23 Sep 2015

$5m stimulus fund for West Coast businesses

12:53 pm on 23 September 2015

A $5 million stimulus fund has been set up to provide commercial loans to struggling West Coast businesses.

Development West Coast launched the fund today to encourage business development, employment and growth in the region.

Development West Coast is a charitable trust set up to manage and distribute income from a $92m Government fund, which was an adjustment package for the loss of indigenous forestry and the privatisation of much infrastructure on the West Coast in the late 1990s.

Any West Coast business can apply for a commercial loan, while the amount given and interest rate will be decided on a case by case basis.

Chief executive Joseph Thomas said the economic downturn and significant job losses in the mining sector had hit businesses hard.

"We are starting to see, and have been seeing for a while now, the decrease in retail sales and an increase of job losses throughout the coast, so this fund is to stimulate growth.

"People are struggling, industries that used to support the mining sector now need to find alternative markets to keep their businesses going."

Grey District mayor Tony Kokshoorn said the fund was good news for the district which needed any stimulus support it can get.

"What we have on the West Coast is a classic down-turn - the Pike River disaster started it, and then we had the massive commodity decline with coal, and then 1200 jobs have gone with Solid Energy, so it has been hit after hit."

Mr Kokshoorn said it had been a painful transition from extraction businesses to sustainable businesses but the coast was doing everything it could to build the economy again.

"I think rural New Zealand is struggling in general, there is a huge gap between Auckland and everyone else.

"CBDs are struggling, you go to any small town and you'll see half of the shops on the main street empty."

Mr Kokshoorn said the fund will give business a confidence boost, knowing the support is available.

"With the economy the way it is hard to know who is struggling or not, some people have more debt than others, but on the West Coast we are limited on what we can do, farming, tourism and mineral industries, are what drives the coast, but we are looking towards more sustainable options as well."

"There are things happening: we have a new $70 million hospital being built, a new stadium and the local polytechnic is expanding, but in the current climate, some businesses are struggling." Mr Kokshoorn said.

Mr Thomas said if an application was over $250,000, an independent advisory body would provide advice but the final decision was for the Development West Coast board. The fund is available from 1 October.

The $5m Business and Industry Stimulus Fund adds to funds already available from Development West Coast.

A $3m District Economic Stimulus Fund, $1m Digital Enablement Fund and a $248,000 grant to assist Tourism West Coast in attracting more domestic tourists to the region are already in place.