Government Launches City & Regional Deals to Drive Growth and Reform

Infrastructure Minister Chris Bishop and Local Government Minister Simon Watts jointly released the framework alongside the announcement of the first three Memoranda of Understanding (MOUs) with Auckland, Otago/Central Lakes, and Western Bay of Plenty.

In a landmark step toward long-term infrastructure reform and economic development, the Government has announced its strategic vision for City and Regional Deals (CRDs) — multi-decade partnerships between central and local governments designed to unleash regional potential, close infrastructure gaps, boost productivity, and create jobs across New Zealand. Infrastructure Minister Chris Bishop and Local Government Minister Simon Watts jointly released the framework alongside the announcement of the first three Memoranda of Understanding (MOUs) with Auckland, Otago/Central Lakes, and Western Bay of Plenty.

A New Partnership Model for Economic Transformation

CRDs are envisioned as 10-year strategic agreements that align local and national priorities around shared goals. These include accelerating housing development, addressing aging infrastructure, fostering regional innovation, and improving how government layers coordinate with one another.

“City and Regional Deals will be strategic 10-year partnerships between local and central government to progress joint priorities,” Minister Bishop explained. “These priorities include economic growth, abundant housing, better asset management, and reducing infrastructure deficits — all without new baseline funding from central government.”

The Government’s approach sets out five core objectives for the CRDs programme:

1. Stronger central-local coordination, including clearer governance and shared planning frameworks.

2. Unlocking regional economic potential, including better employment outcomes and local innovation.

3. Enabling housing growth, especially around key infrastructure like rapid transit corridors.

4. Better asset management by local councils, emphasizing sustainability and renewal planning.

5. Alignment with central government reforms, such as Local Water Done Well, RMA reform, and Going for Housing Growth.

What Central Government Offers in the CRDs

The Government is prepared to bring a range of support mechanisms to the table during negotiations with regional partners:

• Improved central government coordination, including deploying senior officials to local governance partnerships and Urban Growth Partnerships.

• Joint spatial planning ahead of full Resource Management Act (RMA) reform, helping regions navigate planning and land-use complexity.

• Innovative financing tools, such as:

  • Shared use of mining royalties

  • Mobilisation of existing government funds

  • Technical support for complex tools like the Infrastructure Funding and Financing Act (IFF) Levies

• Support for key growth sectors (e.g., biotech, aquaculture, tourism, cleantech), including possibly locating confirmed, funded innovation hubs in participating regions.

The CRDs will also encourage PPP arrangements, tolling, and value capture mechanisms, as part of fulfilling the National–ACT Coalition Agreement to modernize funding pathways for infrastructure.

Expectations from Local Government Partners

In return, local councils will be expected to:

• Provide a robust governance structure that supports joint planning with central government.

• Show commitment to infrastructure renewal and better asset lifecycle management.

• Go beyond minimum regulatory standards to unlock housing, especially where central government has made large infrastructure investments.

• Explore demand management and pricing tools (e.g., time-of-use charging).

• Embrace innovative financial mechanisms like Targeted Rates, Development Levies, IFF Act tools, and asset recycling.

• Be active participants in international investment attraction efforts.

“We expect councils to not just comply, but actively lead in adopting government reforms — from Local Water Done Well to the RMA reset,” said Minister Watts.

First Three Regions Selected for Negotiation

Out of 18 regional proposals submitted, three have been selected to move forward with initial negotiations:

1. Auckland

2. Otago/Central Lakes

3. Western Bay of Plenty

These regions were chosen after a multi-agency assessment and review by independent experts, based on factors such as existing Urban Growth Partnerships, strong economic potential, and the maturity of their proposals.

“All three have shown real ambition and capacity for collaboration,” Minister Watts said. “Their proposals reflect a clear alignment between central and local priorities, and a pathway to unlocking transformative change.”

Formal negotiations will now begin, with the first City or Regional Deal expected to be finalised by the end of 2025.

Toward a Future-Proofed Regional Growth Model

The CRDs programme represents a new era in regional economic planning — one where governance, funding, and infrastructure development are approached collaboratively, strategically, and long-term. It signals a major departure from ad hoc central-local engagement and a move toward sustainable, regionally tailored investment planning.

“We are not just investing in projects — we are investing in places and people,” concluded Minister Bishop. “We want to see long-term transformation, not just temporary boosts.”