Minister Chris Bishop says all three regions have significant economic growth potential. Photo: RNZ / Samuel Rillstone
The government is to begin negotiations with councils in Auckland, Otago and Western Bay of Plenty to set in place so-called city or regional deals.
Mayors from those three regions have signed memoranda of understanding (MOUs) with the coalition, after being selected from 18 "light-touch proposals" from around the country.
The proposed deals are a coalition initiative under which local and central government will agree funding and project priorities over 10 years.
Infrastructure Minister Chris Bishop said all three regions had significant economic growth potential and had already demonstrated an ability to partner with government.
"They were the highest quality proposals," he told RNZ. "We want to start with the three where... there's real strategic fit... we're keen to sit down a talk."
Negotiators from both sides would meet soon with the hope of finalising the first deal by the end of the year.
Bishop said, as part of negotiations, the government was prepared to offer easier access to new and existing funding and financing tools, as well as more collaboration with its experts and officials.
He said, for example, the government could assist councils with using the Infrastructure Funding and Financing Act, or setting up targeted rates.
"It wouldn't so much be the government stumping up with a sum of money," Bishop said. "Money is tight, obviously, and there's not a lot of free money lying around.
"We'll be sitting down with the regions and trying to work out exactly what's possible and feasible within the fiscal constraints that we have."
Bishop said a deal could "possibly" include regulatory changes, though the coalition was "not super keen" on bespoke regulations for particular regions.
"That would be really picking winners... if something's a good idea to deregulate, it's a good idea for everybody."
The government could, however, set up already funded "innovation facilities" in a particular location as part of a deal.
"Auckland, for example, is keen on boosted investment in science, and the government locating some of its new public research institutions in Auckland. That's a fair enough proposal, and so we'll have a look at that."
Bishop said in return, councils would have to sign up to the government's vision around economic growth, housing, water services and transport.
Councils would have to do a better job looking after pipes, roads, and other important assets, he said.
They would also be expected to do more than just the bare minimum when it came to encouraging new housing - especially near "rapid transit corridors" where the government had already helped pay for infrastructure.
Bishop said the government also wanted councils to consider congestion charging, special rates for certain areas, or development charges.
"I'm pretty bullish about the prospects for a better central-local government relationship to ultimately drive prosperity for everybody."
The government hoped to finalise its first deal by the end of the year.
