The Nation: Lisa Owen interviews Minister Shane Jones

Press Release – The Nation

On The Nation: Lisa Owen interviews Minister Shane Jones

Lisa Owen: Forestry, tourism, roads and rail are all getting a boost in the first wave of funding from the billion-dollar provincial growth fund, but critics say the announcement was underwhelming and essentially just rebranded existing projects. Regional economic development minister Shane Jones joins me now.

Shane Jones: Kia ora.

Minister, kia ora. You’ve started handing out your billion bucks. How much of this money will actually be new funding, rather than reprioritised, reshuffled funds?

Yeah. Well, the full details will come through the Budget, but up to 70% will be capital. The remainder will be operational expenditure, and in all truth, a small part of it will be funds that we are reprioritising, but the vast majority, well in excess of 70%, will be new capital.

So guaranteed 70% will be new capital. Okay, well, how many of the projects you announced – because you would have heard the criticism – how many that you announced were already underway under the National government?

Well, the projects are initiatives promoted by the regions, so it’s not fair to say completely that they’re my ideas or Steven Joyce’s ideas, but the regions were expected to meet their commitments and with a small dollop of 44 million dollars from the last government. And they said to me, ‘Please don’t be capricious, Shane. Don’t be petty. These projects are regional priorities.’ So simply I’ve gathered them up. The next bunch in early April will be a major announcement, and they’ll be projects that have been developed by regions and myself at the moment.

Okay, so the major announcement, will that be a totally new project, not just a continuation of something that National already had its hand in?
Yeah, no, no, the regions had a host of projects that have never ever been referred through to central government.

So, the big announcement, what region is that going to be for?

The next time round we’re going to focus not only on the four surge areas, but Bay of Plenty – they’re very cross with me that we haven’t gone there – and obviously the South Island. But I would say that big projects are tier one. It will require the entirety of the government. We define big as above $20 million. Mid-level – Shane Jones, Mr Twyford, David Parker and our Minister of Finance, we have the authority to sign off, and up to $1 million will be signed off by creatures known as SROs. Those are senior bureaucrats in regular contact with the regions.

Okay, because what you’ve just announced there sort of sounds like a spaghetti of people getting on in what’s going where. And you’ve got an advisory committee thrown in there as well, that’s going to give advice on bigger projects. How are you going to make sure that this is a comprehensive, complementary bag of projects?

Well, the projects are mixed and varied. Obviously, there’s forestry, but that will stand on its own. There are a bunch of infrastructure projects in the regions. Some do come from the coalition agreements, such as the upgrade of Northland rail, but I think once we gather momentum, each region will be able to define its own priorities. So I’m not afraid that in some way it’s going to look like some kind of untidy scrum in a rugby game, but we’ve got to start somewhere. We’ve decided to surge in the four key areas.

So how do you stop it looking like an untidy scrum? Are you the big-picture person? Are you going to have the umbrella view of everything?

Well, the government’s got a Cabinet committee called the Economic Development Committee, and obviously we have a Cabinet Priorities Committee, and that’s chaired by the Prime Minister. So flowing from the four pillars which she’s already spoken about this will be a key feature. Now, it depends as well on the pace of which we find regional councils and regional leaders ready to bring projects forward, often with their own funding, but with a willingness on our part to substantially spend.

Okay, well, to substantially spend, you’ve kind of set a criteria. These projects are supposed to deliver jobs, sustainable economic growth and inclusion. So how and when are you going to know that the things you have paid for have delivered?

We’re going to travel, obviously, at great pace, and at key points, no doubt – every time the departments go through their Parliamentary reviews, there’s going to be challenges put forward. ‘Okay, what process did you use to allocate funds, for example for Opotiki wharf, and show us your business case.’ A lot of infrastructure projects in the regions, they’re going to take time. I may be announcing them this year, and in the next year there’s no guarantee they’re going to come to completion before the next election. So it’s making commitments and driving through the execution, and you’ll never completely know because it takes a long time for something like the Opotiki wharf to be fully built.

So, that’s the problem, though, isn’t it? Because looking at the cabinet notes, it says that in terms of a review, all the money will be spent, and you won’t know how well you have done until after 2020?

Well, some of the projects won’t take that long. For example, the project in the east coast to do with KiwiRail – ie, boosting KiwiRail from Wairoa to Napier, taking trucks off the road. And there’s a lot of rubbish about making truck drivers unemployed. There’s not enough truck drivers in the country at the moment to deal with the industry. So I think those cases, I think that’s exaggerating it.

But what will success look like? What’s your measure? What will success look like?

Success is definitely going to turn around the lives of – obviously me as a Maori, of many of my indigenous nephs getting their arses off the couches, but move on beyond that – unemployment in key dysfunctional areas coming down, councils committing their own capital, us committing their own capital and a boost in the economic fortunes of certain areas, which will flow after we’ve fixed up really egregious cases of infrastructure neglect.

But are you going to have specific targets that you have to hit – specific numbers of jobs created, specific rise in economic growth that you need to know are tied back to these projects?

Yeah, I would say for each of the regions, they already have their action plans. They have already themselves identified the kinds of jobs they want to create…

Yes, Minister—

…the number of tourists they want to attract.

Sorry to interrupt.

So it’s not just me. It’s the regional leaders as well.

But you are overseeing this, and it’s $3 billion of taxpayer money.

It’s a big figure.

Yeah, so—

It’s a big challenge.

So, this is an accountability issue.


How are you going to measure it?

Yeah, so the measurements will be related to employment, improvement in productivity and also, when you look at KiwiRail taking trucks off the road, when you look at the port study and opening up Whangarei as an alternative to Auckland. These are long-term projects—

So no specific targets?


No specific targets, like, you know, for every dollar I spend, I need to get this much growth, this many people need to be employed.

So let’s just look at $60-odd million the other day – an upside of $360-odd million if the full potential of the partnerships are realised and up to 700 jobs. So, that’s just on the first announcement. But what you’re really—
So that’s 80,000 bucks a job, basically?


That’s $80,000 a job?

Indeed. In areas—

Do you think that’s a fair return on your investment?

In areas that are blighted and have been neglected, I’d do it in a heartbeat.
Okay, there’s also going to be this advisory panel that we’ve talked about that’s going to review regional proposals and give advice. Now, the head of that is one Rodger Finlay.


Isn’t he one of your political donors?

Yes, when I stood unsuccessfully against David Cunliffe, which proved to be a blessing in disguise, he did provide me with several thousand dollars to be a Labour leadership candidate.

Okay, so was everybody happy with that choice? Within your coalition party. Were they happy with Rodger Finlay?

Yeah, and our chairman went through the process of the Cabinet committee. And I mean, the process is designed, if you’ve been in receipt of financial assistance for your politics, you declare it. And just because it’s declared should not taint someone who’s got a tremendous amount to offer to Aotearoa.

So, did anyone have any issues? Within your coalition partners, did anyone have any issues with Rodger Finlay?

Well, I backed him. The Cabinet has backed him. Obviously, anyone at a time—
What about outside Cabinet, minister? What about outside Cabinet?

At a time of great sensitivity, there’s always a lot of—there’s always a lot of chatter about anyone who’s been in the oil and the gas, but I overlook those things. I’m appointing, with the support of the Prime Minister, a tremendous New Zealander.

So are you saying that the Greens weren’t happy?

You will have to ask our friends from the Greens, but they’re on board with the kaupapa.

On board with the kaupapa, that’s the big picture. Rodger Finlay, were they on board with him?

I don’t know of any fatal remarks that they might have made about Rodger. And Rodger has my backing, and I’m the Minister.

Okay, so what weight are you going to put on that advisory panel if they tell you that the project, a project, is a potential dud – is that it? Is it over for that project?

Their advice will go through in an unfettered way to the Cabinet committee, and there will be some projects that don’t see the light of day. You’re absolutely right.

Sorry, but the thing is you have said, and I’m quoting you here, ‘There’s no upside unless you are willing to be bold and take a punt,’ so how brave are you going to be with your funding choices? How much risk are you prepared to take?
Well, just creating the $3 billion fund and chewing through it in two and a half years of making commitments, there are risks involved, but what’s the point of doing something as bold as this and trying to rewrite history unless you’re taking a punt to manage that risk?

But how big a risk is what I’m trying to measure here. And in the Cabinet papers, you say that you will be likely supporting projects with a high risk profile.

Mm-hm, well, some would say that breathing life back into KiwiRail in areas where successive governments have wanted to destroy KiwiRail – and the trucking industry are not supportive of KiwiRail – or backing coastal shipping, for example; providing financial grants and what not to help grow the Port of Gisborne, those are all risks.

Okay, but the thing is this is supposed to be… ‘transformational’ is the word and legacy-building, but some people would say you’re just plucking the low-hanging fruit at the moment with rail, roundabouts, roads. Let’s take an example. Hikurangi Cannabis Company, they’ve just signed $160-million deal to export medicinal cannabis to America. Why don’t you put money into a company like that? They wanted some of your regional money. Are you going to give them any?

Yeah, I don’t know the details. I know the individual who’s in the newspaper. I’m hard-line on drugs, so it will be a bloody big stretch for me to be—
It’s medicinal cannabis.

…to start popularising cannabis. If medicinal cannabis legally can go through the hoops, there’s no guarantee, however, that I personally am going to commit this fund to a cannabis company. And anyone who’s saying that is smoking the stuff.

Aren’t you letting your personal views get in the way of a valid business project, then, that could create jobs? Cos if that’s the criteria – jobs and economic returns – don’t you have to put that to one side?

No, what I think New Zealanders look for in Maori politicians like myself is to say it as it is. I don’t pretend not to have views about how cannabis has wrecked my own society, and now it’s P. I’m not going to back away from those views.

That does not sound like you’re coming to it with an open mind.

No, it sounds like a senior Maori politician who’s seen the wreckage that dope has wrecked throughout the north and south and the east. This particular proposal—

Medicinal cannabis in this proposal.

Well, I actually haven’t seen the details, but this is not the only proposal. I would say to Manu and others, there are significant proposals floating around in the north about growing electric puha for medicinal purposes. I think it’s a big policy decision that the Government’s got to get its head around. We are going through the legislation. It’s nowhere as liberal as the Greens wanted, but it’s better, I tell you the truth. I come from an area that’s been blighted by the excesses of drug use, and I’m not going to back down from that.

All right, well, you have, it seems, convinced your Cabinet colleagues that you should have sign-off as forestry minister on tree-planting projects up to $10 million. Where’s the accountability in that?

No, there is an addition. Those amounts of money will go through the conventional Budget process, and no singular sign-off will be done by me unless it’s agreed to by the Minister of Finance.

Okay, so then, let’s talk about the critics who say that this is a slush fund, this development fund, that it is basically you working your way through a list of New Zealand First policies and winning back Northland – or attempting to – with this money. Can you see how some people might get that impression?

Yeah, look, I accept that part of what we’re doing is going to be stigmatised by the National party, but we’re picking up on projects that are action-orientated, that are identified by regions themselves. What the hell is wrong with a central Government politician and a party wanting to work in partnership in areas that have been neglected? I mean, why should areas of provincial New Zealand, Lisa, endure struggler’s gully while metropolitan New Zealand has the upper penthouse level?

But the thing is if you look at the numbers – so the announcements you’ve made yesterday – Northland gets almost twice as much as the next closest region, and it just so happens that you and Winston both live in Northland, and you probably want it back at the election.

Yeah, it also means that—

Is this the re-election fund, Mr Jones?

Yeah, so—well, that’s up for three years—That’s up in three years. But I would say that Northland are highly organised, and these projects have been through not only a regional development process, but they came well prepared. And I acknowledge the chair Bill Bernie and the new board member Murray McCully from the Northland, Far North District Councils —or whatever it’s called — and they’ve put up some good proposals, and they stack up.

Okay, we’re running out of time now. There’s a couple of things I want to get to. Given that this fund is a New Zealand First baby, it’s a concession you got in the coalition deal, and you personally have taken ownership of it. If it fails, are you going to own that as well?

Well, I’m a glass-half-full sort of politician, and I think this notion that before we even start—And the people are saying it’s going to fail because of the treacle-riddled bureaucracy, people aren’t going to show enough pace. We’ve got a good board. I’ve got the support of the ministers. There’s a host of very important projects that have been languishing. I’m bringing energy to the table, and the regional leaders will bring, in my view, the right kinds of projects to turn around the fortunes of neglected provinces.

While I’ve got you here, I can’t resist. Tuesday, caucus is voting on the deputy leadership. You’ve said you don’t want it, but, really, you had your fingers crossed when you said that, didn’t you, behind your back. You’re telling porkies. Surely, you must be interested in it?

No, no, no, no. At one stage, I wanted to be the Minister of Finance, but Minister of Foreign Affairs, but Winston Peters says to me, ‘No, you’re going to Murupara in a pre-fab, and you’re planting a billion trees.’

So – no way, no how. Just to put it on the record now.

On Tuesday, there’s no way that I’m going to put up my hand to be the deputy leader of New Zealand First.

What if your party calls on you?

Well, there’s nine of us, and I’ve got no confidence whatsoever that at this stage people want me to park up the trees and to be the deputy leader.
So are you lacking in ambition or just holding out for the leadership?

Oh, well, that’s biblical. There’s a time and place for everything.
Thank you for joining me this morning, Mr Shane Jones.

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