"A whole lot of back office functions that are presently located in Wellington - and in this day and age don't need to be there - I'm a great a fan of taking that stuff out to the regions."
While there was a case for claiming taxpayer funds could be saved through centralisation of the work government departments undertook, "the argument may well be that the marginal extra costs that you have in dispersing them out is more than paid for by the multiplier effect of 50 public sector salaries creating their own little economic boost here [in Hawke's Bay]," he said.
"There are benefits of having those kinds of professional-level salaries located in the regions as opposed to down in Wellington."
A Labour-led government would focus on policies that made it more attractive for certain types of businesses, as well as government departments, to set up shop in the regions.
"The way people earn a living and our economic profile is changing and has to change. One of the things you'll hear from us is the need to change our economic profile and increasingly, for a lot of professional tasks, location is a lot less important now," he said.
But there was no simple solution to the "chicken and egg" problem of attracting staff and businesses to grow outside the main centres.
"I'm not sure what the answer is but it's an issue we need to be thinking about. While we want an international-grade city in Auckland, so much effort gets focused on Auckland that it sucks the life out of the rest of the country and that's not a healthy balance. We've got to find a way of addressing it somehow."
While Labour would continue to work on policy development ahead of the next election, the concept of a regional development fund, which the party touted ahead of last year's election, was "still attractive to me," Mr Little said.
The regional development fund concept involved allowing regions to bid for funding for projects in the $10 million to $20 million range which were also likely to attract parallel private sector financing.
