. The Budget clearly states that some of these services could be funded again depending on the outcome of the International Visitor Levy consultation, which emphasizes the importance of economic development agencies participating in the IVL consultation process.

The Regional Infrastructure Fund: What is known?

My focus of the day was on trying to unpack the details behind the Regional Infrastructure Fund (RIF) given that it was the biggest show in town for economic development at this Budget. Big would be an overstatement when we think that it is only one third the size of the original Provision Growth Fund – but it is still clearly better than nothing!

Below I have outlined the details of the RIF as I know them. These details are based on a combination of my reading of the Budget documents as well as discussions that I had with Treasury officials attending the Budget who were involved in pulling the RIF into the Budget.

  • The new $1.2 billion Regional Infrastructure Fund (RIF) will be distributed over the 3 years to June 2027 to invest in resilient infrastructure and regional projects that support economic growth. Unfortunately, this is not a particularly large fund compared to the Provincial Growth Fund and there are already some limitations to how it can be used that reduce its size even further.
  • The RIF has two main categories:
    • Resilience infrastructure: projects that improve a region’s ability to absorb, adapt and/or respond to stresses and shocks. Investments will improve resilience in areas such as weather events, energy security, water security, food security, connectivity, and recovery infrastructure.
    • Enabling infrastructure: projects that support broader economic outcomes, such as increasing productivity in regional economies. These projects will invest in assets that are used by, and/or generate benefits for, multiple businesses or many parts of a community. An example includes shared services such as innovation parks.
  • Of the $1.2 billion fund to be allocated over three years to 30 June 2027:
    • $900 million is for capital (loans, equity, and ownership investments) at $300 million per year.
      • But of this $900 million, $200 million is allocated to flood resilience infrastructure – with half of that already committed to a range of regional flood resilience projects. So really there is only $700 million left for non-flood resilience work over three years. It must be said, however, that flood resilience work is not only about protecting infrastructure and housing, but also productive growing lands and so there will be economic resilience benefits for farming and horticultural areas affected by flooding.
    • $300 million is operating spend (this includes grant investments and costs associated with administration of the RIF) at $100 million per year.
      • The introduction of some grant investments is great. The administration costs of the RIF should be low. I have been informed by Treasury officials that the administration of the RIF will be small and likely to fall in the low single digit millions per year. Part of the reason for it being low is that Kānoa has received an ongoing funding arrangement to manage the rest of its other operations from elsewhere in the Budget (around $22 million per year for four years to June 2028), so it will only be ‘clipping the ticket’ on new administration work directly related to the RIF.
  • Some funds will remain unallocated to enable the Government to respond to emerging priorities over the life of the fund. I have been informed by Treasury officials that this will be no more than 2% to 5% of the overall value of the fund, so likely to be less than $50 million out of the $1.2 billion.
  • The RIF will primarily support projects with funding requests ranging from $1million to $50 million, while remaining flexible to consider larger projects that align with regional and national priorities.
    • The Crown will be co-investing alongside local authorities, businesses and organisations, meaning all RIF projects will require an element of co-investment from the funding recipient.
    • The RIF will prioritise projects that are not eligible for funding from other government agencies, filling critical gaps in regional infrastructure development.
    • The RIF will create Crown and regional assets through a mix of loan, equity and grant investments.
    • One of the RIF’s initial focus areas will be on Māori development, given the barriers to investment faced by Māori entities, whenua Māori, iwi and Māori businesses. In the words of Shane Jones at the Budget lockup, this is about moving to a co-investment approach in the regions.


Although Budget 2024 was an austere one for funding within many of MBIE’s economic development and associated functions, at least some further details of the Regional Infrastructure Fund have been revealed. RIF details are still relatively high level at this stage, and so these will now need to be backfilled at pace with more detailed operational guidance and advice from Kānoa staff.

In the meantime, my message to people in the regions in pulling together your potential RIF projects is to keep up dialogue with Kānoa staff to ensure that your project is well-aligned to the intentions of the fund. Given the investment-focus of this Government, make sure you also put a lot of emphasis into making sure you have a well-developed and analytically robust business case, alongside credible commitments of investment from your partners, including those in the private sector.